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Code: 14E00104
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MBA I Semester Regular & Supplementary Examinations December/January 2015/2016
FINANCIAL ACCOUNTING FOR MANAGERS
(For students admitted in 2014 & 2015 only)
Time: 3 hours
Max. Marks: 60
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All questions carry equal marks
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SECTION -A
Answer the following: (05 X 10 = 50 Marks)
1 What is accounting? Explain its objectives and principles.
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OR
2 Explain the importance of accounting in managerial decisions.
3 What is trial balance? State the errors which cannot be disclosed by it.
OR
4 From the following trial balance of Warangal granite, prepare the final accounts for the year ended 31st Dec, 2014.
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| Particulars | Rs. | Particulars | Rs. |
|---|---|---|---|
| Purchases | 60,000 | Capital | 60,000 |
| Sales returns | 3,000 | Creditors | 10,000 |
| Buildings | 46,000 | Reserve for bad debts | 2,000 |
| Furniture | 7,000 | Debtors | 30,000 |
| Sales | 80,000 | Cash | 4,200 |
| Commission | 3,000 | Carriage on purchases | 800 |
| Purchase returns | 500 | Trade expenses | 6,000 |
| Bank overdraft | 24,000 | Bank charges | 1,000 |
| Outstanding expenses | 500 | Salaries | 11,000 |
| Telephone expenses | 500 | Outstanding salaries | 500 |
| Drawings | 1,000 | Opening stock | 9,000 |
| Insurance premium | 500 | Bad debts | 500 |
| Total | 1,80,500 | Total | 1,80,500 |
Adjustments:
(a) Closing stock balance as on 31-12- 2014 was Rs.20,000/-.
(b) Depreciate furniture @10%, buildings @20% per annum.
(c) Provide an amount of Rs.2,000/- for bad debts on the remaining balance of debtors provide 5% for bad and doubtful reserves.
(d) Commission received in advance Rs.500/-.
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(e) A provision of discount 10% has to be made on creditors.
5 What is depreciation? Explain any two methods of depreciation.
OR
6 What are the advantages and disadvantages of FIFO and LIFO methods of pricing the material issues?
7 Mention some of the differences between cash flow statements and funds flow statements.
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OR
8 What do you understand by the working capital concept of the term 'funds'? How is 'funds flow' statement drawn under this concept?
Contd. in page 2
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Code: 14E00104
9 How do you analyse and interpret financial statements of a company for reporting on the soundness of its capital structure and solvency?
OR
10 On 31st March, 2015 your bank pass book showed a balance of Rs.12,000/- to your credit. Before that data you issued a cheque of Rs. 1,600/- to your customers but they have not presented them for payment. You had also received a cheque for Rs.320 which although entered by you in the bank column of the cash book was omitted to be paid into bank. On 31st March, a cheque for Rs.500/- received by you was paid into the bank but the same was omitted to be entered into the cash book. There was a credit of Rs.170/- for interest on current account and a debit of Rs.20/- for bank reconciliation. Draw up a reconciliation statement showing adjustment between your cash book and passbook.
SECTION -B
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(Compulsory Question) 01 X 10 = 10 Marks
Case study:
The particulars of incomes and expenses of a company are given here under, for the year ended 31/03/2015.
| Particulars | Rs. | Particulars | Rs. |
|---|---|---|---|
| Opening stock | 76,250 | Sales | 5,00,000 |
| Purchases | 3,15,250 | Closing stock | 98,500 |
| Manufacturing expenses | 7,000 | Income from investment | 6,000 |
| Administration expenses | 1,00,000 | ||
| Selling & distribution expenses | 12,000 | ||
| Loss by fire | 13,000 |
From the following information you are required to calculate:
(a) Operating profit.
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(b) Operating profit ratio.
(c) Stock turnover ratio.
(d) Gross profit ratio.
(e) Net profit ratio.
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