Assume that in July, Tata Motors paid Rs.5 Crores to an external IT consultant for a software project that took 6 months to complete. In July how much would Tata Motors' cash and net income decrease by due to this transaction? 2/3
Cash and Net Income both decrease by Rs. 83.3 Crores - Incorrect
Cash and Net Income both decrease by Rs. 5 Crores
Cash decreases by Rs. 5 Crores; Net Income decreases by Rs. 83.3 Lakhs - Correct
Cash decreases by Rs. 5 Crores, Net Income does not change
since Tata Motor's paid Rs.5 Crores to an external IT company for 6 months therefore as per by accural accounting the expense in the form of cash should decrease by 5000000/6
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