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4. Vijay, a consultant during the financial year 2012-13 earned Rs.4, 00,000. Out of which he received Rs.3, 50,000. He incurred an expense of Rs.1, 70,000, out of Rs. 40,000 are outstanding. He also received consultancy fee relating to previous year Rs. 45,000 and also paid Rs.20, 000 expenses of the last year. You are required to determine his income for the last year if: i)he follows Cash Basis of Accounting and ii)he follows Accrual Basis of Accounting.?
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4. Vijay, a consultant during the financial year 2012-13 earned Rs.4, ...
cash basis: Total amount of cash received and paid for the period is taken. No adjustment needed for outstanding or advance receipt or payment to be made.
Receipt - 350000+45000 = 395000
Payment - 130000+20000 = 150000
Income - 395000-150000 = 245000
Accrual basis: Here all the adjustments are to be made and only the actual amount for the period to be taken for calculation of receipt and payment. Prior period adjustments are not required.
Receipt - 350000+50000 = 400000
Payment - 130000+40000 = 170000
Income - 400000-170000 = 230000
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4. Vijay, a consultant during the financial year 2012-13 earned Rs.4, ...
Cash Basis of Accounting:
Under the cash basis of accounting, income and expenses are recognized only when cash is received or paid. This means that transactions are recorded based on actual cash inflows and outflows, regardless of when the income was earned or the expense was incurred.
Income:
- Vijay earned Rs.4,00,000 during the financial year 2012-13.
- Out of this, he received Rs.3,50,000.
- He also received consultancy fee relating to the previous year of Rs.45,000.
To determine his income under the cash basis of accounting, we consider only the cash received during the financial year. Therefore, his income would be:
Rs.3,50,000 (received during the financial year) + Rs.45,000 (consultancy fee relating to the previous year) = Rs.3,95,000.
Expenses:
- Vijay incurred an expense of Rs.1,70,000 during the financial year.
- Out of this, Rs.40,000 is outstanding.
Under the cash basis of accounting, we consider only the cash paid during the financial year. Therefore, his expenses would be:
Rs.1,70,000 (incurred during the financial year) - Rs.40,000 (outstanding) = Rs.1,30,000.
Net Income:
Net Income = Income - Expenses
Net Income = Rs.3,95,000 - Rs.1,30,000
Net Income = Rs.2,65,000
Therefore, Vijay's income for the last year, as per the cash basis of accounting, is Rs.2,65,000.
Accrual Basis of Accounting:
Under the accrual basis of accounting, income and expenses are recognized when they are earned or incurred, regardless of when the cash is received or paid. This means that transactions are recorded based on accruals and matching concepts.
Income:
- Vijay earned Rs.4,00,000 during the financial year 2012-13.
- Out of this, he received Rs.3,50,000.
- He also received consultancy fee relating to the previous year of Rs.45,000.
Under the accrual basis of accounting, we consider all the income earned during the financial year, regardless of when the cash is received. Therefore, his income would be:
Rs.4,00,000 (earned during the financial year) + Rs.45,000 (consultancy fee relating to the previous year) = Rs.4,45,000.
Expenses:
- Vijay incurred an expense of Rs.1,70,000 during the financial year.
- Out of this, Rs.40,000 is outstanding.
- He also paid Rs.20,000 expenses of the last year.
Under the accrual basis of accounting, we consider all the expenses incurred during the financial year, regardless of when the cash is paid. Therefore, his expenses would be:
Rs.1,70,000 (incurred during the financial year) + Rs.20,000 (expenses of the last year) - Rs.40,000 (outstanding) = Rs.1,50,000.
Net Income:
Net Income = Income - Expenses
Net Income = Rs.4
Under the cash basis of accounting, income and expenses are recognized only when cash is received or paid. This means that transactions are recorded based on actual cash inflows and outflows, regardless of when the income was earned or the expense was incurred.
Income:
- Vijay earned Rs.4,00,000 during the financial year 2012-13.
- Out of this, he received Rs.3,50,000.
- He also received consultancy fee relating to the previous year of Rs.45,000.
To determine his income under the cash basis of accounting, we consider only the cash received during the financial year. Therefore, his income would be:
Rs.3,50,000 (received during the financial year) + Rs.45,000 (consultancy fee relating to the previous year) = Rs.3,95,000.
Expenses:
- Vijay incurred an expense of Rs.1,70,000 during the financial year.
- Out of this, Rs.40,000 is outstanding.
Under the cash basis of accounting, we consider only the cash paid during the financial year. Therefore, his expenses would be:
Rs.1,70,000 (incurred during the financial year) - Rs.40,000 (outstanding) = Rs.1,30,000.
Net Income:
Net Income = Income - Expenses
Net Income = Rs.3,95,000 - Rs.1,30,000
Net Income = Rs.2,65,000
Therefore, Vijay's income for the last year, as per the cash basis of accounting, is Rs.2,65,000.
Accrual Basis of Accounting:
Under the accrual basis of accounting, income and expenses are recognized when they are earned or incurred, regardless of when the cash is received or paid. This means that transactions are recorded based on accruals and matching concepts.
Income:
- Vijay earned Rs.4,00,000 during the financial year 2012-13.
- Out of this, he received Rs.3,50,000.
- He also received consultancy fee relating to the previous year of Rs.45,000.
Under the accrual basis of accounting, we consider all the income earned during the financial year, regardless of when the cash is received. Therefore, his income would be:
Rs.4,00,000 (earned during the financial year) + Rs.45,000 (consultancy fee relating to the previous year) = Rs.4,45,000.
Expenses:
- Vijay incurred an expense of Rs.1,70,000 during the financial year.
- Out of this, Rs.40,000 is outstanding.
- He also paid Rs.20,000 expenses of the last year.
Under the accrual basis of accounting, we consider all the expenses incurred during the financial year, regardless of when the cash is paid. Therefore, his expenses would be:
Rs.1,70,000 (incurred during the financial year) + Rs.20,000 (expenses of the last year) - Rs.40,000 (outstanding) = Rs.1,50,000.
Net Income:
Net Income = Income - Expenses
Net Income = Rs.4
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4. Vijay, a consultant during the financial year 2012-13 earned Rs.4, 00,000. Out of which he received Rs.3, 50,000. He incurred an expense of Rs.1, 70,000, out of Rs. 40,000 are outstanding. He also received consultancy fee relating to previous year Rs. 45,000 and also paid Rs.20, 000 expenses of the last year. You are required to determine his income for the last year if: i)he follows Cash Basis of Accounting and ii)he follows Accrual Basis of Accounting.?
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4. Vijay, a consultant during the financial year 2012-13 earned Rs.4, 00,000. Out of which he received Rs.3, 50,000. He incurred an expense of Rs.1, 70,000, out of Rs. 40,000 are outstanding. He also received consultancy fee relating to previous year Rs. 45,000 and also paid Rs.20, 000 expenses of the last year. You are required to determine his income for the last year if: i)he follows Cash Basis of Accounting and ii)he follows Accrual Basis of Accounting.? for Class 11 2024 is part of Class 11 preparation. The Question and answers have been prepared according to the Class 11 exam syllabus. Information about 4. Vijay, a consultant during the financial year 2012-13 earned Rs.4, 00,000. Out of which he received Rs.3, 50,000. He incurred an expense of Rs.1, 70,000, out of Rs. 40,000 are outstanding. He also received consultancy fee relating to previous year Rs. 45,000 and also paid Rs.20, 000 expenses of the last year. You are required to determine his income for the last year if: i)he follows Cash Basis of Accounting and ii)he follows Accrual Basis of Accounting.? covers all topics & solutions for Class 11 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 4. Vijay, a consultant during the financial year 2012-13 earned Rs.4, 00,000. Out of which he received Rs.3, 50,000. He incurred an expense of Rs.1, 70,000, out of Rs. 40,000 are outstanding. He also received consultancy fee relating to previous year Rs. 45,000 and also paid Rs.20, 000 expenses of the last year. You are required to determine his income for the last year if: i)he follows Cash Basis of Accounting and ii)he follows Accrual Basis of Accounting.?.
4. Vijay, a consultant during the financial year 2012-13 earned Rs.4, 00,000. Out of which he received Rs.3, 50,000. He incurred an expense of Rs.1, 70,000, out of Rs. 40,000 are outstanding. He also received consultancy fee relating to previous year Rs. 45,000 and also paid Rs.20, 000 expenses of the last year. You are required to determine his income for the last year if: i)he follows Cash Basis of Accounting and ii)he follows Accrual Basis of Accounting.? for Class 11 2024 is part of Class 11 preparation. The Question and answers have been prepared according to the Class 11 exam syllabus. Information about 4. Vijay, a consultant during the financial year 2012-13 earned Rs.4, 00,000. Out of which he received Rs.3, 50,000. He incurred an expense of Rs.1, 70,000, out of Rs. 40,000 are outstanding. He also received consultancy fee relating to previous year Rs. 45,000 and also paid Rs.20, 000 expenses of the last year. You are required to determine his income for the last year if: i)he follows Cash Basis of Accounting and ii)he follows Accrual Basis of Accounting.? covers all topics & solutions for Class 11 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 4. Vijay, a consultant during the financial year 2012-13 earned Rs.4, 00,000. Out of which he received Rs.3, 50,000. He incurred an expense of Rs.1, 70,000, out of Rs. 40,000 are outstanding. He also received consultancy fee relating to previous year Rs. 45,000 and also paid Rs.20, 000 expenses of the last year. You are required to determine his income for the last year if: i)he follows Cash Basis of Accounting and ii)he follows Accrual Basis of Accounting.?.
Solutions for 4. Vijay, a consultant during the financial year 2012-13 earned Rs.4, 00,000. Out of which he received Rs.3, 50,000. He incurred an expense of Rs.1, 70,000, out of Rs. 40,000 are outstanding. He also received consultancy fee relating to previous year Rs. 45,000 and also paid Rs.20, 000 expenses of the last year. You are required to determine his income for the last year if: i)he follows Cash Basis of Accounting and ii)he follows Accrual Basis of Accounting.? in English & in Hindi are available as part of our courses for Class 11.
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Here you can find the meaning of 4. Vijay, a consultant during the financial year 2012-13 earned Rs.4, 00,000. Out of which he received Rs.3, 50,000. He incurred an expense of Rs.1, 70,000, out of Rs. 40,000 are outstanding. He also received consultancy fee relating to previous year Rs. 45,000 and also paid Rs.20, 000 expenses of the last year. You are required to determine his income for the last year if: i)he follows Cash Basis of Accounting and ii)he follows Accrual Basis of Accounting.? defined & explained in the simplest way possible. Besides giving the explanation of
4. Vijay, a consultant during the financial year 2012-13 earned Rs.4, 00,000. Out of which he received Rs.3, 50,000. He incurred an expense of Rs.1, 70,000, out of Rs. 40,000 are outstanding. He also received consultancy fee relating to previous year Rs. 45,000 and also paid Rs.20, 000 expenses of the last year. You are required to determine his income for the last year if: i)he follows Cash Basis of Accounting and ii)he follows Accrual Basis of Accounting.?, a detailed solution for 4. Vijay, a consultant during the financial year 2012-13 earned Rs.4, 00,000. Out of which he received Rs.3, 50,000. He incurred an expense of Rs.1, 70,000, out of Rs. 40,000 are outstanding. He also received consultancy fee relating to previous year Rs. 45,000 and also paid Rs.20, 000 expenses of the last year. You are required to determine his income for the last year if: i)he follows Cash Basis of Accounting and ii)he follows Accrual Basis of Accounting.? has been provided alongside types of 4. Vijay, a consultant during the financial year 2012-13 earned Rs.4, 00,000. Out of which he received Rs.3, 50,000. He incurred an expense of Rs.1, 70,000, out of Rs. 40,000 are outstanding. He also received consultancy fee relating to previous year Rs. 45,000 and also paid Rs.20, 000 expenses of the last year. You are required to determine his income for the last year if: i)he follows Cash Basis of Accounting and ii)he follows Accrual Basis of Accounting.? theory, EduRev gives you an
ample number of questions to practice 4. Vijay, a consultant during the financial year 2012-13 earned Rs.4, 00,000. Out of which he received Rs.3, 50,000. He incurred an expense of Rs.1, 70,000, out of Rs. 40,000 are outstanding. He also received consultancy fee relating to previous year Rs. 45,000 and also paid Rs.20, 000 expenses of the last year. You are required to determine his income for the last year if: i)he follows Cash Basis of Accounting and ii)he follows Accrual Basis of Accounting.? tests, examples and also practice Class 11 tests.
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