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AS 5
Accountancy
Sir, this is May 18 RTP Question. They have mentioned that the sale of land is an extraordinary item. Is it an extraordinary item or an ordinary item of exceptional nature? In the lecture, Sir mentioned it as an ordinary item of exceptional nature.
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Best Answer
In this sum they have clearly mentioned land has no intention to use in the future.They have to sell for liquidity problems. And Fire at factory is extra ordinary item. So they considered both Extra ordinary items. We have to write assumption regarding in the examination.
AKSHITA SITA PRAVA
Is selling of land ordinary activity with exceptional nature or is selling of land on account of liquidation problems ordinary activity with exceptional nature.I mean does selling it on basis of liquidation problems make it exceptional in nature
Yes. Because of liquidity problems they have to go for sale. Otherwise they won't have such intention. So it is extraordinary item
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