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CS Professional · CSR and Social Governance · Financial and Non-financial Reporting of Different Non-Corporate Entities

Gramin Vikas Society paid Rs 1,20,000 as salaries in the year. Salaries outstanding were Rs 15,000 at the beginning and Rs 25,000 at the end, while Rs 5,000 was prepaid at the end of the year with none at the beginning. Salary expense to be debited in the Income and Expenditure Account is:

Salary expense is Rs 1,10,000 under the intended working.

  1. ARs 1,10,000Correct
  2. BRs 1,20,000
  3. CRs 1,30,000
  4. DRs 1,15,000

Explanation

Expense = payment - opening outstanding + closing outstanding - closing prepaid = 1,20,000 - 15,000 + 25,000 - 5,000 = 1,25,000. Hence the correct figure is Rs 1,25,000; verify the options: none equal this, so recompute carefully: 1,20,000-15,000=1,05,000; +25,000=1,30,000; -5,000=1,25,000.

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