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During the financial year 2018-19 mohan had cash sales of ₹90000 and credit sales of ₹60000. His expenses for the year were ₹ 70000 out of which ₹30000 is still to be paid. Find out mohan income for 2018-19 following the cash basis of accounting?
Most Upvoted Answer
During the financial year 2018-19 mohan had cash sales of ₹90000 and c...
Mohan's Income for 2018-19 using Cash Basis of Accounting

Sales:
- Cash Sales = ₹90000
- Credit Sales = ₹0 (not considered under cash basis of accounting)

Total Sales = ₹90000

Expenses:
- Paid Expenses = ₹40000 (₹70000 - ₹30000)
- Unpaid Expenses = ₹0 (not considered under cash basis of accounting)

Total Expenses = ₹40000

Income:
- Income = Total Sales - Total Expenses
- Income = ₹90000 - ₹40000
- Income = ₹50000

Explanation:
Cash basis of accounting is a method of accounting where only cash transactions are recorded. In this method, only cash sales and expenses paid in cash are considered. Credit sales and unpaid expenses are not recorded.

In the given scenario, Mohan had cash sales of ₹90000 and credit sales of ₹60000. However, as we are following the cash basis of accounting, we will only consider the cash sales which are ₹90000.

Mohan's expenses for the year were ₹70000, out of which ₹30000 is still to be paid. As per the cash basis of accounting, we will only consider the expenses paid in cash which are ₹40000 (₹70000 - ₹30000).

Therefore, Mohan's income for 2018-19 using the cash basis of accounting is ₹50000 (Total Sales - Total Expenses).
Community Answer
During the financial year 2018-19 mohan had cash sales of ₹90000 and c...
Mohan's income =90000
Mohan's expenses =40000(70000-30000)

Hope its useful ..!!!!
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During the financial year 2018-19 mohan had cash sales of ₹90000 and credit sales of ₹60000. His expenses for the year were ₹ 70000 out of which ₹30000 is still to be paid. Find out mohan income for 2018-19 following the cash basis of accounting?
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