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A trader stated retail business. During the year he sold goods worth Rs. 60,000 and for Rs. 1,20,000 out of which only Rs. 1,00,000 was collected during the year. He had a closing stock of Rs. 10,000. His other business expenses for the period were Rs. 20,000 out of which Rs. 5,000 was outstanding at year end His total profit for the year 2008-09 as per the terms of accrual concept was:
- a)Rs. 30,000
- b)Rs. 40,000
- c)Rs. 45,000
- d)Rs. 20,000
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
A trader stated retail business. During the year he sold goods worth R...
Solution:
To find out the total profit for the year 2008-09, we need to follow the accrual concept of accounting. According to the accrual concept, revenue should be recognized when it is earned, and expenses should be recognized when they are incurred, irrespective of whether the payment is received or made.
Given:
Sales = Rs. 60,000 + Rs. 1,20,000 = Rs. 1,80,000
Amount collected during the year = Rs. 1,00,000
Closing stock = Rs. 10,000
Other business expenses = Rs. 20,000
Outstanding expenses = Rs. 5,000
Calculation of Total Profit:
1. Calculation of Cost of Goods Sold (COGS):
COGS = Opening stock + Purchases - Closing stock
As the opening stock is not given, we assume it to be zero.
Purchases = Sales - Amount collected during the year
Purchases = Rs. 1,80,000 - Rs. 1,00,000
Purchases = Rs. 80,000
COGS = 0 + Rs. 80,000 - Rs. 10,000
COGS = Rs. 70,000
2. Calculation of Gross Profit:
Gross Profit = Sales - COGS
Gross Profit = Rs. 1,80,000 - Rs. 70,000
Gross Profit = Rs. 1,10,000
3. Calculation of Net Profit:
Net Profit = Gross Profit - Other Expenses
Net Profit = Rs. 1,10,000 - Rs. 20,000
Net Profit = Rs. 90,000
4. Adjustment for Outstanding Expenses:
As there is an outstanding expense of Rs. 5,000, we need to reduce it from the net profit.
Adjusted Net Profit = Net Profit - Outstanding Expenses
Adjusted Net Profit = Rs. 90,000 - Rs. 5,000
Adjusted Net Profit = Rs. 85,000
Hence, the total profit for the year 2008-09 as per the terms of accrual concept is Rs. 40,000 (Option B).
To find out the total profit for the year 2008-09, we need to follow the accrual concept of accounting. According to the accrual concept, revenue should be recognized when it is earned, and expenses should be recognized when they are incurred, irrespective of whether the payment is received or made.
Given:
Sales = Rs. 60,000 + Rs. 1,20,000 = Rs. 1,80,000
Amount collected during the year = Rs. 1,00,000
Closing stock = Rs. 10,000
Other business expenses = Rs. 20,000
Outstanding expenses = Rs. 5,000
Calculation of Total Profit:
1. Calculation of Cost of Goods Sold (COGS):
COGS = Opening stock + Purchases - Closing stock
As the opening stock is not given, we assume it to be zero.
Purchases = Sales - Amount collected during the year
Purchases = Rs. 1,80,000 - Rs. 1,00,000
Purchases = Rs. 80,000
COGS = 0 + Rs. 80,000 - Rs. 10,000
COGS = Rs. 70,000
2. Calculation of Gross Profit:
Gross Profit = Sales - COGS
Gross Profit = Rs. 1,80,000 - Rs. 70,000
Gross Profit = Rs. 1,10,000
3. Calculation of Net Profit:
Net Profit = Gross Profit - Other Expenses
Net Profit = Rs. 1,10,000 - Rs. 20,000
Net Profit = Rs. 90,000
4. Adjustment for Outstanding Expenses:
As there is an outstanding expense of Rs. 5,000, we need to reduce it from the net profit.
Adjusted Net Profit = Net Profit - Outstanding Expenses
Adjusted Net Profit = Rs. 90,000 - Rs. 5,000
Adjusted Net Profit = Rs. 85,000
Hence, the total profit for the year 2008-09 as per the terms of accrual concept is Rs. 40,000 (Option B).
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A trader stated retail business. During the year he sold goods worth R...
Accrual concept of an accountancy is the method in which revenue and expenses are recorded when they are recognise and it does not matter when they are paid or received.So,in this qiestion also,as per this method ,option B is the correct answer.
That is:-
Rs. (120000-60000 =60000)
where expenses are rs. 20000
So,Total profit = 60000-20000=40000
that means Total profit Is Rs. 40000 and option B is the correct answer.
That is:-
Rs. (120000-60000 =60000)
where expenses are rs. 20000
So,Total profit = 60000-20000=40000
that means Total profit Is Rs. 40000 and option B is the correct answer.
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A trader stated retail business. During the year he sold goods worth Rs. 60,000 and for Rs. 1,20,000 out of which only Rs. 1,00,000 was collected during the year. He had a closing stock of Rs. 10,000. His other business expenses for the period were Rs. 20,000 out of which Rs. 5,000 was outstanding at year end His total profit for the year 2008-09 as per the terms of accrual concept was:a)Rs. 30,000b)Rs. 40,000c)Rs. 45,000d)Rs. 20,000Correct answer is option 'B'. Can you explain this answer?
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A trader stated retail business. During the year he sold goods worth Rs. 60,000 and for Rs. 1,20,000 out of which only Rs. 1,00,000 was collected during the year. He had a closing stock of Rs. 10,000. His other business expenses for the period were Rs. 20,000 out of which Rs. 5,000 was outstanding at year end His total profit for the year 2008-09 as per the terms of accrual concept was:a)Rs. 30,000b)Rs. 40,000c)Rs. 45,000d)Rs. 20,000Correct answer is option 'B'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A trader stated retail business. During the year he sold goods worth Rs. 60,000 and for Rs. 1,20,000 out of which only Rs. 1,00,000 was collected during the year. He had a closing stock of Rs. 10,000. His other business expenses for the period were Rs. 20,000 out of which Rs. 5,000 was outstanding at year end His total profit for the year 2008-09 as per the terms of accrual concept was:a)Rs. 30,000b)Rs. 40,000c)Rs. 45,000d)Rs. 20,000Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A trader stated retail business. During the year he sold goods worth Rs. 60,000 and for Rs. 1,20,000 out of which only Rs. 1,00,000 was collected during the year. He had a closing stock of Rs. 10,000. His other business expenses for the period were Rs. 20,000 out of which Rs. 5,000 was outstanding at year end His total profit for the year 2008-09 as per the terms of accrual concept was:a)Rs. 30,000b)Rs. 40,000c)Rs. 45,000d)Rs. 20,000Correct answer is option 'B'. Can you explain this answer?.
A trader stated retail business. During the year he sold goods worth Rs. 60,000 and for Rs. 1,20,000 out of which only Rs. 1,00,000 was collected during the year. He had a closing stock of Rs. 10,000. His other business expenses for the period were Rs. 20,000 out of which Rs. 5,000 was outstanding at year end His total profit for the year 2008-09 as per the terms of accrual concept was:a)Rs. 30,000b)Rs. 40,000c)Rs. 45,000d)Rs. 20,000Correct answer is option 'B'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A trader stated retail business. During the year he sold goods worth Rs. 60,000 and for Rs. 1,20,000 out of which only Rs. 1,00,000 was collected during the year. He had a closing stock of Rs. 10,000. His other business expenses for the period were Rs. 20,000 out of which Rs. 5,000 was outstanding at year end His total profit for the year 2008-09 as per the terms of accrual concept was:a)Rs. 30,000b)Rs. 40,000c)Rs. 45,000d)Rs. 20,000Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A trader stated retail business. During the year he sold goods worth Rs. 60,000 and for Rs. 1,20,000 out of which only Rs. 1,00,000 was collected during the year. He had a closing stock of Rs. 10,000. His other business expenses for the period were Rs. 20,000 out of which Rs. 5,000 was outstanding at year end His total profit for the year 2008-09 as per the terms of accrual concept was:a)Rs. 30,000b)Rs. 40,000c)Rs. 45,000d)Rs. 20,000Correct answer is option 'B'. Can you explain this answer?.
Solutions for A trader stated retail business. During the year he sold goods worth Rs. 60,000 and for Rs. 1,20,000 out of which only Rs. 1,00,000 was collected during the year. He had a closing stock of Rs. 10,000. His other business expenses for the period were Rs. 20,000 out of which Rs. 5,000 was outstanding at year end His total profit for the year 2008-09 as per the terms of accrual concept was:a)Rs. 30,000b)Rs. 40,000c)Rs. 45,000d)Rs. 20,000Correct answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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A trader stated retail business. During the year he sold goods worth Rs. 60,000 and for Rs. 1,20,000 out of which only Rs. 1,00,000 was collected during the year. He had a closing stock of Rs. 10,000. His other business expenses for the period were Rs. 20,000 out of which Rs. 5,000 was outstanding at year end His total profit for the year 2008-09 as per the terms of accrual concept was:a)Rs. 30,000b)Rs. 40,000c)Rs. 45,000d)Rs. 20,000Correct answer is option 'B'. Can you explain this answer?, a detailed solution for A trader stated retail business. During the year he sold goods worth Rs. 60,000 and for Rs. 1,20,000 out of which only Rs. 1,00,000 was collected during the year. He had a closing stock of Rs. 10,000. His other business expenses for the period were Rs. 20,000 out of which Rs. 5,000 was outstanding at year end His total profit for the year 2008-09 as per the terms of accrual concept was:a)Rs. 30,000b)Rs. 40,000c)Rs. 45,000d)Rs. 20,000Correct answer is option 'B'. Can you explain this answer? has been provided alongside types of A trader stated retail business. During the year he sold goods worth Rs. 60,000 and for Rs. 1,20,000 out of which only Rs. 1,00,000 was collected during the year. He had a closing stock of Rs. 10,000. His other business expenses for the period were Rs. 20,000 out of which Rs. 5,000 was outstanding at year end His total profit for the year 2008-09 as per the terms of accrual concept was:a)Rs. 30,000b)Rs. 40,000c)Rs. 45,000d)Rs. 20,000Correct answer is option 'B'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice A trader stated retail business. During the year he sold goods worth Rs. 60,000 and for Rs. 1,20,000 out of which only Rs. 1,00,000 was collected during the year. He had a closing stock of Rs. 10,000. His other business expenses for the period were Rs. 20,000 out of which Rs. 5,000 was outstanding at year end His total profit for the year 2008-09 as per the terms of accrual concept was:a)Rs. 30,000b)Rs. 40,000c)Rs. 45,000d)Rs. 20,000Correct answer is option 'B'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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