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Page 1
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING
Question No. 1 is compulsory.
Attempt any four questions from the remaining five questions.
Wherever necessary, suitable assumptions should be made and disclosed by way of note
forming part of the answer.
Working Notes should form part of the answer.
Question 1
(a) State with reasons, whether the following statements are True or False:
(i) As per concept of conservatism the accountant should provide for all possible losses
but should not anticipate income.
(ii) Expenses in connection with obtaining a license for running the Cinema Hall are
Revenue Expenditure.
(iii) Under or over - casting of a subsidiary book is an example of error of commission.
(iv) If Del-credere commission is paid to consignee, the loss of bad debts is to be borne
by the consignor.
(v) Perpetual debentures are payable at the time of liquidation of the company.
(vi) Overhead is defined as the total cost of direct material, direct wages and direct
expenses. (6 x 2 = 12 Marks)
(b) Briefly explain the following terms:
(i) Materiality
(ii) Conservatism
(iii) Extraordinary item
(iv) Floating Charge (4 x 1 = 12 Marks)
(c) Enter the following transactions in Sales Book of Gurgaon Engineers, Gurgaon for
January 2022:
2022
January
5 Sold to Praneet Electricals 10 pieces of microwaves@ ` 8,500/- each less
trade discount 15%
10 Sold to Ajanta plaza 8 pieces of Mixer grinders@ ` 12,500/- each less
trade discount 10%.
© The Institute of Chartered Accountants of India
Page 2
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING
Question No. 1 is compulsory.
Attempt any four questions from the remaining five questions.
Wherever necessary, suitable assumptions should be made and disclosed by way of note
forming part of the answer.
Working Notes should form part of the answer.
Question 1
(a) State with reasons, whether the following statements are True or False:
(i) As per concept of conservatism the accountant should provide for all possible losses
but should not anticipate income.
(ii) Expenses in connection with obtaining a license for running the Cinema Hall are
Revenue Expenditure.
(iii) Under or over - casting of a subsidiary book is an example of error of commission.
(iv) If Del-credere commission is paid to consignee, the loss of bad debts is to be borne
by the consignor.
(v) Perpetual debentures are payable at the time of liquidation of the company.
(vi) Overhead is defined as the total cost of direct material, direct wages and direct
expenses. (6 x 2 = 12 Marks)
(b) Briefly explain the following terms:
(i) Materiality
(ii) Conservatism
(iii) Extraordinary item
(iv) Floating Charge (4 x 1 = 12 Marks)
(c) Enter the following transactions in Sales Book of Gurgaon Engineers, Gurgaon for
January 2022:
2022
January
5 Sold to Praneet Electricals 10 pieces of microwaves@ ` 8,500/- each less
trade discount 15%
10 Sold to Ajanta plaza 8 pieces of Mixer grinders@ ` 12,500/- each less
trade discount 10%.
© The Institute of Chartered Accountants of India
2 FOUNDATION EXAMINATION: JUNE, 2023
20 Sold to Naveen traders, 15 pieces of juicers@ ` 5,500/- each less trade
discount 5%
(4 Marks)
Answer
(a) (i) True: Conservatism states that the accountant should not anticipate any future income,
however they should provide for all possible losses.
(ii) False: The Cinema Hall could not be started without license. Expenditure incurred to
obtain the license is pre-operative expense and hence it is to be capitalised. Such
expenses are amortised over a period of time.
(iii) True: If an amount is posted in the wrong account or it is written on the wrong side or
the totals are wrong or a wrong balance is struck, it will be a case of “errors of
commission.” Thus, under or over casting of subsidiary books is an example of error
of commission.
(iv) False: To increase the sale and to encourage the consignee to make credit sales, the
consignor provides an additional commission generally known as del-credere
commission. In case del-credere commission is provided to consignee, bad debts is
no more the loss of the consignor and it is borne by the consignee.
(v) True: Perpetual debentures, also known as irredeemable debentures are not
repayable during the life time of the company.
(vi) False: Overhead is defined as total cost of indirect material, indirect wages and
indirect expenses. Indirect material, wages and expenses cannot be directly linked to
unit produced.
(b) (i) Materiality refers to all relatively important and relevant items, i.e., items the knowledge
of which might influence the decisions of the user of the financial statements are disclosed
in the financial statements.
(ii) Conservatism states that the accountant should not anticipate any future income
however they should provide for all possible losses. When there are many alternative
values of an asset, an accountant should choose the method which leads to the lesser
value.
(iii) Extraordinary items are income or expenses that arise from events or transactions
that are clearly distinct from the ordinary activities of the enterprise and, therefore, are
not expected to recur frequently or regularly.
(iv) Floating charge is a general charge on some or all assets of an enterprise which are
not attached to specific assets and are given as security against a debt.
© The Institute of Chartered Accountants of India
Page 3
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING
Question No. 1 is compulsory.
Attempt any four questions from the remaining five questions.
Wherever necessary, suitable assumptions should be made and disclosed by way of note
forming part of the answer.
Working Notes should form part of the answer.
Question 1
(a) State with reasons, whether the following statements are True or False:
(i) As per concept of conservatism the accountant should provide for all possible losses
but should not anticipate income.
(ii) Expenses in connection with obtaining a license for running the Cinema Hall are
Revenue Expenditure.
(iii) Under or over - casting of a subsidiary book is an example of error of commission.
(iv) If Del-credere commission is paid to consignee, the loss of bad debts is to be borne
by the consignor.
(v) Perpetual debentures are payable at the time of liquidation of the company.
(vi) Overhead is defined as the total cost of direct material, direct wages and direct
expenses. (6 x 2 = 12 Marks)
(b) Briefly explain the following terms:
(i) Materiality
(ii) Conservatism
(iii) Extraordinary item
(iv) Floating Charge (4 x 1 = 12 Marks)
(c) Enter the following transactions in Sales Book of Gurgaon Engineers, Gurgaon for
January 2022:
2022
January
5 Sold to Praneet Electricals 10 pieces of microwaves@ ` 8,500/- each less
trade discount 15%
10 Sold to Ajanta plaza 8 pieces of Mixer grinders@ ` 12,500/- each less
trade discount 10%.
© The Institute of Chartered Accountants of India
2 FOUNDATION EXAMINATION: JUNE, 2023
20 Sold to Naveen traders, 15 pieces of juicers@ ` 5,500/- each less trade
discount 5%
(4 Marks)
Answer
(a) (i) True: Conservatism states that the accountant should not anticipate any future income,
however they should provide for all possible losses.
(ii) False: The Cinema Hall could not be started without license. Expenditure incurred to
obtain the license is pre-operative expense and hence it is to be capitalised. Such
expenses are amortised over a period of time.
(iii) True: If an amount is posted in the wrong account or it is written on the wrong side or
the totals are wrong or a wrong balance is struck, it will be a case of “errors of
commission.” Thus, under or over casting of subsidiary books is an example of error
of commission.
(iv) False: To increase the sale and to encourage the consignee to make credit sales, the
consignor provides an additional commission generally known as del-credere
commission. In case del-credere commission is provided to consignee, bad debts is
no more the loss of the consignor and it is borne by the consignee.
(v) True: Perpetual debentures, also known as irredeemable debentures are not
repayable during the life time of the company.
(vi) False: Overhead is defined as total cost of indirect material, indirect wages and
indirect expenses. Indirect material, wages and expenses cannot be directly linked to
unit produced.
(b) (i) Materiality refers to all relatively important and relevant items, i.e., items the knowledge
of which might influence the decisions of the user of the financial statements are disclosed
in the financial statements.
(ii) Conservatism states that the accountant should not anticipate any future income
however they should provide for all possible losses. When there are many alternative
values of an asset, an accountant should choose the method which leads to the lesser
value.
(iii) Extraordinary items are income or expenses that arise from events or transactions
that are clearly distinct from the ordinary activities of the enterprise and, therefore, are
not expected to recur frequently or regularly.
(iv) Floating charge is a general charge on some or all assets of an enterprise which are
not attached to specific assets and are given as security against a debt.
© The Institute of Chartered Accountants of India
PAPER – 1 : PRINCIPLES AND PRACTICE OF ACCOUNTING 3
(c) In the Books of Gurgaon Engineers
Sales Book
Date Particulars Gross
Amount
(`)
Trade
Discount
(`)
Net Price
(`)
2022
Jan. 5 Praneet Electricals 10 pieces of
Microwaves
@ ` 8,500 each
Less: 15% discount 85,000 12,750 72,250
10 Ajanta Plaza 8 pieces of
Mixer Grinders @ ` 12,500
each,
Less: 10% trade discount 1,00,000 10,000 90,000
20 Naveen Traders 15 pieces of
Juicers @ ` 5,500 each,
Less: 5% trade discount 82,500 4,125 78,375
2,67,500 26,875 2,40,625
Question 2
(a) The following balances appear in the books of Dheeraj Enterprises:
`
Machinery account as on 01.04.2021 12,00,000
Provision for depreciation account as on 01.04.2021 4,65,000
On 1
st
October, 2021 the Machinery which was purchased on 1
st
April, 2018 for ` 2,00,000
was sold for ` 1,10,000 and on the same date another Machinery was purchased for
` 4,80,000. The firm has been charging depreciation at 10% p.a. on written down value of
the Machinery every year. Prepare the Machinery account, Provision for Depreciation
account and Machinery disposal account for the year ending 31st March, 2022.
(10 Marks)
(b) From the following information prepare a Bank Reconciliation Statement as on 31
st
March
2022 for A Ltd.
`
Bank overdraft as per cash book as 31st March, 2022 15,50,750
© The Institute of Chartered Accountants of India
Page 4
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING
Question No. 1 is compulsory.
Attempt any four questions from the remaining five questions.
Wherever necessary, suitable assumptions should be made and disclosed by way of note
forming part of the answer.
Working Notes should form part of the answer.
Question 1
(a) State with reasons, whether the following statements are True or False:
(i) As per concept of conservatism the accountant should provide for all possible losses
but should not anticipate income.
(ii) Expenses in connection with obtaining a license for running the Cinema Hall are
Revenue Expenditure.
(iii) Under or over - casting of a subsidiary book is an example of error of commission.
(iv) If Del-credere commission is paid to consignee, the loss of bad debts is to be borne
by the consignor.
(v) Perpetual debentures are payable at the time of liquidation of the company.
(vi) Overhead is defined as the total cost of direct material, direct wages and direct
expenses. (6 x 2 = 12 Marks)
(b) Briefly explain the following terms:
(i) Materiality
(ii) Conservatism
(iii) Extraordinary item
(iv) Floating Charge (4 x 1 = 12 Marks)
(c) Enter the following transactions in Sales Book of Gurgaon Engineers, Gurgaon for
January 2022:
2022
January
5 Sold to Praneet Electricals 10 pieces of microwaves@ ` 8,500/- each less
trade discount 15%
10 Sold to Ajanta plaza 8 pieces of Mixer grinders@ ` 12,500/- each less
trade discount 10%.
© The Institute of Chartered Accountants of India
2 FOUNDATION EXAMINATION: JUNE, 2023
20 Sold to Naveen traders, 15 pieces of juicers@ ` 5,500/- each less trade
discount 5%
(4 Marks)
Answer
(a) (i) True: Conservatism states that the accountant should not anticipate any future income,
however they should provide for all possible losses.
(ii) False: The Cinema Hall could not be started without license. Expenditure incurred to
obtain the license is pre-operative expense and hence it is to be capitalised. Such
expenses are amortised over a period of time.
(iii) True: If an amount is posted in the wrong account or it is written on the wrong side or
the totals are wrong or a wrong balance is struck, it will be a case of “errors of
commission.” Thus, under or over casting of subsidiary books is an example of error
of commission.
(iv) False: To increase the sale and to encourage the consignee to make credit sales, the
consignor provides an additional commission generally known as del-credere
commission. In case del-credere commission is provided to consignee, bad debts is
no more the loss of the consignor and it is borne by the consignee.
(v) True: Perpetual debentures, also known as irredeemable debentures are not
repayable during the life time of the company.
(vi) False: Overhead is defined as total cost of indirect material, indirect wages and
indirect expenses. Indirect material, wages and expenses cannot be directly linked to
unit produced.
(b) (i) Materiality refers to all relatively important and relevant items, i.e., items the knowledge
of which might influence the decisions of the user of the financial statements are disclosed
in the financial statements.
(ii) Conservatism states that the accountant should not anticipate any future income
however they should provide for all possible losses. When there are many alternative
values of an asset, an accountant should choose the method which leads to the lesser
value.
(iii) Extraordinary items are income or expenses that arise from events or transactions
that are clearly distinct from the ordinary activities of the enterprise and, therefore, are
not expected to recur frequently or regularly.
(iv) Floating charge is a general charge on some or all assets of an enterprise which are
not attached to specific assets and are given as security against a debt.
© The Institute of Chartered Accountants of India
PAPER – 1 : PRINCIPLES AND PRACTICE OF ACCOUNTING 3
(c) In the Books of Gurgaon Engineers
Sales Book
Date Particulars Gross
Amount
(`)
Trade
Discount
(`)
Net Price
(`)
2022
Jan. 5 Praneet Electricals 10 pieces of
Microwaves
@ ` 8,500 each
Less: 15% discount 85,000 12,750 72,250
10 Ajanta Plaza 8 pieces of
Mixer Grinders @ ` 12,500
each,
Less: 10% trade discount 1,00,000 10,000 90,000
20 Naveen Traders 15 pieces of
Juicers @ ` 5,500 each,
Less: 5% trade discount 82,500 4,125 78,375
2,67,500 26,875 2,40,625
Question 2
(a) The following balances appear in the books of Dheeraj Enterprises:
`
Machinery account as on 01.04.2021 12,00,000
Provision for depreciation account as on 01.04.2021 4,65,000
On 1
st
October, 2021 the Machinery which was purchased on 1
st
April, 2018 for ` 2,00,000
was sold for ` 1,10,000 and on the same date another Machinery was purchased for
` 4,80,000. The firm has been charging depreciation at 10% p.a. on written down value of
the Machinery every year. Prepare the Machinery account, Provision for Depreciation
account and Machinery disposal account for the year ending 31st March, 2022.
(10 Marks)
(b) From the following information prepare a Bank Reconciliation Statement as on 31
st
March
2022 for A Ltd.
`
Bank overdraft as per cash book as 31st March, 2022 15,50,750
© The Institute of Chartered Accountants of India
4 FOUNDATION EXAMINATION: JUNE, 2023
1. Cheques deposited on 15
th
February, 2022 credited on 5
th
April,
2022
12,50,000
2. Interest debited by bank on 31
st
March, 2022 but not entered in Cash
Book
1,75,500
3. Cheques issued before 31
st
March, 2022 but not yet presented 7,75,000
4. On 10
th
March, 2022 bank credited to A Ltd. in error 1,50,000
5. Draft deposited in bank but not credited till 31
st
March, 2022 12,75,000
6. Bills for collection credited by bank but no advice received by the
company
9,45,000
7. Bank charges charged by bank but not entered in cash book 2,85,000
8. Transport subsidy received from the state government directly by
the bank not advised to the company
17,50,000
(5 Marks)
(c) The Profit and Loss account of Ram showed a net profit of ` 5,75,000 after considering
the closing stock of ` 2,55,000 on 31
st
March 2022. Subsequently the following information
was obtained from scrutiny of the books.
(i) Purchases for the year included ` 10,500 paid for electrical fittings of the shop.
(ii) Ram gave goods worth of ` 25,000 as free samples for which no entry was made.
(iii) Invoices for goods amounting to ` 1,85,000 have been entered on 29th March 2022
but were not included in the stock.
(iv) Sales amounting to ` 2,05,000 were dispatched on 27
th
March but were included in
sales of April, 2022.
(v) Goods costing ` 55,000 were sent on sale or return basis in March, 2022 at a margin
of profit of 33½ % on cost. Approval was given in April, 2022 but these were
considered as sales in March, 2022.
Calculate. the value of stock as on 31st March, 2022 and the adjusted net profit for the
year ended on that date. (5 Marks)
Answer
(a) Dr. Machinery Account (at original Cost) Cr.
Date Particulars ` Date Particulars `
01.04.2021 To Balance b/d 12,00,000 01.10.2021 By Disposed
Machinery A/c
2,00,000
01.10.2021 To Bank A/c 4,80,000 31.03.2022 By Balance c/d 14,80,000
16,80,000 16,80,000
© The Institute of Chartered Accountants of India
Page 5
PAPER – 1: PRINCIPLES AND PRACTICE OF ACCOUNTING
Question No. 1 is compulsory.
Attempt any four questions from the remaining five questions.
Wherever necessary, suitable assumptions should be made and disclosed by way of note
forming part of the answer.
Working Notes should form part of the answer.
Question 1
(a) State with reasons, whether the following statements are True or False:
(i) As per concept of conservatism the accountant should provide for all possible losses
but should not anticipate income.
(ii) Expenses in connection with obtaining a license for running the Cinema Hall are
Revenue Expenditure.
(iii) Under or over - casting of a subsidiary book is an example of error of commission.
(iv) If Del-credere commission is paid to consignee, the loss of bad debts is to be borne
by the consignor.
(v) Perpetual debentures are payable at the time of liquidation of the company.
(vi) Overhead is defined as the total cost of direct material, direct wages and direct
expenses. (6 x 2 = 12 Marks)
(b) Briefly explain the following terms:
(i) Materiality
(ii) Conservatism
(iii) Extraordinary item
(iv) Floating Charge (4 x 1 = 12 Marks)
(c) Enter the following transactions in Sales Book of Gurgaon Engineers, Gurgaon for
January 2022:
2022
January
5 Sold to Praneet Electricals 10 pieces of microwaves@ ` 8,500/- each less
trade discount 15%
10 Sold to Ajanta plaza 8 pieces of Mixer grinders@ ` 12,500/- each less
trade discount 10%.
© The Institute of Chartered Accountants of India
2 FOUNDATION EXAMINATION: JUNE, 2023
20 Sold to Naveen traders, 15 pieces of juicers@ ` 5,500/- each less trade
discount 5%
(4 Marks)
Answer
(a) (i) True: Conservatism states that the accountant should not anticipate any future income,
however they should provide for all possible losses.
(ii) False: The Cinema Hall could not be started without license. Expenditure incurred to
obtain the license is pre-operative expense and hence it is to be capitalised. Such
expenses are amortised over a period of time.
(iii) True: If an amount is posted in the wrong account or it is written on the wrong side or
the totals are wrong or a wrong balance is struck, it will be a case of “errors of
commission.” Thus, under or over casting of subsidiary books is an example of error
of commission.
(iv) False: To increase the sale and to encourage the consignee to make credit sales, the
consignor provides an additional commission generally known as del-credere
commission. In case del-credere commission is provided to consignee, bad debts is
no more the loss of the consignor and it is borne by the consignee.
(v) True: Perpetual debentures, also known as irredeemable debentures are not
repayable during the life time of the company.
(vi) False: Overhead is defined as total cost of indirect material, indirect wages and
indirect expenses. Indirect material, wages and expenses cannot be directly linked to
unit produced.
(b) (i) Materiality refers to all relatively important and relevant items, i.e., items the knowledge
of which might influence the decisions of the user of the financial statements are disclosed
in the financial statements.
(ii) Conservatism states that the accountant should not anticipate any future income
however they should provide for all possible losses. When there are many alternative
values of an asset, an accountant should choose the method which leads to the lesser
value.
(iii) Extraordinary items are income or expenses that arise from events or transactions
that are clearly distinct from the ordinary activities of the enterprise and, therefore, are
not expected to recur frequently or regularly.
(iv) Floating charge is a general charge on some or all assets of an enterprise which are
not attached to specific assets and are given as security against a debt.
© The Institute of Chartered Accountants of India
PAPER – 1 : PRINCIPLES AND PRACTICE OF ACCOUNTING 3
(c) In the Books of Gurgaon Engineers
Sales Book
Date Particulars Gross
Amount
(`)
Trade
Discount
(`)
Net Price
(`)
2022
Jan. 5 Praneet Electricals 10 pieces of
Microwaves
@ ` 8,500 each
Less: 15% discount 85,000 12,750 72,250
10 Ajanta Plaza 8 pieces of
Mixer Grinders @ ` 12,500
each,
Less: 10% trade discount 1,00,000 10,000 90,000
20 Naveen Traders 15 pieces of
Juicers @ ` 5,500 each,
Less: 5% trade discount 82,500 4,125 78,375
2,67,500 26,875 2,40,625
Question 2
(a) The following balances appear in the books of Dheeraj Enterprises:
`
Machinery account as on 01.04.2021 12,00,000
Provision for depreciation account as on 01.04.2021 4,65,000
On 1
st
October, 2021 the Machinery which was purchased on 1
st
April, 2018 for ` 2,00,000
was sold for ` 1,10,000 and on the same date another Machinery was purchased for
` 4,80,000. The firm has been charging depreciation at 10% p.a. on written down value of
the Machinery every year. Prepare the Machinery account, Provision for Depreciation
account and Machinery disposal account for the year ending 31st March, 2022.
(10 Marks)
(b) From the following information prepare a Bank Reconciliation Statement as on 31
st
March
2022 for A Ltd.
`
Bank overdraft as per cash book as 31st March, 2022 15,50,750
© The Institute of Chartered Accountants of India
4 FOUNDATION EXAMINATION: JUNE, 2023
1. Cheques deposited on 15
th
February, 2022 credited on 5
th
April,
2022
12,50,000
2. Interest debited by bank on 31
st
March, 2022 but not entered in Cash
Book
1,75,500
3. Cheques issued before 31
st
March, 2022 but not yet presented 7,75,000
4. On 10
th
March, 2022 bank credited to A Ltd. in error 1,50,000
5. Draft deposited in bank but not credited till 31
st
March, 2022 12,75,000
6. Bills for collection credited by bank but no advice received by the
company
9,45,000
7. Bank charges charged by bank but not entered in cash book 2,85,000
8. Transport subsidy received from the state government directly by
the bank not advised to the company
17,50,000
(5 Marks)
(c) The Profit and Loss account of Ram showed a net profit of ` 5,75,000 after considering
the closing stock of ` 2,55,000 on 31
st
March 2022. Subsequently the following information
was obtained from scrutiny of the books.
(i) Purchases for the year included ` 10,500 paid for electrical fittings of the shop.
(ii) Ram gave goods worth of ` 25,000 as free samples for which no entry was made.
(iii) Invoices for goods amounting to ` 1,85,000 have been entered on 29th March 2022
but were not included in the stock.
(iv) Sales amounting to ` 2,05,000 were dispatched on 27
th
March but were included in
sales of April, 2022.
(v) Goods costing ` 55,000 were sent on sale or return basis in March, 2022 at a margin
of profit of 33½ % on cost. Approval was given in April, 2022 but these were
considered as sales in March, 2022.
Calculate. the value of stock as on 31st March, 2022 and the adjusted net profit for the
year ended on that date. (5 Marks)
Answer
(a) Dr. Machinery Account (at original Cost) Cr.
Date Particulars ` Date Particulars `
01.04.2021 To Balance b/d 12,00,000 01.10.2021 By Disposed
Machinery A/c
2,00,000
01.10.2021 To Bank A/c 4,80,000 31.03.2022 By Balance c/d 14,80,000
16,80,000 16,80,000
© The Institute of Chartered Accountants of India
PAPER – 1 : PRINCIPLES AND PRACTICE OF ACCOUNTING 5
Dr. Provision for Depreciation Account Cr.
Date Particulars ` Date Particulars `
01.10.2021 To Disposed
Machinery A/c
61,490 01.04.2021 By Balance b/d 4,65,000
31.03.2022 To Balance c/d 4,93,720 1.10.2021 By Depreciation 7,290
31.03.2022 By Depreciation
A/c
82,920
5,55,210 5,55,210
Dr. Disposed Machinery Account Cr.
Date Particulars ` Date Particulars `
01.10.2021 To Machinery A/c 2,00,000 01.10.2021 By Provision for
Depreciation
A/c
61,490
By Bank A/c 1,10,000
By Profit and
Loss A/c
28,510
2,00,000 2,00,000
Working Notes:
1. Calculation of Profit/Loss on Sale of Machinery
Particulars `
A. Original Cost 2,00,000
B. Less: Depreciation @ 10% WDV p.a. for 3½ years
Year Cost/WDV Depreciation@10%
1 2,00,000 20,000
2. 1,80,000 18,000
3 1,62,000 16,200
4 1,45,800 7,290 (6 Months)
61,490
C. Book Value as on date of Sale (A – B) 1,38,510
D. Less: Sale proceeds 1,10,000
E. Loss on Sale (C – D) 28,510
© The Institute of Chartered Accountants of India
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FAQs on Business Laws and Business Correspondence and Reporting (Paper-2) - June 2023 (Answer Key) - Business Laws for CA Foundation
| 1. What are the key components of business correspondence? |  |
Ans. The key components of business correspondence include a clear subject line, a proper salutation, a well-structured body that conveys the intended message, a polite closing, and the sender's signature. It's important to maintain a professional tone and use correct grammar and punctuation throughout the correspondence.
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Ans. Understanding business laws can benefit a business by ensuring compliance with legal regulations, reducing the risk of legal disputes, protecting the company's intellectual property, and fostering ethical business practices. This knowledge helps businesses navigate contracts, employment laws, and consumer protection laws effectively.
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Ans. Reporting in business is important as it provides stakeholders with essential information regarding the company's performance, financial health, and operational efficiency. It aids in decision-making, helps identify areas for improvement, and ensures transparency and accountability within the organization.
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Ans. Typical documents included in business correspondence are letters, emails, memos, reports, and proposals. Each type serves a specific purpose, such as communicating updates, making requests, or providing information to stakeholders.
| 5. How can one improve their business writing skills? | |
Ans. One can improve their business writing skills by practicing clear and concise writing, reading well-crafted business documents, seeking feedback from peers, and attending writing workshops. Additionally, familiarizing oneself with business terminology and focusing on the audience's needs can enhance writing effectiveness.
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Oct 06, 2025
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