Accounting For Managers AU 2020



1. Enumerate the ratios that measure a firm’s overall effectiveness and specify the related formula.
2. “Depreciation is a process of allocation and not of valuation.” Comment.
3. It is said that only cash cost are relevant for capital budgeting decision. However, depreciation which is a non-cash cost is a prominent part of cash flow analysis for such an investment decision. How do you explain this paradox?
4. It is said, “cost accounting is a system of foresight and not post-mortem examination; it turns losses into profit, speeds up activities and eliminates wastes”. Discuss in detail this statement.

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