Name the accounting concept violated, if any, in each of the following situations and explain them in detail.

a)  The Rs 1, 00,000 figures for inventory on a Balance Sheet is the amount for which it could be sold on the balance sheet date.

b)  The Balance Sheet of a retail store which has experienced a gross profit of 40% on sales contains an item of merchandise inventory of Rs. 1,15,00,000 Merchandise inventory (at cost) Rs 69,00,000.

c)  Company M does not charge annual depreciation, preferring instead to show the entire difference between original cost and proceeds of sale as a gain or loss in the period when the assets is sold. It has followed this practice for many years.

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the accounting concept which were violated are 1 the cost concept which states t... View the full answer