Which of the following shall not be deducted from net profit while calculating managerial remuneration?
Correct answer: D. Director's remuneration
- A. Loss on sale of undertaking
- B. Debts considered bad and written off
- C. Liability arising from a breach of contract
- D. Director's remuneration
Explanation
Director's remuneration is deducted when arriving at net profit for calculating managerial remuneration. Losses on sale of an undertaking, bad debts written off, and contractual liabilities are also considered under the prescribed calculation, making this the excluded item.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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