Accounting · Banking Regulation and Management Accounting
A bank's audit team is analyzing financial disclosures and operational metrics. A Bill of Exchange for ’5,000,000 drawn on December 20, 2024, for 4 months is evaluated. Concurrently, a break-even analysis for the digital division shows fixed costs of ’15,000,000, variable cost per transaction of ’5, and revenue per transaction of ’20. Considering RBI norms and accounting standards, identify the correct assessment of the bill's maturity date, repossessed assets treatment, and digital division break-even point (BEP).
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The Bill matures on April 22, 2025; Repossessed assets are part of Schedule 11; Digital BEP is 750,000 transactions; Software is governed by AS 2.
- 2The Bill matures on April 23, 2025; Repossessed assets are governed by RBI NPA norms, not AS 2; Digital BEP is 1,000,000 transactions; Software is excluded from AS 2.✓
- 3The Bill matures on April 20, 2025; Repossessed assets are not inventory; Digital BEP is 3,000,000 transactions; Software is covered under AS 2.
- 4The Bill matures on April 23, 2025; Repossessed assets must be valued at NRV; Digital BEP is 1,000,000 transactions; Software is excluded from AS 2.
Correct answer
The Bill matures on April 23, 2025; Repossessed assets are governed by RBI NPA norms, not AS 2; Digital BEP is 1,000,000 transactions; Software is excluded from AS 2.
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