8 Questions
If the capital employed is Rs. 2,00,000 and the normal rate of return is 12%, what is the normal profit?
$Rs. 24,000$
What factors are needed to calculate normal profit?
Capital employed and normal rate of return
What does accounting measure?
Results of economic activities of an organization
Who are the stakeholders to whom accounting information is conveyed?
Investors, creditors, management, and regulators
Which field of accounting focuses on reporting financial information to external users?
Financial accounting
What does the normal rate of return represent?
Expected rate of return from capital in a business of similar nature and risk
What is the primary focus of management accounting?
Measurement, analysis, and reporting of information for internal use by management
What are practitioners of accounting known as?
Accountants
Test your understanding of normal profit calculation with this quiz. Learn to calculate normal profit using the formula Normal Profit = Capital Employed x Normal Rate of Return. Master the concept by applying it to practical examples.
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