Question : In the year 2020-21, salaries paid amounted to Rs.1,20,000. Find the amount to be debited to Income and Expenditure Account for the year ending 31st march 2021 after considering the following information:
| Particulars | Amount |
| Outstanding Salaries on 31-3-2020 | 9000 |
| Outstanding Salaries on 31-3-2021 | 13500 |
| Prepaid salaries on 31-3-2020 | 5400 |
| Prepaid salaries on 31-3-2021 | 4200 |
Option 1: Rs. 1,29,000
Option 2: Rs. 1,14,300
Option 3: Rs. 1,25,700
Option 4: Rs. 1,38,900
Correct Answer: Rs. 1,25,700
Solution :
| Particulars | Amount |
| Salary paid in 2020-21 | 120000 |
| Add: Unpaid salary on 31-3-2021 | 13500 |
| Add: Advance salary on 31-3-2020 | 5400 |
| Less: Unpaid Salary on 31-3-2020 | 9000 |
| Less: Advance Salary on 31-3-2021 | 4200 |
| Amount recorded in Income and Expenditure A/c | 125700 |
Hence, the correct option is 3.
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