what is the reason for reducing the outstanding in the begining in income and expenditure a/cs

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Solution

Dear Student, Outstanding Expenses in beginning are deducted from the concerned expenses in the Income and expenditure A/c because these must have been paid during the Current year.

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$\begin{matrix} Receipts and Payment Account Dr & Suspense Account & Cr \end{matrix} \begin{matrix} Receipts & Amount & Payments & Amount (Rs) & (Rs) To Cash in hand on 1.1.2012 & 6, 800 & By Salary & 24, 000 To Subscriptins & 60, 200 & By Travelling Expenses & 6, 000 To Donation & 3, 000 & By Stationary & 2, 300 To Sale of Furniture (Book value & By Rent & 16, 000 Rs 6,000) & 4, 000 & By Repairs & 700 To Entrance fees & 800 & By Books purchased & 6, 000 To Life Membership fees & 7, 000 & By Building purchased & 30, 000 To Interest on Investments(@5 % & By Cash in hand on 31.12.12 & 1, 800 for full year & 5, 000 ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 86, 800 - ------ - - ------ - & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 86, 800 - ------ - - ------ - \end{matrix}$

Additional Information :

$\begin{matrix} Particulars & As on & As on 1.1.2012 & 31.12.2012 (i) & Subscriptions Received in Advance & 1, 000 & 3, 200 (i i) & Outstanding Subscriptions & 2, 000 & 3, 200 (i i i) & Stock of Sationery & 1, 200 & 800 (i v) & Books & 13, 500 & 16, 500 (v) & Furniture & 16, 000 & 8, 000 (v i) & Outstanding Rent & 1, 000 & 2, 000 \end{matrix}$

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