Today is 31st July'17, Arun has started his business from 1st April'17. He has sold computers for the period from April to July and he has paid rent from April to August. For what period would the revenue and expense be recorded?

Revenue - April to July
Expense - April to August

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Revenue - April to August
Expense - April to July

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Revenue - April to July
Expense - April to July

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Revenue - April to August
Expense - April to August

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Solution

The correct option is C
Revenue - April to July
Expense - April to July

Arun has sold computers from April to July. Considering the date today is 31st July'17, although he has paid rent from April to August, we still consider the expense of rent payment from April to July. This is because, in order to compare revenue and expense, he has to ensure they are of the same period. This aspect is covered by the Matching concept.

Hence both revenue and expense would be recorded for the period from April to July.

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Parth has an accounting year ending on 31st March. He receives rent quarterly in advance amounting Rs. 45,000 on 1 January, 1 April, 1 July and 1 October but for the current year, he received the rent on 31st March instead for 1st April. What shall be the amount of rental income to be recorded in the profit & loss account for the year?

Q. Prepare Simple Cash Book from the following transactions of Mr. Suresh, Delhi:


2018		₹	2018		₹
April 1	Mr. Suresh commenced business with cash	80,000	April 17	Paid for stationery	200
April 3	He bought goods	50,000	April 18	Paid for office furniture	3,000
April 5	Sold goods for Cash	40,000	April 21	Received from Mr. Kailash Chand	6,800
April 6	Received cash from Mr. Manohar	3,600	April 22	Paid for advertising	1,008
April 9	Paid into Bank	30,000	April 25	Purchased postage stamps	80
April 13	Paid cash Harikrishan	2,150	April 28	Paid Rent	1,120
			April 30	Paid electricity charges	150

In a burglary at the godown of Bharat Goel on the night of 14th July, 2016 part of the stock was stolen.
From the following particulars, find out the estimated value of loss of stock by theft.

$\begin{matrix} R s . Stock on 1st April, 2016 & 1, 20, 000 Purchases from 1st April to 14th July, 2016 & 8, 20, 000 Sales from 1st April to 14th July, 2016 & 12, 00, 000 Stock remaining after burglary & 24, 000 \end{matrix}$

The normal rate of gross profit for his business is 30% of selling price.

Q. Prepare Simple Cash Book from the following transactions of Suresh, Delhi:


2019		₹	2019		₹
April 1	Suresh commenced business with cash	80,000	April 17	Paid for stationery	200
April 3	He bought goods	50,000	April 18	Paid for office furniture	3,000
April 5	Sold goods for Cash	40,000	April 21	Received from Mr. Kailash Chand	6,800
April 6	Received cash from Mr. Manohar	3,600	April 22	Paid for advertising	1,008
April 9	Paid into Bank	30,000	April 25	Purchased postage stamps	80
April 13	Paid cash to Harikrishan	2,150	April 28	Paid Rent	1,120
			April 30	Paid electricity charges	150

Q. On 1st April, 2018, Mohit started business with a capital of ₹ 50,000. He made the following transactions:

2018		₹
April 03	Purchased goods from Rita on credit for	20,000
April 04	Cash paid to Rita	10,000
April 06	Goods sold to Rohit	25,000
April 08	Received cash from Rohit	20,000
April 12	Goods purchased from Rita	12,000
April 18	Cash paid to Rita	20,000
April 25	Goods sold to Rohit	10,000
April 30	Received cash from Rohit	6,000

You are required to journalise the above transactions and show the respective Ledger accounts.

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