What is accrual concept?
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Answer / h.r. sreepada bhagi
As per Accrual Concept of Accounting Expenses & Revenues are
accounted in the accounting period to which it relates
(accounted in the year of accrual)and not when the same is
paid or received.
As against Accrual concept, expenses and incomes are
accounted when they are settled by making payment between
the parties to the transaction.
Is This Answer Correct ? | 23 Yes | 1 No |
Answer / pragadisan
Business transactions are recorded when they occur and not when the related payments are received or made. This concept is called accrual basis of accounting and it is fundamental to the usefulness of financial accounting information.
Is This Answer Correct ? | 4 Yes | 2 No |
Answer / vinay kumar. pagidikondala
According to Accrual concept is air transactions even though
not yet settled in cash are taken in to accounts.
Is This Answer Correct ? | 8 Yes | 15 No |
Answer / vaseem ahmed
Accrual Concept is refers to Double Entry system.
Double Entry system of book keeping is known as Accrual
Concept of Accounting.
Is This Answer Correct ? | 6 Yes | 16 No |
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Manoj & Mahavir joined a firm drawing salary of Rs 25000 per month.After serving 3 yrs ,they started business of their own in partnership,contributing Rs200000(expected life 10 yrs,bought spare parts worth Rs 33000 from Kundu on credit.Office supplies were purchased for cash.Initially they were very busy in conducting their business operations but by the end of the 1st year,31/12/2005 they were disappointed when they found their bank balances.Following is the summary of their bank statement. Receipts: Share Capital Rs 250000 Collections from Customers 412000 Payments: Equipment 200000 Salaries of Assistants 88000 Rent advance for 2 yrs 96000 On-year ins. Policy on equipment 12000 Office stationery 27000 Payment to Kundu 29000 Withdrawals of Manoj 90000 Withdrawals of Mahavir 90000 Closing balance c/d 30000 ----------- Total : 6,62,000 Still amount receivable from customers for services to them amounted to Rs 30,000 & closing balance of office stationery is Rs2000,spare parts Rs2600 were utilised by the end of the year .Prepare trial balance with the available information and show total. Also what is the net profit.