Sales Return is asset or laibility
Answers were Sorted based on User's Feedback
Answer / rajesh
Sales Return is our Asset. because When we received our
Goods we will debit Sales Return So it will be Asset. But
this will not come to Balance Sheet. It will come to Profit
& Loss A/c
Is This Answer Correct ? | 36 Yes | 9 No |
Answer / smitha kunder
sales return is an asset ofcourse. becouse we receive back
goods supplied by us..our stock s raised by the same qty...
Is This Answer Correct ? | 16 Yes | 2 No |
Answer / qamar ali
Sale return is our asset because it is the part of our
assets which was sold.When it comes back our assets increase
an we debit it.
Is This Answer Correct ? | 5 Yes | 0 No |
Answer / rajesh
sales returns is asset to the company though it will not
shown in the balance sheet and it will be shown in p&l a/c
Is This Answer Correct ? | 6 Yes | 5 No |
can a company libale to pay provident fund on employee's overtime ?
DHPL is a small sized firm manufacturing hand tools. It manufacturing plan is situated in Haryana. The company’s sales in the year ending on 31st March 2007 were Rs.1000 million (Rs.100 crore) on an asset base of Rs.650 million. The net profit of the company was Rs.76 million. The management of the company wants to improve profitability further. The required rate of return of the company is 14 percent. The company is currently considering an investment proposal. One is to expand its manufacturing capacity. The estimated cost of the new equipment is Rs.250 million. It is expected to have an economic life of 10 years. The accountant forecasts that net cash inflows would be Rs.45 million per annum for the first three years, Rs.68 million per annum from year four to year eight and for the remaining two years Rs.30million per annum. The plant can be sold for Rs.55 million at the end of its economic life. The company would need to raise debt to the extent of Rs.200 million. The company has the following options of borrowing Rs.200 million: a. The company can borrow funds from a nationalized bank at the interest rate of 14 percent for 10 years. It will be required to pay equal annual installment of interest and repayment of principal. b. A financial institution has offered to lend money to DHPL at 13.5 per annum but it needs to pay equated quarterly installment of interest and repayment of principal. Questions: 1. Should the company expand its capacity? Show the computation of NPV 2. What is the annual installment of bank loan? 3. Calculate the quarterly installments of the Financial Institution loan 4. Should the company borrow from the bank or from the financial institution?
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