PREVIOUS YEAR SOLVED PAPERS MCQ - November 2017
The value of goodwill is Rs.30,000
Book value of goodwill = Rs.12,000
The share of Z will be 30,000 – 12,000
Book value of goodwill = Rs.12,000
The share of Z will be 30,000 – 12,000
Capital and Revenue Receipts: Contributions
to a business enterprise made by a proprietor
in the case of sole trader, partners in case of
partnership firms, shareholders in case of joint
stock company as the capital of the concerns
are capital receipts. Loan from third parties,
sale of any fixed assets of a business, funds
raised by way of debentures are also capital
receipts.
Incomes that arise due to the desired results of intense activities in a business enterprise are revenue receipts, such as sales revenue, commission and discount received, interest and dividend received, interest on investments and the like.
Incomes that arise due to the desired results of intense activities in a business enterprise are revenue receipts, such as sales revenue, commission and discount received, interest and dividend received, interest on investments and the like.
Managerial Economics Fills the Gap between Theory and Practice: There is undeniably a gap between economic theory and the real economic world. But, at the same time, it is also a mistaken view that economic theories can be directly applied to business decision-making. Economic theories do not offer a custom-made or readymade solution to business problems.
Let us now see how business economics bridges the gap between economic theories and business practices. On one side, there is the complex business world and, on the other, there are abstract economic theories, “The big gap between the problems of logic that intrigue economic theorists and the problems of policy that plague practical management needs to be bridged in order to give executive access to the practical contributions that economic thinking can make to top management policies”. Managerial decisionmakers deal with the complex, rather chaotic, business conditions of the real world and they have to find their way to their destination, i.e., achieving the goal that they set for themselves. Business economics applies economic models and analytical tools to eliminate unimportant and inconsequential details and identify the major area of analysis to find a solution to the problem. The economic logic and tools of analysis guide the management in the following managerial functions.
(i) identifying their problems in achieving their goal.
(ii) collecting the relevant data and other relevant information.
(iii) processing and analyzing the collected data.
(iv) drawing the relevant conclusions.
(v) determining and evaluating the alternative means to achieve the goal, and
(vi) taking a decision.
Let us now see how business economics bridges the gap between economic theories and business practices. On one side, there is the complex business world and, on the other, there are abstract economic theories, “The big gap between the problems of logic that intrigue economic theorists and the problems of policy that plague practical management needs to be bridged in order to give executive access to the practical contributions that economic thinking can make to top management policies”. Managerial decisionmakers deal with the complex, rather chaotic, business conditions of the real world and they have to find their way to their destination, i.e., achieving the goal that they set for themselves. Business economics applies economic models and analytical tools to eliminate unimportant and inconsequential details and identify the major area of analysis to find a solution to the problem. The economic logic and tools of analysis guide the management in the following managerial functions.
(i) identifying their problems in achieving their goal.
(ii) collecting the relevant data and other relevant information.
(iii) processing and analyzing the collected data.
(iv) drawing the relevant conclusions.
(v) determining and evaluating the alternative means to achieve the goal, and
(vi) taking a decision.
