Question

Ranjana, a chartered accountant, during the year 2018-19 earned 5,00,000. Out of which she received

4,00,000. She incurred an expense of 2,00,000 out of which 60,000 are outstanding , she also received

fees relating to previous year 60,000 and also paid 30,000 expenses of last year.

You are required to determine her income for the year if She follows cash basis of accounting.

 She follows accrual basis of accounting.​

Answer 1

Answer:

in accruaal basis of accounting income and expenses are recorded at the time when they are earned without considering whether it has occurred or not,

therefore, 5,00,000-2,00,000+60,000-30,000

=3,30,000