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If a business has invested some of money in shares and the market value of shares reduced buy 500 rupees should I show this reduction of 500 rupees in profit and loss account? Answer only and only in yes or no.?
Most Upvoted Answer
If a business has invested some of money in shares and the market valu...
Yes
- Explanation:
Yes, the reduction of 500 rupees in the market value of shares should be shown in the profit and loss account. This reduction represents a loss in the value of the investment made by the business. In accounting, it is important to accurately reflect all gains and losses in the financial statements to provide a true and fair view of the business's financial position.
- Impact on Profit and Loss Account:
Showing the reduction of 500 rupees in the profit and loss account will result in a decrease in the profit of the business for the period. This decrease will be reflected in the income statement as a loss on the investment in shares.
- Importance of Accurate Reporting:
Accurate reporting of all financial transactions, including gains and losses on investments, is crucial for stakeholders to make informed decisions. By showing the reduction in the market value of shares in the profit and loss account, the business can provide transparency and accountability in its financial reporting.
- Compliance with Accounting Standards:
Following accounting standards and principles, such as the principle of prudence, requires businesses to recognize losses on investments when they occur. By including the reduction in the market value of shares in the profit and loss account, the business can adhere to these standards and ensure compliance with regulatory requirements.
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If a business has invested some of money in shares and the market value of shares reduced buy 500 rupees should I show this reduction of 500 rupees in profit and loss account? Answer only and only in yes or no.?
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If a business has invested some of money in shares and the market value of shares reduced buy 500 rupees should I show this reduction of 500 rupees in profit and loss account? Answer only and only in yes or no.? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about If a business has invested some of money in shares and the market value of shares reduced buy 500 rupees should I show this reduction of 500 rupees in profit and loss account? Answer only and only in yes or no.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If a business has invested some of money in shares and the market value of shares reduced buy 500 rupees should I show this reduction of 500 rupees in profit and loss account? Answer only and only in yes or no.?.
If a business has invested some of money in shares and the market value of shares reduced buy 500 rupees should I show this reduction of 500 rupees in profit and loss account? Answer only and only in yes or no.? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about If a business has invested some of money in shares and the market value of shares reduced buy 500 rupees should I show this reduction of 500 rupees in profit and loss account? Answer only and only in yes or no.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If a business has invested some of money in shares and the market value of shares reduced buy 500 rupees should I show this reduction of 500 rupees in profit and loss account? Answer only and only in yes or no.?.
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