A trader has made a sale of Rs.75,500 out of which cash sales amounted to Rs.25,500. He is of the view that in the Financials Statements for the year, he shall show a sales of Rs 75,500 & trade receivables of Rs.50,000. Which concept is followed by him?

Cash basis of accounting

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Accrual Basis of accounting

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Both A & B

No worries! We‘ve got your back. Try BYJU‘S free classes today!

None of the above

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is B
Accrual Basis of accounting

The concept in accrual basis of accounting is that accounting transactions should be recorded in the accounting periods when they actually occur, rather than in the periods when there are cash flows associated with them.

Suggest Corrections

Similar questions

Q. A trader maintains his books of accounts on Single Entry basis. His books of accounts show that his total purchases during the year were Rs. 90,000 of which he returned goods worth Rs. 10,000. His credit sales were Rs. 50,000 and cash sales were Rs. 80,000 of the total sales goods returned were Rs. 30,000. Closing stock is Rs. 12,000. He sells his goods at cost plus 33.33%. His opening stock is?

Q. Total sales during the financial year amounted to Rs.25 lakh out of which Rs.5 were received in next financial year when the debtors were realized, however, the firm accounted sales as Rs. 25 lakh in the same financial year. The firm is following ______ system of Accounting.

Q. Total sales during the year amounted to Rs.170000, cash sales Rs.10000, outstanding debtors at the end of the year Rs.25000. Cash received from debtors will be Rs.____________.

During the financial year,Rajan had cash sales of Rs.4,50,000 and credit sales of Rs.3,00,000.Expenses incurred for the year were Rs.3,50,000 out of which Rs.1,50,000 are still to be paid.

Find out Rajan's income following

(i) Cash Basis of Accounting

(ii) Accrual Basis of Accounting.

If the rate of sales tax is 5%, ‘A’ has to pay Rs 7,140 for steel cup board. What amount he has to pay if the sales tax is increased by 2%.

Join BYJU'S Learning Program

A trader has made a sale of Rs.75,500 out of which cash sales amounted to Rs.25,500. He is of the view that in the Financials Statements for the year, he shall show a sales of Rs 75,500 & trade receivables of Rs.50,000. Which concept is followed by him?

The correct option is B Accrual Basis of accounting The concept in accrual basis of accounting is that accounting transactions should be recorded in the accounting periods when they actually occur, rather than in the periods when there are cash flows associated with them.

The correct option is B
Accrual Basis of accounting

The concept in accrual basis of accounting is that accounting transactions should be recorded in the accounting periods when they actually occur, rather than in the periods when there are cash flows associated with them.