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Materiality is when a business moves away from general accounting principles and makes own estimates because it thinks that the asset is not very significant (material) and so will not make a significant difference in final statements.
we just have to go giv the exam with a positive mind and thts bout it i guess
ask ur question
market based system of trade simply means the use of price mechanism to allocate resources in a free market efficiently using the forces of demand and supply
ur welcome
in sha Allah
Lets say you transferred 100000 worth of goods from manu.acc. And the profit element say 25% mark-up. So the transfer value anyways includes it!! So profit element = (100000/125)*25 = 20000. This has to be credited under other income!
Buh dont forget the entire 100000 will be recorded in the trading acc as cost of production!
And then you sometimes might have to adjust for unrealised profit
The question says that bad debts had already been written off. So you just have to multiply the 5% with 125400. You get 6270. That minus 1800 = 4470
you have to credit it under other income in your PL acc!thnx understoood
but that profit which is 20000, where it goes?? other than in the manufacturing account?
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