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.

Open in App

Solution

(i) Cash Basis of Accounting
= 4,50,000 - 2,00,000 (3,50,000-1,50,000)
= Rs.2,50,000

(ii) Accrual Basis of Accounting
= 4,50,000+3,00,000-3,50,000
= Rs.4,00,000

Suggest Corrections

Similar questions

Roshan,a Chartered Accountant earned Rs.12,00,000 during the financial year 2015-2016,out of which he received Rs.10,50,000.He incurred expenses of Rs.5,10,000,out of which Rs.1,20,000 are outstanding.He also received his fees relating to previous year Rs.1,35,000 and also paid Rs.60,000 due on expenses of last year.Find out Roshan's income for 2015-2016 following the cash basis and accrual basis of accounting.

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.

There are 2 students studying in the same class. The teacher has given them an assignment to analyze a situation & find out the profit. Student A follows cash system of accounting & Student B follows accrual basis of accounting. What shall be difference between the profits as calculated by both of them for the period ending 31st March 2017?

Situation:
Sales of the company during the year is Rs 5,00,000 out of which cash sales is Rs 4,00,000. The company has paid a rent in the month of January 2017 for 1 year @ Rs 30,000 per month.

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. 20 lakh accounted for in the same financial year and remaining in next financial year when the debtors were realized. The firm is following ______ system of Accounting.

Join BYJU'S Learning Program

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.

(i) Cash Basis of Accounting = 4,50,000 - 2,00,000 (3,50,000-1,50,000) = Rs.2,50,000 (ii) Accrual Basis of Accounting = 4,50,000+3,00,000-3,50,000 = Rs.4,00,000

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.

(i) Cash Basis of Accounting
= 4,50,000 - 2,00,000 (3,50,000-1,50,000)
= Rs.2,50,000

(ii) Accrual Basis of Accounting
= 4,50,000+3,00,000-3,50,000
= Rs.4,00,000