Question

if the total assets are Rs. 200000,total liabilities are Rs. 40000,amount realised on sale of assets is Rs. 175000 and realisation expenses are Rs.3000,the profit or loss on realisation will be ?
options:
A: profit Rs.12000
B: loss Rs.68000
C: loss Rs .28000
D:loss Rs.25000​

Answer 1

Answer:

Accounting Equation can be defined as:

Owner's Capital + Outside Liabilities = Total Assets

by puttig the available information:

Owner's Capital + Rs.40000 = Rs.100000

Owner's Capital = Rs.100000 - Rs.40000

Owner's Capital = Rs.60000

Explanation:

Limitations of Accounting Data: Accounting data convey an unjustified sense of accuracy and closure. In actuality, accounting statistics "represent a blend of documented facts, accounting principles, and individual judgements."

decisions that have a tangible impact on them. The company's profit, for instance, is not an exact and final number. It is merely the accountant's judgement depending on how accounting principles have been applied. The competence, honesty, and conformity to generally accepted accounting principles and conventions of the decision-makers are necessary conditions for the judgment's soundness. Thus, it is possible that the financial statements and ratios do not accurately reflect the underlying financial situation of the companies.

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