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Commerce and Accountancy-2014: Answer Writing Challenge – 6


20 September 2014

Answer in 250 words:

1) Discuss contingent liabilities with examples. Where would these items feature in the financial statements of a firm ? What happens when bills are discounted by a firm ? Show journal entries for such transactions. (2012 Mains)

2) Discuss how the following streams of revenues are recognized in an IT service company :

a. Software services
b. Time and material contracts
c. Sale of user’s licenses.