Budgetary control is the establishment of budgets relating to responsibilities of executives to the requirements of a policy and the continuous comparison of actual with budgeted results.
S1: The Business Entity Concept assumes the business and its owners are the same. S2: The Money Measurement Concept ignores qualitative factors. Which statement(s) is/are correct?
Explanation:
S1 is incorrect because the Business Entity Concept treats the business and its owners as separate and distinct. S2 is correct as the Money Measurement Concept only records transactions expressible in monetary terms, ignoring qualitative aspects.
Consider the following statements about the 'Money Measurement Concept': 1. Only transactions that can be expressed in monetary terms are recorded. 2. Non-monetary events like a strike or labour unrest are also recorded if they affect business. 3. The concept assumes that the purchasing power of money remains stable. Which of the above statements are correct?
Explanation:
Statement 1 is correct, 2 is incorrect because non-monetary events are not recorded. 3 is correct as an inherent assumption of the money measurement concept.
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