Solution-What conclusion would you draw about the sales

What conclusion would you draw about the sales growth

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Question - Orange Inc. is an Indian computer-manufacturing company.

It sold 5000 computers during the current financial year (Year 1). All of the orders were delivered during the current year, although payments for 1500 computers were due to be received on 5th April (Year 2).

In the previous financial year (Year 0), the company had sold 4000 computers and had received the entire payment for all the orders in the same year.

Assume the price of each computer is ?50,000 for both the current and previous financial years

Orange Inc. adopts the financial year from 1st April to 31st March. The accountant of Orange Inc. prepares the financial statements based on both cash and accrual accounting systems on 1st April.

If you are an investor and are planning to invest in Orange Inc., then what conclusion would you draw about the sales growth of the company if you only look at the statements for Year 1 prepared using the cash basis of accounting?

Reference no: EM132732280

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What conclusion would you draw about the sales growth

Reference no: EM132732280

Reference no: EM132732280

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