CA Foundation · Accounting · Financial Statements of Not-for-Profit Organisations
Kaveri Social Club paid salaries of ₹3,60,000 during the year ended 31 March 2025. Salaries outstanding were ₹30,000 on 1 April 2024 and ₹45,000 on 31 March 2025. Salaries prepaid at 31 March 2025 were nil. What amount of salaries is debited to the Income and Expenditure Account?
The expense is ₹3,75,000. Add closing outstanding salaries of ₹45,000 to the cash paid of ₹3,60,000, then deduct the opening outstanding of ₹30,000 because it relates to the previous year. Only the current year's salary is charged.
- A₹3,75,000Correct
- B₹3,45,000
- C₹3,60,000
- D₹4,35,000
Explanation
Expense = Paid 3,60,000 + closing outstanding 45,000 − opening outstanding 30,000 = ₹3,75,000. The option ₹3,45,000 results from reversing the outstanding adjustments.
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