Select the amount of salary to be shown in Income and Expenditure Account at the end of current accounting year of a Not -for-Profit Organisation. Salary paid during the current accounting year is ₹ 26,000, which includes two months salary of previous year and one month salary of current year is still outstanding.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → ₹24,000
The ₹26,000 paid covers 2 months of last year and 11 months of this year (one month is still unpaid):
Months paid = 2 + 11 = 13 months
Salary per month = ₹26,000 ÷ 13 = ₹2,000
Salary for the current year = 12 × ₹2,000 = ₹24,000
Check: ₹26,000 − ₹4,000 (previous year) + ₹2,000 (outstanding) = ₹24,000