Question

Ruchica’s father is the sole proprietor of ‘Friends Gifts’, a firm engaged in the sale of gift items. In the

process of preparing financial statements, the accountant of the firm Mr Goyal fell ill and had to proceed

on leave. Ruchica’s father was in urgent need of the statements as these had to be submitted to the bank, in

pursuance of a loan of Rs 5 Lakh applied for the expansion of the business of the firm. Ruchica who is

studying accounting in her school, volunteered to complete the work. On scrutinizing the accounts the

banker found that the value of the building bought a few years back for Rs 7 lakhs has been shown in the

books at Rs 20 lakhs, which is the present market value. Similarly as compared to the last year the method

of valuation of stock was changed, resulting in value of goods to be about 15 per cent higher. Also, the

whole amount of Rs 70,000/- spent on purchase of personal computer (expected life 5 years) during the

year had been charged to the profits of the current year. The banker did not rely on the financial data

provide by Ruchica. Advise Ruchica on the mistakes committed by her in the preparation of financial

statements in the context of the basic concepts in accounting.​

Answer 1

"Mobile Ltd." is a well-known automobile manufacturing company in India. The company plans to increase the sale of its Sedan Cars by 20% in the next quarter. Inorder to achieve this target, the marketing department of the company considered the impact of government policy on the diesel vehicles and they also anticipated thelevel of competitions they might have to face. The team explored the various available options for increase in sale like offering more discounts, providing zero per centfinance, offering free accessories, free service for three years, etc.

Answer 2

Answer:

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