A business pays Rs. 90,000 for an expense during the year. The expense payable is Rs. 12,000 at the beginning and Rs. 18,000 at the end. What is the expense for the year?
Correct answer: C. Rs. 96,000
- A. Rs. 84,000
- B. Rs. 90,000
- C. Rs. 96,000
- D. Rs. 120,000
Explanation
Expense incurred equals cash paid plus closing outstanding expense minus opening outstanding expense. The calculation is Rs. 90,000 plus Rs. 18,000 minus Rs. 12,000, giving Rs. 96,000.
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About Incomplete Records
Incomplete records require profit and financial position to be reconstructed when a complete double-entry system is unavailable. Methods include statements of affairs, capital comparisons, control accounts, cash summaries and margin calculations to find missing sales, purchases, expenses, assets, liabilities and drawings, while distinguishing business profit from changes in capital.
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