CA (Chartered Accountants) Questions and Answers
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1 :: Explain What is inflation and how is it measured?

Inflation means an overall increase in the prices of goods and services. It is a decrease in the value of a currency. There are three types of measurement, Core Inflation, CPI, and WPI. Core Inflation is a measurement of non-volatile goods such as food and non-precious metals. It leaves out goods like oil because oils price is subject to wild fluctuations. CPI is the most common measurement, using a market basket of goods and measuring their price from a point in the past (a CPI of 100 is arbitrarily the same price level for 1982-1984). Thus, the equation is (Price of most recent market basket/price of same market basket in 1982-1984) X 100. The 100 is to give us the number we normally see. WPI is Wholesale Price Index. It is a measure of wholesalers prices and is generally considered a pre-cursor to what CPI will be (as it takes time for goods to read the consumer).
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2 :: Explain What is Ramsay pricing?

It assigns costs based on the price elasticity of demand. Yet higher the elasticity (elastic), the lower the charge of fixed costs when allocated amongst products.
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3 :: What are the advantages of leaving the allocation of a country resources to the price mechanism?

The main conditions required are:

1. Either a finite number of agents or goods.

2. No externalities - That is, the consumption of one person should not harm or benefit anyone else.

3. No matter how much a person is consuming, they must be able to be made slightly happier by consuming a bit more of something.
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4 :: Explain How is education an investment in human capital?

The idea of humans as capital means that humans have a certain worth to a company (or society). Education increases that worth, making individuals more able to contribute to a company (or to society). Therefore, investing in Education... in your employees, for instance, is worthwhile because then your employees increase their value to you, as an employer. In a general sense, society sinvestment in educational programs increases peoples value to society in general.
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5 :: Explain the golden rules of accounting?

Real Account : Debit what comes in
Credit what goes out

Nominal Account : Debit all expenses and losses
Credit all incomes and gains

Personal Account : Debit the giver
Credit the received

Real Account : Debit what comes in
Credit what goes out

Nominal Account : Debit all expenses and losses
Credit all incomes and gains

Personal Account : Debit the Receiver
Credit the giver
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