mark okoth
Jul 22
With aid of hypothetical examples explain the following priny: extra over, deduction, grouping description,dottin on??
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ChatGPT
Jul 22
1. Extra over: This term refers to an additional cost or fee that is added on top of the original price. For example, if you are purchasing a car for $20,000 and there is an extra over fee of $500, the total cost would be $20,500.
2. Deduction: Deduction refers to the subtraction of a certain amount from a total. For instance, if you earn $50,000 a year and have a deduction of $5,000 for taxes, your net income would be $45,000.
3. Grouping description: Grouping description involves categorizing items or data into specific groups based on common characteristics. For example, if you are organizing a list of fruits, you may group them into categories such as citrus fruits, berries, and tropical fruits.
4. Doting on: Doting on someone means showing excessive love, affection, or attention towards them. For instance, a parent who constantly showers their child with gifts and praise can be said to be doting on them.
2. Deduction: Deduction refers to the subtraction of a certain amount from a total. For instance, if you earn $50,000 a year and have a deduction of $5,000 for taxes, your net income would be $45,000.
3. Grouping description: Grouping description involves categorizing items or data into specific groups based on common characteristics. For example, if you are organizing a list of fruits, you may group them into categories such as citrus fruits, berries, and tropical fruits.
4. Doting on: Doting on someone means showing excessive love, affection, or attention towards them. For instance, a parent who constantly showers their child with gifts and praise can be said to be doting on them.
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Google Gemini AI
Jul 22
Principle of Extra Over
- Hypothetically, a loan of Rs. 1,00,000 is taken at 12% interest for 5 years.
- The total interest for the loan period would be Rs. 60,000 (1,00,000 x 12% x 5).
- If the loan is repaid in 59 equal monthly installments instead of 60, an extra installment of Rs. 1,000 is paid.
- This extra installment reduces the total interest payable by Rs. 1,000, resulting in a lower overall cost of borrowing.
Principle of Deduction
- A business expense of Rs. 10,000 is incurred.
- The business has an income of Rs. 20,000.
- The net income after deducting the expense is Rs. 10,000 (20,000 - 10,000).
- Deductions reduce the taxable income, resulting in lower tax liability.
Principle of Grouping Description
- A company has different products, such as clothing, electronics, and furniture.
- The company groups these products into categories for financial reporting purposes.
- This grouping provides a better understanding of the company's operations and performance by showing the contribution of each category to the overall business.
Principle of Dottin on
- A company has a large amount of inventory.
- To manage the inventory, the company uses a dotted line to indicate which inventory items are available for sale.
- Any items below the dotted line are not yet ready for sale.
- This principle ensures that only inventory that is ready for sale is counted in the financial statements.
- Hypothetically, a loan of Rs. 1,00,000 is taken at 12% interest for 5 years.
- The total interest for the loan period would be Rs. 60,000 (1,00,000 x 12% x 5).
- If the loan is repaid in 59 equal monthly installments instead of 60, an extra installment of Rs. 1,000 is paid.
- This extra installment reduces the total interest payable by Rs. 1,000, resulting in a lower overall cost of borrowing.
Principle of Deduction
- A business expense of Rs. 10,000 is incurred.
- The business has an income of Rs. 20,000.
- The net income after deducting the expense is Rs. 10,000 (20,000 - 10,000).
- Deductions reduce the taxable income, resulting in lower tax liability.
Principle of Grouping Description
- A company has different products, such as clothing, electronics, and furniture.
- The company groups these products into categories for financial reporting purposes.
- This grouping provides a better understanding of the company's operations and performance by showing the contribution of each category to the overall business.
Principle of Dottin on
- A company has a large amount of inventory.
- To manage the inventory, the company uses a dotted line to indicate which inventory items are available for sale.
- Any items below the dotted line are not yet ready for sale.
- This principle ensures that only inventory that is ready for sale is counted in the financial statements.
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