Subscription received during the year is ₹20,000; amount received in advance for the next year is ₹1,200; amount outstanding for the current year is ₹1,600. Select the amount of subscription to be credited to the Income & Expenditure Account is:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) - ₹20,400.
Subscription received during the year = ₹20,000
Add: Amount outstanding for the current year = 1,600
= (20,000 + 1,600)
= ₹21,600
Less: Amount received in advance for next year = 1,200
= (21,600 - 1,200)
= ₹20,400
This ₹20400 is the amount of subscription that will be credited to the income and expenditure account.