InterviewSolution
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Pawan is a cycle shop owner. At the beginning of a month, he bought a TV which has a life of 3 years for Rs. 12000. He sold cycles worth Rs. 8000. So he told his accountant that he has made a loss of Rs. 4000 (Rs. 8000 - Rs. 12000). His accountant corrects him stating that he cannot deduct the total amount of TV from the revenue. But he will just reduce on one year worth of TV value (1/3 * 12000) which is Rs. 4000. Hence he will have a profit of Rs. 4000 (Rs. 8000 - Rs. 4000). Now, Pawan counters his accountant that if his business doesn't last and shuts down in a year, would it be correct to deduct only one year worth of TV value. His accountant responds by asking Pawan to be optimistic that his business would go on for a long time. What are the concepts covered in this passage? |
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Answer» Pawan is a cycle shop owner. At the beginning of a month, he bought a TV which has a life of 3 years for Rs. 12000. He sold cycles worth Rs. 8000. So he told his accountant that he has made a loss of Rs. 4000 (Rs. 8000 - Rs. 12000). His accountant corrects him stating that he cannot deduct the total amount of TV from the revenue. But he will just reduce on one year worth of TV value (1/3 * 12000) which is Rs. 4000. Hence he will have a profit of Rs. 4000 (Rs. 8000 - Rs. 4000). |
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