Answered: A. XYZ Ltd has a system of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A. XYZ Ltd has a system of depreciating its assets at a higher rate than required. The value of assets are much higher valued than its position as shown in the Balance sheet. What is the purpose achieved by XYZ Ltd in devaluing its Assets? State with reasons.

B. As on 31st March, 2021 the company has receivables account of its exports in terms of US Dollars. The rate of US Dollar on 20th May, 2021 has reduced by 20%, causing a substantial loss to the company. What are the matters to be stated in this regard in the Annual Report for 2020-21 ?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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