Question

In a financial year , Vinod had total sales of rs. 7,40,000, out of which rs. 5,60,000 were received

in cash. Total expenses paid in the year were rs. 3,80,000, out of which rs. 30,000 belongs to next

year. Expenses of rs. 10,000 are still outstanding. He also received rs. 8,000 cash for advance

sales. Determine Vinod’s Income for the year as per:

(i) Cash Basis of Accounting (ii) Accrual Basis of Accounting ​

Answer 1

Answer:

1. Cash Basis of Accounting = 1,88,000
2. Accrual Basis of Accounting = 3,80,000