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 urgently in need of the statements as these had to be submitted to the bank, in pursuance of a loan of ` 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 scrutinising the accounts, the banker found that the value of building bought a few years back for ` 7 lakh has been shown in the books at ` 20 lakh, which is its 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 ` 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 provided by Ruchica. Advise Ruchica for the mistakes committed by her in the preparation of financial statements in the context of basic concepts in accounting.
Answers
Answered by
1
Explanation:
turn on the investor team account river School voluntary to complete the work is Parihar kurta with expensive festival it may little now very of two in the group is regular Savings and become eligible for shaving loan from the bank loan is sanctioned in the name of the group and is main to create self employment opportunities for the members
Similar questions