Question

During the financial year, Jigyasa had cash sales of Rs. 13,00,000 and credit sales of Rs. 2,00,000.
Expenses incurred for the year were Rs. 8,20,000 out of which Rs. 80,000 are still to be paid.
Find out Jigyasa’s income if she follows :
i. Cash Basis of Accounting
ii. Accrual Basis of Accounting

Very Very Urgent please do it guys ^_^

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Answer 1

Answer

In a Financial year Jigayasa had cash sales of

₹ 13,00,000

And credit of ₹ 2,00,000

Now

Expenses incurred for the year they were

₹ 8,20,000  Out of which she still have to be paid

₹ 80,000

So Now

If she follows :-

(i)   Cash Basis of Accounting  

  Then We have to subtract the expenses and the value comes out after the subtraction , subtract that value with the cash sales value

Now

₹ 13,00,000 - ( 8,20,000 - 80,000)

=   ₹ 5,60,000

(ii) In Accrual Basis

Do the Addition of values of cash sales and credit sale s and then subtract with 8,20,000

Also

₹ (13,00,000 + 2,00,000) - 8,20,000

= ₹ 6,80,000