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Financial Forensics · Quiz 1 · 27 Oct 2024 · September 2024 term

Question 9: A company sold goods worth \8,000 for \10,000 on Feb 2, 2…

Question 9

+1 markOne or more correct options

A company sold goods worth $8,000 for $10,000 on Feb 2, 2024. 50% of it was paid by the customer immediately via RTGS, and the remaining was promised to be paid by Mar 2, 2024 and eventually paid off in April 2024. Which of the following statements are True based on this information

Select all that apply.

  1. A

    Income statement prepared as for Q1 2024 would reflect the entire $10,000 as income from the sale, although it's not fully realised in Q1.

  2. B

    Income statement prepared as for Q1 2024 would reflect only $5,000 as income from sale, since only $5,000 was received in Q1.

  3. C

    When preparing the balance sheet as of end of Feb 2nd 2024, in the asset side raw materials would have reduced by $8,000 and Bank balance would have increased by $5,000, since only $5,000 was received in cash the remaining is pending

  4. D

    When preparing the balance sheet as of end of Feb 2nd 2024, in the asset side raw materials would have reduced by $8,000 and Bank balance would have increased by $5,000 and a accounts receivables would increase by $5,000

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Correct answers

  • A

    Income statement prepared as for Q1 2024 would reflect the entire $10,000 as income from the sale, although it's not fully realised in Q1.

  • D

    When preparing the balance sheet as of end of Feb 2nd 2024, in the asset side raw materials would have reduced by $8,000 and Bank balance would have increased by $5,000 and a accounts receivables would increase by $5,000

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Question 9 of 23 in the IIT Madras BS Financial Forensics (Financial Forensics) Quiz 1 paper sat on 27 Oct 2024, in the September 2024 term (IIT M DEGREE AN EXAM QDB2 27 Oct 2024). It carries 1 mark.

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