Question 12 of 26
Q.(a) Explain the role of an accountant in the modern business world. [any 5 points]
(OR)
(b) Classify the following expenditures and receipts as capital or revenue :
(i) ₹ 10,000 spent as travelling expenses of the director on trip abroad for the purchase of fixed assets.
(ii) Amount received from trade receivables during the year.
(iii) Amount spent on demolition of building to construct a new building on the same site.
(iv) Insurance claim received on account of a machinery damaged by fire.
(v) Overhauling expenses of ₹ 25,000 for the engine of a motor car to get better fuel efficiency.
Puducherry TnboardTamil Nadu HSC First Year (DGE) Commerce Board 2022Subjective· 5mImportance★★★★★
46% · 12/26 Questions
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Start your 14-day free trial to unlock the full solution →(a) Five roles of an accountant in modern business; (b) classify five items as capital or revenue.
(a) Role of an accountant in the modern business world (any five)
- Record keeper / maintenance of accounts — systematically records all financial transactions and prepares the books of account and final accounts.
- Protector of business assets — keeps records of assets, advises on adequate insurance and safeguards against loss or misuse.
- Financial advisor / decision support — analyses and interprets accounting data to help management plan, budget and take sound financial decisions.
- Tax management — computes taxable income, files returns and ensures compliance with tax and other statutory laws, minimising tax liability legally.
- Public relations / communication — communicates the firm's financial results and position to owners, investors, creditors, employees and government.
(Other acceptable points: internal control and auditing, statutory compliance, management reporting.)
(b) Classification as capital or revenue
| # | Item | Classification | Reason |
|---|---|---|---|
| i | ₹10,000 travelling expenses of director for a trip abroad to purchase fixed assets | Capital expenditure | Incurred to acquire a fixed asset; forms part of the asset's cost |
| ii | Amount received from trade receivables during the year | Revenue receipt | Collection arising from the normal course of trading (from debtors) |
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