Identify the concept / convention / principle followed/not followed in the following cases. Give reasons. 1.X a cloth merchant started a business investing Rs. 50,000. He bought goods for Rs. 40,000 that he sold for Rs. 55,000 to Mr. Y in the month of December 2013. Y pays him Rs. 40,000 immediately and promises to pay the balance after 6 month. For the year ending 31st March, 2014, X’s accountant enters the sales at Rs. 40,000. 2.Mohan purchased goods for Rs. 15,00,000. He sold 4/5th of these for a sum of Rs. 18,00,000 and spent Rs. 2,50,000 during the year. He calculated his Net profit as Rs. 3,50,000. 3.Also calculate the correct profit.State one purpose of Accounting standards.
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