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Why reconciliation Statement is prepared? Mention four items which are purely financial charge. |
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Answer» Reconciliation statement is prepared to find out the causes of disagreement between profits shown by cost accounts and financial accounts. Purely financial charge – examples a) Loss on sale of capital assets b) Discount on bonds, debenture etc. c) Loss on investment d) Interest on bank loans and mortgages. e) Fines and penalties f) Provision for bad and doubtful debt g) Amount written off, goodwill, discount on debentures, preliminary expenses h) Loss due to theft, pilferage, etc. |
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