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Taking the figures in Illustration 1, find out the net income according to Accrual Basis of Accounting. |
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Answer» SOLUTION :`{:(,,"Rs."),("TOTAL SALES = Cash Sales (Rs. 3,90,000)+Credit Sales (Rs. 1,60,000)",,"5,50,000"),("Less : Total Expenses for the Year",,"2,70,000"),("Net Income",,ulbar(ul("2,80,000"))):}` Note : Rs. 80,000 expenses still to be paid belong to this year and hence are to be charged to the revenue of this year. Similarly, credit sales of Rs. 1,60,000 are taken in the year in which sales TRANSACTION is done. |
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