Basic Terms of Accounting - Treshan Rao Ganni - Accounts Project

Singhania’s Payment Promise !!

Case: Mr. Raymond Singhania the owner of " Singhania group of Schools ltd. " opens a new school called as Sunitidevi Singhania School. His company purchases a set of 100 tables, 200 chairs and 150 smart board panels for the new school. His firm owes 20lakhs to his supplier due to 'Credit purchase of goods'.

Assertion : His Suppliers receive a promissory Note Receivable from " Singhania group of Schools ltd. " for the credit purchase of goods
Reason: A promissory note receivable is a written promise given by the creditor to ensure payment is made to the debtor.

• Both the assertion and reason are correct, and the reason explains the assertion.

• 1. Both the assertion and reason are correct, but the reason does not explain the assertion.

• 1. The assertion is correct, but the reason is incorrect.

• 1. The assertion is incorrect, but the reason is correct.

The Shark Tank Pitch !!

In a Shark Tank episode, two entrepreneurs present their unique business idea:

Pitch 1: An entrepreneur wants to start a business of buying old scooters and cars, refurbishing them, and selling them for profit. He highlights how vehicles lose value quickly over time, which could impact his profits.
Pitch 2: Another entrepreneur proposes a business that sells classic furniture and vintage items that retain or even increase in value, emphasizing their lasting appeal.

Shark Ashneer Grover and Shark Namita Thapar immediately back OUT of deal 1 and invest in deal 2. What concept made both sharks to choose pitch 2 over pitch 1 ?

• Higher operational costs.

• Poor marketing strategy

• Sharks did not like the 1st pitcher's Personality

• Depreciation of Asset

What is PM Modi's 'Man ki Baat' ?

PM Narendra Modi and Nirmala Sitaraman have a Top Secret Meeting.

The next day Pm Modi addresses the nation in his 'Man ki baat' podcast and announces that the government will be focusing on the Energy Sector, which currently lacks government funds and faces lack of finances. He also requests the people to support renewable energy company's like Green Power Limited.
By What ways can the government and the public financially support such Companies in the energy sector?

• By giving such companies source vouchers

• By increasing Investment in such companies

• By increasing the stock or inventory of such company

• By increasing the liabilities of this company

One day, Mark Zuckerberg was reviewing Facebook’s finances and reflected on how the value of their assets has changed over time. His accountant said that everyone follows the historical cost concept that states assets should be recorded at their original purchase price, regardless of fluctuations in the market. Therefore, the value of Facebook’s assets, which were originally bought for 1 million dollars, is referred to as the __________.

• Market Value

• Book Value

• Fair Value

• Liquidation Value

SRK'S Double Trouble !!

Shah Rukh Khan was super excited to create a sequel to his classic film “Dilwale Dulhania Le Jayenge.” He called it “DDLJ 2,” Since it was his dream project he took investments and loans from many famous producers like Karan Johar worth 500 Crores and invested all his productions money for this one film Unfortunately, the audience hated the climax, the audience threw tomatoes in the theatre for such a Mega Flop Film! Shah Rukh khan became bankrupt and could not pay even a single rupee to Karan Johar.

What will Karan Johar consider ShahRukh khan as?

• Solvent

• Creditor

• Debtor

• Insolvent

The Wolf's Financial Fiasco

In The Wolf of Wall Street, Jordan Belfort runs a booming brokerage firm, but his love for luxury leads to huge debts. Suddenly, the Wall street market crashes beyond imagination! Jordan Belfort is unable to pay back his loans, What term describes the situation where they have loans that they cannot repay and are unlikely to recover?

• Bad debt

• High-interest loans

• Outstanding payments

• Liquid assets

The News report

" In a monumental move, Ratan Tata, the visionary behind Tata Group, has successfully reacquired Air India, marking a significant milestone in the airline's history. After years of challenges and operational struggles, Tata aims to breathe new life into the iconic airline, restoring its reputation and service quality. "

• - Times of India

Mr. Tata buys 100 more airplanes from Boeing company. He purchases on credit worth 100 crore luxury passenger aircrafts. Instead of paying the entire amount , he pays half the money today and draws a bill of exchange for the other.

Which a/c will Mr. Tata debit

• Bills Receivable A/C

• Credit Note A/C

• Bills Payable A/C

• Debit Note A/C

Assertion: When Riya’s startup needed funding for its new app, she issued a promissory note payable to her friend for $10,000.

Reason: A promissory note payable can help a borrower secure immediate cash while specifying the repayment terms, ensuring both parties are clear on their obligations.

• 1. Both assertion and reason are true, and the reason correctly explains the assertion.

• 1. Both assertion and reason are true, but the reason does not explain the assertion.

• 1. The assertion is true, but the reason is false.

• 1. The assertion is false, but the reason is true.

After launching a new line of eco-friendly Nike sneakers, the company’s management excitedly announces, “We sold 10,000 pairs in the first month! But first, we need to calculate how much it cost us to make those shoes before we start planning our next big launch!”

They review the costs of materials, labor, and production involved in creating the sneakers.

What financial term refers to the total cost incurred by the company to produce the sneakers that were sold?

• Operating Expenses

• Cost of Goods Sold

• Revenue

• Gross Profit

In a recent interview, the CEO of a popular startup lenskart Piyush Bansal said, “As we prepare for our annual investor meeting, we must reflects our true financial health. We have to show our assets, liabilities, and equity clearly to assure investors of our stability. our objective is to reveal the financial position of the company”

Which statement can best help CEO Piyush Bansal

• Income Statement

• Statement of Cash Flows

• Balance Sheet

• Profit and Loss Statement