Mr. Moosa is a famous business man in Ruwi and he doesn’t have any support in his business from his family members. As he has lot of money, he planned to start a plastic recycling company. First he wants to start this business with 5 members of his richest friends. They conducted a meeting and done feasibility study for the intended business. At the end of the meeting, one person who is the owner of plastic recycling machine company conveyed that he wants to contribute 5 machineries to the business instead of cash capital. The other members agreed and converted the five machineries values into monetary value and prepared partnership deed my mentioning the cash capital contribution of all the five partners with other terms and conditions. They started business near to Sohar and got very good profits for the first year. The accountant of the company mentioned all the machineries vales under the heading of fixed assets and cash contribution from partners under the heading of current assets in the assets side of the statement of financial position, and the total of cash and machinery values mentioned under the heading of capital in the liabilities side of statement of financial position. They shared the profit based on the ratio of their capital contribution and as company is having very good profit scope, they expected that the company will continue for infinity period for their future generations. Discuss three accounting concepts involved in the above case by applying the given situation.

2) Imagine that you are part of a company and working in finance department for the last 8 years. So, you have to make situations which are related to the 5 ethical principles where those principles are clearly violated.

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Answer Question 1 Following are three accounting concepts discussed in the light of the given questi... View the full answer