State with reasons, whether the following statements are True or False: (i) Cost of inventories should comprise all cost of purchase. (ii) According…

(i) False: Cost of inventories should comprise all cost of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. (ii) False: According to the decision in case of Garner vs Murray, the loss due to insolvency of a partner has to be borne by the solvent partners in the capital ratio and not profit sharing ratio. (iii) False: The amount spent on demolition of an old building which is necessary for the construction of a new factory building on the same site is a capital expenditure. (iv) False: As per Section 39 of the Companies Act,2013, application money must be at least5% of the nominal value of shares and not25% of issue price of shares. (v) False: Additional information means that information which has been identified just before the preparation of the final accounts. As NPO follows the double entry system of book keeping, there shall be two effects for each of the additional information. (vi) True: Cash Transactions are Straightway recorded in the cash book and on the basis of such records, ledgers are prepared. Therefore, cash book is a subsidiary book. Since in cash book balances are directly taken from the Trial balance, it is also treated as principal book. Hence, it is a subsidiary book as well as principal book.