allerySalaries paid ₹23,000; opening O/S ₹1,400; opening prepaid ₹400; closing O/S ₹1,800; closing prepaid ₹600. I&E debit:
A₹23,000 paid only
B₹24,200 with both adj
C₹23,200 net adjusted
D₹22,800 net adjusted
Answer & Solution
Correct answer: C. ₹23,200 net adjusted
1. Start with cash paid ₹23,000.
2. Add closing O/S ₹1,800; less closing prepaid ₹600.
3. Reverse opening O/S ₹1,400; add opening prepaid ₹400.
4. = 23,000 + 1,800 − 600 − 1,400 + 400 = ₹23,200.
_Source: ICAI BoS Foundation Paper 1, Ch 8 "NPO", Illustration 3_
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