Salary paid in cash during the current year was Rs80,000; Outstanding salary at the end was Rs4,000; Salary paid in advance last year pertaining to the current year was Rs3,200; paid in advance during current year for next year was Rs5,000. The amount debited to Income and Expenditure Account will be:
Rs. 85,800
Incorrect AnswerRs. 77,800
Incorrect AnswerRs. 84,200
Incorrect AnswerRs. 82,200
Correct AnswerExplanation:
Let's break down the different components needed to calculate the salary expense for the Income and Expenditure Account:
- Salary paid in cash during the year: Rs. 80,000
- Outstanding salary at the end of the year: Rs. 4,000 (this is added to account for the salary expense incurred but not yet paid)
- Salary paid in advance last year: Rs. 3,200 (this is added because it was received last year but relates to this year)
- Salary paid in advance during current year for next year: Rs. 5,000 (this is not included as it pertains to the next year)
Salary debited to income & expenditure A/c = 80,000 + 4,000 + 3,200 - 5,000 = Rs 82,200
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By: santosh