Question

Quality management team is not directly in the balance sheet ​

Answer 1

Answer:

(i) The calibre or quality of the management team is not disclosed in the Balance Sheet. <br> (ii) Advance received from a customer is not taken as income or sales. <br> (iii) Assets are recorded in books at the cost incurred for acquisition of such assets. <br> (iv) Revenue must be recognised when its is realised and expenses are recognised when incurred. <br> (v) A business for which financial statement are prepared is separate is separate and distinct from the owner of the entity. <br> (vi) The assumption is made that the entity in question will remain in business for an indefinite period of time. (vii) Capital contributed by the proprietor is credited to his Capital Account. <br> (viii) Financial statements of the firm are prepared every year on 31st March. <br> (ix) Goods sold o credit to Ramesh - Ramesh 's A/c is debited and Sales A/c is credited. <br> (x) Sales has been made in the year ended 31st March ,2018 but the amount has not been realised . Revenue should be recognised as earned in the year ended 31st March,2018. <br> (xi) Sale is recognised on the basis of Cash Memo or Invoice. <br> (xii) Closing Stock is valued at lower of cost or market value. <br> (xiii) Harpreet has entered into agreemant whereby he will earn Rs.10 lakhs for the services to be provided in the next year . The income should be recognised as revenue in the next year after services have been provided. <br> (xiv) Purchase of pen is treated as expense.