Explanation

A project should be accepted if its internal rate of return (IRR) exceeds the company's required rate of return.

This indicates that the project is expected to generate returns higher than the company's minimum acceptable return, making it a potentially profitable investment.

Explanation

A decrease in the provision for doubtful debts would increase net profit.

This is because the provision for doubtful debts is a liability, and a decrease in a liability results in an increase in profit.

Explanation

Working capital = Current Assets - Current Liabilities

1. Increase in stock (Rs. 250) → Increases current assets
2. Decrease in bank balance (Rs. 400) → Decreases current assets
3. Increase in creditors (Rs. 1200) → Increases current liabilities

Net impact on working capital:
(250 - 400 - 1200) = -1350

Thus, there is a decrease of Rs. 1,350 in working capital.

Explanation

Explanation

Explanation

Capital includes tools, machinery, and financial resources that enhance production efficiency.

It plays a creative role by enabling innovation, automation, and large-scale production.

Explanation

Small items like pencils and pens are written off within a year according to the materiality concept.

This concept allows minor expenses to be immediately recorded rather than capitalized, as their impact on financial statements is negligible.

Explanation

The liabilities that are payable in more than a year and are not to be liquidated from current assets are fixed liabilities.

These are long-term obligations like bonds or long-term loans that extend beyond the current operating eecycle.

Explanation

The closing process involves separate entries to close:

The correct sequencing of the entries is:

 revenues 

expenses

 income summary

expenses

Explanation

Audit Risk is the combination of the following 3 risks:

1. Control Risk

2. Detection Risk

3. Inherent Risk