Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

(5 Marks) a. Reliable Limited sells goods on credit basis. At the end of the year, it has a total outstanding of Rs. 120

image text in transcribed

(5 Marks) a. Reliable Limited sells goods on credit basis. At the end of the year, it has a total outstanding of Rs. 120 million from its customers. The past experience shows that about 5% of the customers invariably default. What are your views on this? What is the accounting principle involved and briefly explain the same? (2 marks) a. Shivam Limited borrowed a sum of Rs.50 million from the State Bank of India on 1st August 2019 for a period of one year. The loan matured on 31st July 2020 and was duly repaid on due date with interest amounting to Rs.5 million. The company maintains its books on financial year basis i.e. 1st April to 31st March. In which accounting year the interest expenses should be recorded? Why? (3 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction to Financial Accounting

Authors: Charles Horngren, Gary Sundem, John Elliott, Donna Philbrick

11th edition

978-0133251111, 013325111X, 0133251039, 978-0133251036

More Books

Students also viewed these Accounting questions

Question

If r = (t, t 2 , t 3 ), find r(t) and r(t).

Answered: 1 week ago

Question

What are variable, fixed, and mixed costs?

Answered: 1 week ago

Question

=+d) Which car would you produce and why?

Answered: 1 week ago

Question

Describe ERP and how it can create efficiency within a business

Answered: 1 week ago

Question

Why are stocks usually more risky than bonds?

Answered: 1 week ago