Question

Opening balance of cash account is Rs. 2,00,000. Expenditure payable is Rs. 70,000. Amount of cash sales is Rs. 80,000 & Amount of credit sales is Rs. 1,00,000. What is the closing cash balance?

• A. Rs. 2,10,000
• B. Rs. 2,80,000
• C. Rs. 3,50,000
• D. None of the above

Answer 1

The correct option is B

Rs. 2,80,000

Closing cash balance
= Opening cash balance + Receipts - Payments
= Rs. 2,00,000 + Rs. 80,000 - 0
= Rs. 2,80,000.

Expenditure payable is still due and hence not included in calculation.
And credit sales is not cash in nature.