Question No. 1 is compulsory. Attempt any four questions from the remaining five questions. Wherever necessary, suitable assumptions should be made and disclosed by way of note forming part of the answer. Working Notes should form part of the answer.
Sub-questions (3)
State with reasons, whether the following statements are True or False:
Explain the following: What are the objectives of accounting standards? What is the difference between liability and contingent liability?
A trader prepared his final accounts on 31st March, each year. Due to some unavoidable reasons, no inventory taking could be possible till 15th April,2025 on which date total cost of goods in his store came to ₹1,50,000. The following facts were established between 31st March and 15th April, 2025: Sales (Credit) ₹70,000 Sales (Cash) ₹25,000 Purchases (Cash) ₹15,000 Purchases (Credit) ₹25,000 On 25th March, goods of the sale value of ₹30,000 were sent on sale or return basis to a customer, the period of approval being four weeks. He returned 25% of the goods on 12th April, approving the rest; the customer was billed on 25th April. The trader had also received goods costing ₹10,000 in March, for sale on consignment basis. 50% of the goods had been sold by 31st March and another 25% by 15th April. These sales are not included in above sales. Goods are sold by the trader at a profit of 20% on sales. You are required to ascertain the value of inventory as on 31st March, 2025.