New RBI Grade B 2025 Notification will come Soon! Enroll Here

    Question

    During the financial year 2023-24, A had cash sales of

    ₹3,90,000 and credit sales of ₹1,60,000. His expenses for the year were ₹2,70,000, out of which ₹80,000 is still to be paid. Find out Ashok's income for 2023-24 following the Cash Basis of Accounting.
    A ₹1,20,000 Correct Answer Incorrect Answer
    B ₹2,00,000 Correct Answer Incorrect Answer
    C ₹1,10,000 Correct Answer Incorrect Answer
    D ₹3,70,000 Correct Answer Incorrect Answer
    E ₹1,90,000 Correct Answer Incorrect Answer

    Solution

    Under the Cash Basis of Accounting, only cash inflows and outflows are considered. A's cash income is calculated by subtracting the actual cash expenses (₹1,90,000) from the cash revenues (₹3,90,000), resulting in a net income of ₹2,00,000.

    Practice Next