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A trader has made a sale of Rs.75,500 out of which cash sales amounted to Rs.25,500. He is of the view that in the Financials Statements for the year, he shall show a sales of Rs 75,500 & trade receivables of Rs.50,000. Which concept is followed by him?

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A trader has made a sale of Rs.75,500 out of which cash sales amounted to Rs.25,500. He is of the view that in the Financials Statements for the year, he shall show a sales of Rs 75,500 & trade receivables of Rs.50,000. Which concept is followed by him? Answer: Accrual Basis of accounting

The trader is following the Accrual Concept of accounting, which recognizes revenue when it is earned, regardless of when the cash is received, and expenses when they are incurred, not just when paid. This is why the trader records the total sales of Rs. 75,500 (both cash and credit) and the Rs. 50,000 in trade receivables (money owed by customers) in the financial statements.

Question context

This question is part of 📚 General Knowledge within the broader 🌐 Current Affairs & GK subject and appears in the SPSC – Sindh Public Service Commission preparation collection. Reviewing the answer together with nearby questions helps reinforce the underlying concept and identify how it may appear in competitive exams.