Is there rounding off figures allowed while preparing financial statements of the company and If yes, what is the basis for rounding off?
Answer & explanation
Correct answer: option 3
Rounding off of figures to be reported in the financial statements is based on the size of turnover:
1. Turnover < Rs.100 crore: Nearest hundreds, thousands, lakhs or millions or decimal thereof;
2. Turnover > Rs.100 crore: Nearest lakhs or millions or decimal thereof;