Question

During the financial year 2019-20 Alok had cash sales of Rs. 1,80,000 and credit sales of
Rs. 1,20,000. His Expenses for the year were 1,00,000 out of which Rs. 40,000 is still to
be paid. Find out Alok's Income for 2019-20 following the (a) Cash basis and Accrual
basis of Accounting. (1)​

Answer 1

Answer:

(a) 1,20,000 (b)2,00,000

Answer 2

Answer:

Explanation:

Revenues (inflow of cash, i.e., cash sales) = Rs.1,80,000

Less : Expenses (outflow of cash)(Rs. 1,00,000-Rs. 40,000)= 60,000

Net Income= 1,20,000

Note : Credit sales and outstanding expenses will not be considered under . Cash Basis of Accounting.