A firm has reported a profit of Rs.1,47,000 for the year ended 31-3-2017 after taking into consideration an anticipated profit of Rs.12,000 on the sale of an old furniture & not taking into consideration salary of Rs.7,000 outstanding for the year. What shall be the correct profit as per Conservatism Principle?
Rs 1,28,000
As per Conservatism Principle:
Incorrect Profits147,000.00Less: Anticipated profits12,000.00Less: Outstanding salaries7,000.00Correct Profits128,000.00