Question 1 (25 Marks Assignment)

a) Materials costing Rs. 12000 bought for the processing and assembly for a profitable special order. Since buying these items, the cost price has fallen to Rs. 10,000. According of IAS-2, what price should this material be valued at the reporting date? Give reasons for your answer

b) What are the basic accounting conventions used while preparing the financial statements? Enlist them and provide at least one example for each of them