CMA Intermediate · Financial Accounting · Accounting Fundamentals
Arjun, a sole trader, has a Trial Balance showing Salaries Rs 1,20,000. Adjustments: salary for March 2026 of Rs 10,000 is outstanding, and Rs 15,000 of the salaries paid relates to Arjun's personal household servant and should be treated as drawings. What salary expense should be debited to the Profit and Loss Account for the year ended 31 March 2026?
The salary expense is Rs 1,15,000. Rs 15,000 of the amount paid is personal and goes to drawings, reducing business salary to Rs 1,05,000. The outstanding Rs 10,000 for March belongs to this year and is added, giving Rs 1,15,000.
- ARs 1,15,000Correct
- BRs 1,05,000
- CRs 1,30,000
- DRs 1,45,000
Explanation
Salary per trial balance is 1,20,000. Remove personal portion 15,000 (drawings): 1,05,000. Add outstanding 10,000: 1,15,000. Rs 1,05,000 omits the outstanding amount, and Rs 1,30,000 ignores the drawings.
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