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Statement 1: Aman purchases a piece of land for Rs. 1 lakh in 1985. This impacted an increase in his land account and a decrease in cash account. What is the concept behind this impact? Statement 2: The price of the same piece of land in 2017 is Rs. 1 crore. Aman is excited about the price and plans to record it in his books of account. His accountant, Ravi, calms him down and lets him know that the price of the land is still Rs. 1 lakh and cannot be recorded otherwise. What made Ravi stop Aman from recording it as Rs. 1 crore?

Answer»

Statement 1: Aman purchases a piece of land for Rs. 1 lakh in 1985. This impacted an increase in his land account and a decrease in cash account. What is the concept behind this impact?

Statement 2: The price of the same piece of land in 2017 is Rs. 1 crore. Aman is excited about the price and plans to record it in his books of account. His accountant, Ravi, calms him down and lets him know that the price of the land is still Rs. 1 lakh and cannot be recorded otherwise. What made Ravi stop Aman from recording it as Rs. 1 crore?




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