Dinesh commenced business of trading in mobile phones with an initial amount of
? 10,00,000. He purchased a shop of ? 4,00,000 and also purchased furniture worth ?
1,20,000. He sold two mobile phones for ? 90,000 and one mobile phone to Ms. Ruhi on
credit worth ? 80,000. He also purchased 20 mobile phones on credit from Mr. Hobby
worth ? 50,000 each. He paid salaries to the employees and also paid shop rent of ? 10,000
and ? 30,000 respectively.
Another customer who purchased a mobile phone costing ? 60,000 was allowed a discount
of ? 10,000. Dinesh withdrew ? 5,000 for his kid?s birthday. There was a fire because of
which mobile phones worth ? 40,000 were destroyed..........
On the basis of above information, answer the following questions:
1. Who is Dinesh in the above scenario?
2. What would be the term used for the initial amount of ? 10,00,000? How would you
classify this amount in the books of the business?
3. How would you classify shop and furniture in the books of the firm?
4. Why are assets classified into current and non-current assets by him?
5. What would be the term used for Ms. Ruhi and Mr. Hobby in the books of the firm?
6. What kind of expenses are salaries and rent? What would you call the amount taken by
him for his kid?s birthday?