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A proprietor, Mr. A has reported a profit of Rs. 1,25,000 at the end of the financial year after taking into consideration the following amount:
(i). The cost of an assets Rs. 25,000 has been taken as en expense.
(ii). Mr. A is anticipating a profit of Rs. 10,000 on the future sale of a car shown as an asset in his books.
(iii). Salary of Rs. 7,000 payable in the financial year has not been taken into account.
(iv). Mr. A purchased an asset for Rs. 75,000 but its fair value on the date of purchase was Rs. 85,000. Mr. A recorded the value of asset in his books by Rs. 85,000.
Q. Which concept should be followed in the statement (iii)?
(i). The cost of an assets Rs. 25,000 has been taken as en expense.
(ii). Mr. A is anticipating a profit of Rs. 10,000 on the future sale of a car shown as an asset in his books.
(iii). Salary of Rs. 7,000 payable in the financial year has not been taken into account.
(iv). Mr. A purchased an asset for Rs. 75,000 but its fair value on the date of purchase was Rs. 85,000. Mr. A recorded the value of asset in his books by Rs. 85,000.
Q. Which concept should be followed in the statement (iii)?
- a)Materiality
- b)Historical Cost
- c)Current Cost
- d)Accrual
Correct answer is option 'D'. Can you explain this answer?
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A proprietor, Mr. A has reported a profit of Rs. 1,25,000 at the end o...
Accrual Concept in Statement (iii)
The accrual concept in accounting requires that revenue should be recognized when earned and expenses should be recognized when incurred, regardless of when the cash is received or paid. In statement (iii), Mr. A has not taken into account the salary payable of Rs. 7,000. This means that the expense has not been recognized in the financial year, even though it has been incurred.
The accrual concept requires that the salary expense should be recognized in the financial year in which it was incurred, regardless of when it is paid. This is because the employees have provided their services during the financial year, and the company has benefited from those services. Therefore, the salary expense should be recognized in the same financial year.
If the salary expense is not recognized in the financial year, it will result in an understatement of expenses and an overstatement of profits. This will lead to incorrect financial statements, which will not provide a true and fair view of the financial position of the company.
Therefore, the accrual concept should be followed in statement (iii), and the salary expense of Rs. 7,000 should be recognized in the financial year in which it was incurred. This will ensure that the financial statements provide a true and fair view of the financial position of the company.
The accrual concept in accounting requires that revenue should be recognized when earned and expenses should be recognized when incurred, regardless of when the cash is received or paid. In statement (iii), Mr. A has not taken into account the salary payable of Rs. 7,000. This means that the expense has not been recognized in the financial year, even though it has been incurred.
The accrual concept requires that the salary expense should be recognized in the financial year in which it was incurred, regardless of when it is paid. This is because the employees have provided their services during the financial year, and the company has benefited from those services. Therefore, the salary expense should be recognized in the same financial year.
If the salary expense is not recognized in the financial year, it will result in an understatement of expenses and an overstatement of profits. This will lead to incorrect financial statements, which will not provide a true and fair view of the financial position of the company.
Therefore, the accrual concept should be followed in statement (iii), and the salary expense of Rs. 7,000 should be recognized in the financial year in which it was incurred. This will ensure that the financial statements provide a true and fair view of the financial position of the company.
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A proprietor, Mr. A has reported a profit of Rs. 1,25,000 at the end o...
As there is an outstanding accrual concept says the o/s
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A proprietor, Mr. A has reported a profit of Rs. 1,25,000 at the end of the financial year after taking into consideration the following amount:(i). The cost of an assets Rs. 25,000 has been taken as en expense.(ii). Mr. A is anticipating a profit of Rs. 10,000 on the future sale of a car shown as an asset in his books.(iii). Salary of Rs. 7,000 payable in the financial year has not been taken into account.(iv). Mr. A purchased an asset for Rs. 75,000 but its fair value on the date of purchase was Rs. 85,000. Mr. A recorded the value of asset in his books by Rs. 85,000.Q. Which concept should be followed in the statement (iii)?a)Materialityb)Historical Costc)Current Costd)AccrualCorrect answer is option 'D'. Can you explain this answer?
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A proprietor, Mr. A has reported a profit of Rs. 1,25,000 at the end of the financial year after taking into consideration the following amount:(i). The cost of an assets Rs. 25,000 has been taken as en expense.(ii). Mr. A is anticipating a profit of Rs. 10,000 on the future sale of a car shown as an asset in his books.(iii). Salary of Rs. 7,000 payable in the financial year has not been taken into account.(iv). Mr. A purchased an asset for Rs. 75,000 but its fair value on the date of purchase was Rs. 85,000. Mr. A recorded the value of asset in his books by Rs. 85,000.Q. Which concept should be followed in the statement (iii)?a)Materialityb)Historical Costc)Current Costd)AccrualCorrect answer is option 'D'. Can you explain this answer? 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 A proprietor, Mr. A has reported a profit of Rs. 1,25,000 at the end of the financial year after taking into consideration the following amount:(i). The cost of an assets Rs. 25,000 has been taken as en expense.(ii). Mr. A is anticipating a profit of Rs. 10,000 on the future sale of a car shown as an asset in his books.(iii). Salary of Rs. 7,000 payable in the financial year has not been taken into account.(iv). Mr. A purchased an asset for Rs. 75,000 but its fair value on the date of purchase was Rs. 85,000. Mr. A recorded the value of asset in his books by Rs. 85,000.Q. Which concept should be followed in the statement (iii)?a)Materialityb)Historical Costc)Current Costd)AccrualCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A proprietor, Mr. A has reported a profit of Rs. 1,25,000 at the end of the financial year after taking into consideration the following amount:(i). The cost of an assets Rs. 25,000 has been taken as en expense.(ii). Mr. A is anticipating a profit of Rs. 10,000 on the future sale of a car shown as an asset in his books.(iii). Salary of Rs. 7,000 payable in the financial year has not been taken into account.(iv). Mr. A purchased an asset for Rs. 75,000 but its fair value on the date of purchase was Rs. 85,000. Mr. A recorded the value of asset in his books by Rs. 85,000.Q. Which concept should be followed in the statement (iii)?a)Materialityb)Historical Costc)Current Costd)AccrualCorrect answer is option 'D'. Can you explain this answer?.
A proprietor, Mr. A has reported a profit of Rs. 1,25,000 at the end of the financial year after taking into consideration the following amount:(i). The cost of an assets Rs. 25,000 has been taken as en expense.(ii). Mr. A is anticipating a profit of Rs. 10,000 on the future sale of a car shown as an asset in his books.(iii). Salary of Rs. 7,000 payable in the financial year has not been taken into account.(iv). Mr. A purchased an asset for Rs. 75,000 but its fair value on the date of purchase was Rs. 85,000. Mr. A recorded the value of asset in his books by Rs. 85,000.Q. Which concept should be followed in the statement (iii)?a)Materialityb)Historical Costc)Current Costd)AccrualCorrect answer is option 'D'. Can you explain this answer? 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 A proprietor, Mr. A has reported a profit of Rs. 1,25,000 at the end of the financial year after taking into consideration the following amount:(i). The cost of an assets Rs. 25,000 has been taken as en expense.(ii). Mr. A is anticipating a profit of Rs. 10,000 on the future sale of a car shown as an asset in his books.(iii). Salary of Rs. 7,000 payable in the financial year has not been taken into account.(iv). Mr. A purchased an asset for Rs. 75,000 but its fair value on the date of purchase was Rs. 85,000. Mr. A recorded the value of asset in his books by Rs. 85,000.Q. Which concept should be followed in the statement (iii)?a)Materialityb)Historical Costc)Current Costd)AccrualCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A proprietor, Mr. A has reported a profit of Rs. 1,25,000 at the end of the financial year after taking into consideration the following amount:(i). The cost of an assets Rs. 25,000 has been taken as en expense.(ii). Mr. A is anticipating a profit of Rs. 10,000 on the future sale of a car shown as an asset in his books.(iii). Salary of Rs. 7,000 payable in the financial year has not been taken into account.(iv). Mr. A purchased an asset for Rs. 75,000 but its fair value on the date of purchase was Rs. 85,000. Mr. A recorded the value of asset in his books by Rs. 85,000.Q. Which concept should be followed in the statement (iii)?a)Materialityb)Historical Costc)Current Costd)AccrualCorrect answer is option 'D'. Can you explain this answer?.
Solutions for A proprietor, Mr. A has reported a profit of Rs. 1,25,000 at the end of the financial year after taking into consideration the following amount:(i). The cost of an assets Rs. 25,000 has been taken as en expense.(ii). Mr. A is anticipating a profit of Rs. 10,000 on the future sale of a car shown as an asset in his books.(iii). Salary of Rs. 7,000 payable in the financial year has not been taken into account.(iv). Mr. A purchased an asset for Rs. 75,000 but its fair value on the date of purchase was Rs. 85,000. Mr. A recorded the value of asset in his books by Rs. 85,000.Q. Which concept should be followed in the statement (iii)?a)Materialityb)Historical Costc)Current Costd)AccrualCorrect answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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Here you can find the meaning of A proprietor, Mr. A has reported a profit of Rs. 1,25,000 at the end of the financial year after taking into consideration the following amount:(i). The cost of an assets Rs. 25,000 has been taken as en expense.(ii). Mr. A is anticipating a profit of Rs. 10,000 on the future sale of a car shown as an asset in his books.(iii). Salary of Rs. 7,000 payable in the financial year has not been taken into account.(iv). Mr. A purchased an asset for Rs. 75,000 but its fair value on the date of purchase was Rs. 85,000. Mr. A recorded the value of asset in his books by Rs. 85,000.Q. Which concept should be followed in the statement (iii)?a)Materialityb)Historical Costc)Current Costd)AccrualCorrect answer is option 'D'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
A proprietor, Mr. A has reported a profit of Rs. 1,25,000 at the end of the financial year after taking into consideration the following amount:(i). The cost of an assets Rs. 25,000 has been taken as en expense.(ii). Mr. A is anticipating a profit of Rs. 10,000 on the future sale of a car shown as an asset in his books.(iii). Salary of Rs. 7,000 payable in the financial year has not been taken into account.(iv). Mr. A purchased an asset for Rs. 75,000 but its fair value on the date of purchase was Rs. 85,000. Mr. A recorded the value of asset in his books by Rs. 85,000.Q. Which concept should be followed in the statement (iii)?a)Materialityb)Historical Costc)Current Costd)AccrualCorrect answer is option 'D'. Can you explain this answer?, a detailed solution for A proprietor, Mr. A has reported a profit of Rs. 1,25,000 at the end of the financial year after taking into consideration the following amount:(i). The cost of an assets Rs. 25,000 has been taken as en expense.(ii). Mr. A is anticipating a profit of Rs. 10,000 on the future sale of a car shown as an asset in his books.(iii). Salary of Rs. 7,000 payable in the financial year has not been taken into account.(iv). Mr. A purchased an asset for Rs. 75,000 but its fair value on the date of purchase was Rs. 85,000. Mr. A recorded the value of asset in his books by Rs. 85,000.Q. Which concept should be followed in the statement (iii)?a)Materialityb)Historical Costc)Current Costd)AccrualCorrect answer is option 'D'. Can you explain this answer? has been provided alongside types of A proprietor, Mr. A has reported a profit of Rs. 1,25,000 at the end of the financial year after taking into consideration the following amount:(i). The cost of an assets Rs. 25,000 has been taken as en expense.(ii). Mr. A is anticipating a profit of Rs. 10,000 on the future sale of a car shown as an asset in his books.(iii). Salary of Rs. 7,000 payable in the financial year has not been taken into account.(iv). Mr. A purchased an asset for Rs. 75,000 but its fair value on the date of purchase was Rs. 85,000. Mr. A recorded the value of asset in his books by Rs. 85,000.Q. Which concept should be followed in the statement (iii)?a)Materialityb)Historical Costc)Current Costd)AccrualCorrect answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice A proprietor, Mr. A has reported a profit of Rs. 1,25,000 at the end of the financial year after taking into consideration the following amount:(i). The cost of an assets Rs. 25,000 has been taken as en expense.(ii). Mr. A is anticipating a profit of Rs. 10,000 on the future sale of a car shown as an asset in his books.(iii). Salary of Rs. 7,000 payable in the financial year has not been taken into account.(iv). Mr. A purchased an asset for Rs. 75,000 but its fair value on the date of purchase was Rs. 85,000. Mr. A recorded the value of asset in his books by Rs. 85,000.Q. Which concept should be followed in the statement (iii)?a)Materialityb)Historical Costc)Current Costd)AccrualCorrect answer is option 'D'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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