Question

Salary paid in cash during the current year
was Rs. 2,00,000. Outstanding salary at the
end was Rs. 10,000. Salary paid in last year
which belongs to the current year was
Rs.8,000. Salary paid in advance in the
current year for the next year was
Rs.12,500.
From the following, find out the correct
amount of Salary to be shown in Income &
Expenditure Account:
option
A-2,10,000
B-2,30,000
C-1,89,500
D-2,05,500​

Answer 1

Answer:

Explanation:

• You can see the salary account only with these entries
• Salary Account Debit  Rs. 200000.00 & Cash account credited
• Salary account debit Rs.10000.00 & outstanding salaries credit
• Salary account debit Rs.8000.00 & Prepaid expenditure (Salaries) credit
• Prepaid Expenditure-Salaries Debit Rs.12500.00 & credit Cash/Bank

Rs. 2,00,000.00

Rs.   10,000.00

Rs.    8,000.00

Total 2,18,000.00

Minus advance paid Rs.12500.00

Means 2,05,500.00 (D) If Rs.12500.00 debited to Salaries account