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SSC Financial and Cost Accounting P-1 QUESTION #9611
Question 1
A trader purchases goods for Rs. 1,500 on credit and the same day sells them to a customer for Rs. 2,000, who pays only Rs. 1,000 in cash immediately. What is the trader's actual profit on this transaction, assuming no other expenses?
  • Rs. 1,000 (cash in hand)
  • Rs. 500✔️
  • Rs. 2,000 less Rs. 1,500 = Rs. 500
  • Cannot be determined until full cash is received
Correct Answer Explanation
Profit is calculated as total income minus total expenses, regardless of whether cash has been received or paid. Total income = Rs. 2,000; total cost = Rs. 1,500; Profit = Rs. 500. Cash in hand of Rs. 1,000 does not equal profit because Rs. 1,000 receivable and Rs. 1,500 payable are still outstanding.