Current assets are also known as Gross working capital. Gross working capital is sum of all of a company's current assets (assets that are convertible to cash within a year or less).

Balance Sheet is a statement showing financial status of comapany at any given time. The balance sheet, toger with income statement and cash flow statement, make up cornerstone of any company's financial statements.

The purchase price of a software that will be used for more than 12 months should be regarded as a capital expenditure. It is considered a capital expenditure when asset is newly purchased or when money is used towards extending useful life of an existing asset.

Conservation concept states that "an accountant shouldn't anticipate profit, but must provide for all losses". The concept that an accountant shouldn't anticipate profit, but must provide for all losses is known as The conservatism concept.

Land on lease should be shown in Blance sheet contrary to fact that company does not own that piece of land is implementation of Substance over form concept.

Postage stamps on hand are considered as Prepaid expenses. Prepaids are any expense business pays for in advance, such as rent, insurance, office supplies, postage, travel expense, or advances to employees.

Capital of a business decreases if re is an increase in Drawings. Drawing is always deducted from capital.

Cost of asset = Rs. 6,000 Salvage Value = Rs. 1,000 Total Depreciation Cost = Cost of asset – Salvage Value = 6000 – 1000 = Rs. 5000 Useful life of asset = 5 years Thus, annual depreciation cost = (Cost of asset – Salvage Cost)/Useful Life = 5000/5 = Rs. 1000.

Correction concept is not regarded as fundamental concept that is identified by IAS-1.

Revenue and expense accounts are referred to as Nominal accounts because each period y are closed out to Income Summary in closing process.