Accounting For Managers
1. Creating Provision against fluctuation in the price of investment is an example of which accounting convention
A Convention of conservatism
B. Convention of full disclosure
C. Convention of materiality
D. Convention of consistency
2. Return of goods by a customer should be debited to
A. Customers account
B. Sales return account
C. Goods account
D. Purchase account
3. Cash discount allowed to a debtor should be credited to
A. Discount account
B. Customer’s account
C. Sales account
D Cash account
4. The concept of separate entity is applicable to which of following types of businesses?
A. Sole proprietorship
B. Corporation
C. Partnership
D. PM of them
5. Accounting principles are generally based upon:
A. Practicability
B. Subjectmty
C. Convenience in recording
D. None of the above
6. Debit the receiver credit the giver rule for
A. Real a/c
B. Personal a/c
C. Nominal a/c
D. None of these
7. Managerial accounting information is generally prepared for
A. Shareholders
B. Creditors
C. Managers
D. Regulatory agencies
8. True & fair profit and loss a/c of a company know by
Sample Solution
Creating Provision against fluctuation in the price of investment is an example of a Convention of conservatism. Conservatism concept is basically “playing safe”. This convention defines that, a company should record all the anticipated losses in the books of account. On the basis of this convention, valuation of inventory is done at cost or net realizable value, whichever is lower, provision for bad and doubtful debts, and fluctuation in the price of investment.
