Question

During the financial year 2015-16, Rushil had cash sales of 5,00,000 and credit sales of 1,50,000.
His expenses for the year were 2,25,000 out of which 80,000 is still to be paid and 20,000 is related
to previous year. Find out Rushil's income for 2015-16 if he follows :-
(i) Cash Basis of Accounting
I
(ii) Accrual Basis of Accounting
​

Answer 1

Answer:

I) Cash basis

revenue = Rs.5,00,000

expenses= 225000+80000=145000

income = revenue - expense= Rs.3,55,000

ii) Accrual basis

revenue= 5,00,000+150000=6,50000

expenses= 225000-20,000=2,05,000(because under accrual basis we only record of following accounting period)

income = 455000