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(An Kattanku lathur - DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
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I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation – 2019
Academic Year 2019 - 2020
Prepared by
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Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J – Asst. Professor (OG) / MBA
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DEPARTMENT OF MANAGEMENT STUDIES
1915103 - ACCOUNTING FOR MANAGEMENT
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QUESTION BANK
| Year and Semester | FIRST YEAR - I SEMESTER (ODD) |
| Subject Code and Name | 1915103 - ACCOUNTING FOR MANAGEMENT |
| Faculty Name | 1) Mrs.UMADEVI.A - Asst. Professor (OG) / MBA |
| 2) Mr.J.ANAND, Asst. Professor (OG) / MBA |
UNIT I FINANCIAL ACCOUNTING
Introduction to Financial, Cost and Management Accounting- Generally accepted accounting principles, Conventions and Concepts- Journal - Ledger - Trial Balance -Preparation of final accounts: Trading, Profit and Loss Account and Balance sheet.
| Q.NO | Unit - I - Part - A – Question | Level | Competence |
| 1 | Define Accounting & Book-Keeping. | BTL 1 | Remember |
| 2 | Compare Financial Accounting and Management Accounting | BTL 2 | Understand |
| 3 | How do you show your understanding about cost concept? | BTL 3 | Apply |
| 4 | Categorize the forms of assets and liabilities. | BTL 4 | Analyze |
| 5 | Discuss Accounting Rules. | BTL 5 | Evaluate |
| 6 | Interpret the usage of Financial Accounting. | BTL 6 | Create |
| 7 | What is meant by Journal? | BTL 1 | Remember |
| 8 | Compare Tangible assets and Intangible Assets. | BTL 2 | Understand |
| 9 | Identify any two major drawbacks of historical accounting. | BTL 3 | Apply |
| 10 | What do you think about GAAP? | BTL 4 | Analyze |
| 11 | How is adjustments applied to solve final accounts? | BTL 5 | Evaluate |
| 12 | How would you evaluate the need for financial accounting? | BTL 6 | Create |
| 13 | Define Accounting cycle. | BTL 1 | Remember |
| 14 | Compare gross profit and net profit. | BTL 2 | Understand |
| 15 | Give some example for usage of management accounting. | BTL 3 | Apply |
| 16 | What do you think about Revenue Realization Concept? | BTL 4 | Analyze |
| 17 | What is Balance Sheet? | BTL 1 | Remember |
| 18 | Classify any four concepts of Accounting. | BTL 2 | Understand |
| 19 | Define Trial Balance. | BTL 1 | Remember |
| 20 | What is meant by Ledger? | BTL 1 | Remember |
| Q.No | Unit - I - Part - B – Question | Level | Competence |
| 1. | How would you prepare trial balances from the following ledger balances: | Details | Rs. | Details | Rs. | | Opening stock | 30000 | Purhcases | 300000 | | Closing stock | 14000 | Debtors | 120000 | | Cash | 3000 | Discount allowed | 3400 | | Bank | 5600 | Creditors | 90000 | | Sales | 420000 | Salaries | 42000 | | Rent | 9000 | Postage | 5600 | | Taxes | 1500 | Machinery | 120000 | | Drawings | 20000 | Capital | 152000 | | Purchases Returns | 6000 | Salaries Returns | 9000 | | BTL 1 | Remember |
| 2 | How would you explain generally accepted accounting principles, Conventions and Concepts? | BTL 2 | Understand |
| 3 | Examine the objectives, functions and advantages and disadvantages of Financial Accounting in detail. | BTL 3 | Apply |
| 4 | Discover from the following are the balances extracted from the books of Deepak as on 31st December 2015. Prepare Final accounts as on the date. | Details | Rs. | Details | Rs. | | Capital | 20000 | Drawings | 5000 | | Cash on hand | 5000 | Cash at Bank | 8000 | | Buildings | 20000 | Machinery | 6000 | | Stock on 1.1.2015 | 3000 | Sundry Debtors | 8000 | | Sundry Creditors | 6000 | Repairs | 400 | | Commission Paid | 700 | Wages | 1700 | | Rent and Rates | 300 | Insurance | 300 | | | Premium | | | Purchases | 60000 | Sales | 96000 | | Purchases Returns | 750 | Sales Returns | 400 | | Furniture and Fixtures | 1600 | Carriage | 200 | | Loan to Ram | 1000 | Telephone Charges | 250 | | Discount Allowed | 50 | Salaries | 600 | | Baddebts | 350 | Discount earned | 100 | | BTL 4 | Analyze |
| 5 | Categorize the objectives, tools and advantages and disadvantages of Management Accounting in detail. | BTL 5 | Evaluate |
| 6 | How would you Journalize the following Transactions: | Date | Details | Rs. | | 01.01.2015 | Bought goods on credit from Raju | 200 | | 02.01.2015 | Goods Returned by Murthy | 25 | | 03.01.2015 | Paid Carriage | 50 | | 04.01.2015 | Received cash from Govind | 500 | | 05.01.2015 | Paid Insurance Charges | 50 | | 06.01.2015 | Sale of type writer | 250 | | BTL 6 | Create |
| 7 | i) Discuss briefly the meaning of a) Tangible assets b) Intangible assets c) Fictitious assets (2+2+2 marks) (6marks) ii) List the branches of accounting and users of accounting information and their requirements. (6 marks) | BTL 1 | Remember |
| 8 | i)Compare profit and loss account and balance sheet using an illustration.(7 marks) ii) Compare between Financial, Cost and Management Accounting. (6 marks) | BTL 2 | Understand |
| 9 | Construct a Accounting plan for activities to be carried out by managers in recent times highlighting the current trends. | BTL 3 | Apply |
| 10 | Analyze the accounting cycle; explain classification and rules of accounts in detail. | BTL 4 | Analyze |
| 11 | How would you describe the objectives, functions and preparation of financial statements? | BTL 1 | Remember |
| 12 | Explain the difference of profit & loss account and balance sheet in detail. | BTL 2 | Understand |
| 13 | Analyze from the following trial balance, prepare trading, profit & loss account for the year ended 31-12-2015 and a Balance sheet as on that date: | Debit | Rs. | Credit | Rs. | | Purchases | 11870 | Capital | 8000 | | Debtors | 7580 | Bad debts recovered | 250 | | Return inwards | 450 | Creditors | 1250 | | Bank deposit | 2750 | Return outwards | 350 | | Rent | 360 | Bank overdraft | 1570 | | Salaries | 850 | Sales | 14690 | | Travelling expenses | 300 | Bills payable | 1350 | | Cash | 210 | | | | Stock | 2450 | | | | Discount allowed | 40 | | | | Drawings | 600 | | | | TOTAL | 27460 | TOTAL | 27460 | | BTL 4 | Analyze |
| 14 | Adjustments: The closing stock on 31-12-2015 was Rs.4200 Write off Rs.80 as bad debts and create a reserve for bad debts at 5% on sundry debtors, 3 months rent is outstanding. i) How would you describe the final Accounts for the year ended on 31st march 1994? The following balances were extracted from the books of Prasad on 31st March 1994. | Details | Rs. | Details | Rs. | | Capital | 50,000 | Creditors | 5,000 | | Drawings | 4,000 | Bad debts | 1100 | | General Expenses | 5,000 | Loan | 15760 | | Buildings | 22,000 | Sales | 130720 | | Machinery | 18,680 | Purchases | 94000 | | Stock | 32,400 | Motor Car | 4000 | | Power | 4,480 | Reserve Fund (Cr.) | 1800 | | Taxes & Insurance | 2630 | Commission (Cr.) | 2640 | | Wages | 14400 | Car Expenses | 3600 | | Debtors | 12560 | Bills Payable | 6700 | | Bank Overdraft | 6600 | Cash | 160 | | Charity | 210 | | | Stock on 31st March 1994 was valued at Rs.47,000. | BTL 1 | Remember |
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Unit - I - Part - C – Questions
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| Q.No | Question |
| 1 | What is Trading, Profit and Loss Account and Balance sheet? Discuss its importance and limitations, Draw specimen of balance sheet. |
| 2 | Illustrate the Journal from the following transactions and post them into ledger. | Date (March 2016) | Details | Rs. | | 1 | Ali commenced with cash | 10000 | | 2 | Paid into Bank | 8000 | | 3 | Bought goods for cash | 500 | | 4 | Bought Furniture for office | 400 | | 5 | Drew from Bank cash for office use | 1000 | | 6 | Goods sold to Khan | 600 | | 7 | Bought goods from Ali | 400 | | 8 | Paid trade expenses | 100 | | 9 | Paid to ali on account | 400 | | 10 | Received cash from Khan | 600 | | 11 | Paid Rent | 200 | | 12 | Cash sales | 12000 | |
| 3 | Solve the problem from the following particulars of Mrs.S prepare a trading and profit and loss account and Balance sheet for the year ending 31st march 2016. | Particulars | Debit (Rs.) | Credit (Rs.) | | Capital | | 750000 | | Cash | 40000 | | | Buildings | 400000 | | | Salary | 110000 | | | Rent & Taxes | 21000 | | | Opening Stock | 120000 | | | Machinery | 120000 | | | Drawings | 40000 | | | Purchases | 500000 | | | Sales | | 750000 | | Carriage inwards | 5000 | | | Fuel, Gas | 37000 | | | Sundry Debtors | 250000 | | | Sundry Creditors | | 120000 | | Bills Receivables | 53000 | | | Dividend Received | | 28000 | | Loan | | 60000 | | Bad debts | 2000 | | | Advertisement | 16000 | | | Reserves | | 6000 | | TOTAL | 1714000 | 1714000 | ADJUSTMENTS: Closing stock Rs.140000 Write off Rs.10,000 depreciation Salaries outstanding is Rs.10000 Rs.1,000 of advertisement relates to the next accounting year Transfer Rs.4000 to reserves. |
| 4 | Analyze from the following trial balance of Ravi, prepare trading and profit and loss account for the year ended December 31st 2015 and a balance sheet as on that date: | Particulars | Debit (Rs.) | Credit (Rs.) | | Capital | | 40,000 | | Sales | | 25,000 | | Purchases | 15000 | | | Salaries | 2000 | | | Rent | 1500 | | | Insurance | 300 | | | Drawings | 5000 | | | Machinery | 28,000 | | | Bank Balance | 4500 | | | Cash | 20 | | | Stock 1-1-2016 | 500 | | | Debtors | | | | Creditors | | 1,000 | | TOTAL | 66,000 | 66,000 | Adjustments Required: Stock on 31-12-2015 Rs 4900 Salaries Unpaid Rs.300 Rent paid in advance Rs.200 Insurance prepaid Rs.90 |
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UNIT II – COMPANY ACCOUNTS
An introduction to Company Final Accounts -Maintenance of Books of Account-Statutory Books- Profit or Loss Prior to incorporation- Alteration of share capital- Preferential allotment, Employees stock option- Buyback of securities.
| Q.No | Unit - II - Part - A – Question | Level | Competence |
| 1 | What is a company? | BTL 1 | Remember |
| 2 | Differentiate Profit and loss account and Profit and loss appropriation account. | BTL 2 | Understand |
| 3 | How would you show your understanding of Buy back of shares? | BTL 3 | Apply |
| 4 | List any two methods of alteration of share capital. | BTL 4 | Analyze |
| 5 | Can you assess the value or importance of Shares? | BTL 5 | Evaluate |
| 6 | Interpret the need for capital reduction. | BTL 6 | Create |
| 7 | Define company accounts. What are its characteristics? | BTL 1 | Remember |
| 8 | How would you explain forfeiture of shares? | BTL 2 | Understand |
| 9 | Give an imaginary profit and loss appropriation account of a limited company. | BTL 3 | Apply |
| 10 | What are the components of final accounts of Joint stock company? | BTL 1 | Remember |
| 11 | What do you meant by Dividend? | BTL 1 | Remember |
| 12 | What is Employee stock option Scheme? | BTL 2 | Understand |
| 13 | What are the methods of valuation of shares of a company? | BTL 3 | Apply |
| 14 | How company final accounts are prepared? | BTL 4 | Analyze |
| 15 | List the factors to be considered for evaluating the goodwill | BTL 5 | Evaluate |
| 16 | Can you list any two preconditions for preferential allotment? | BTL 6 | Create |
| 17 | What are Statutory Books? | BTL 1 | Remember |
| 18 | Compare between the capital reduction scheme and a reorganization scheme for reconstruction. | BTL 2 | Understand |
| 19 | Analyze the rules in provision on buy back of shares. | BTL 3 | Apply |
| 20 | Define Share. | BTL 1 | Remember |
| Q.No | Unit - II - Part - B – Question | Level | Competence |
| 1 | i) Define company and explain its features of a company in detail? (7 marks) ii) How would you explain maintenance of books of account as per company act? (6 marks) | BTL 1 | Remember |
| 2 | A limited company issued 10, 000 equity shares of Rs. 10 each payable as under Rs.2 on application, Rs.5 on allotment, Rs. 3 on final call. The pubic applied for 8000 shares which were allotted. All the money due on shares was received except the final call on 100 shares. These shares were forfeited and re-issued at Rs. 8 per share. Show the Journal Entries in the books of the company. | BTL 2 | Understand |
| 3 | A limited company issued 10000 equity shares of Rs.10 each, payable Re.1 on application, Rs.2 on allotment, Rs.3 on first call, Rs.4 on final call. All shares were subscribed and amounts duly received. How would you show your entries in the books? | BTL 3 | Apply |
| 4 | Mona Earth Mover Ltd. Decided to issue 12,000 shares of Rs.100 each payable at Rs.30 on application, Rs.40 on allotment, Rs.20 on first call and balance on second and final call. Applications are received for 13,000 shares. The directors decided to reject application of 1000 shares and their application money being refunded in full. The allotment money is duly received on all the shares, and all sums due on calls are received except on 100 shares. Analyze the transactions in the books of Mona earth mover ltd. | BTL 4 | Analyze |
| 5 | Discuss the employee's stock option scheme and its advantages and disadvantages ESOP. | BTL 5 | Evaluate |
| 6 | Eastern company Ltd. Issued 40,000 shares of Rs.10 each to the public for the subscription of its share capital, payable at Rs.4 on application, Rs.3 on allotment and the balance on 1st and final call. Applications were received for 40,000 shares. The company made the allotment to the applicants in full. All the amounts due on Allotment and first and final call were duly received. Conclude the journal entries in the books of the company. | BTL 6 | Create |
| 7 | Can you identify the sources and conditions of Buyback of securities? | BTL 1 | Remember |
| 8 | i) What is a preferential allotment? Describe the guidelines as to preferential allotment. (7 marks) ii) How would you summarize Employee Stock Ownership Plan? (6 marks) | BTL 2 | Understand |
| 9 | Explain the terms ‘Over subscription' and 'under-subscription'. How are they dealt with in accounting records? | BTL 3 | Apply |
| 10 | Analyze the factors to be considered for accounting treatment of Profit Prior to incorporation? Explain the different methods of computing Profit or Loss Prior to incorporation? | BTL 4 | Analyze |
| 11 | How would you explain the legal procedure for alteration in share capital in detail. | BTL 1 | Remember |
| 12 | Cronic Limited issued 10,000 equity shares of Rs.10 each payable at Rs.2.50 on application, Rs.3 on allotment, Rs.2 on first call, and the balance of Rs.2.50 on the final call. All the shares were fully subscribed and paid except of a shareholder having 100 shares who could not pay for the final call. Show the journal entries to record these transactions. | BTL 2 | Understand |
| 13 | Rohit and company issued 30,000 shares of Rs.10 each payable Rs.3 on application, Rs.3 on allotment and Rs.2 on first call after two months. All money due on allotment was received, but when the first call was made a shareholder having 400 shares did not pay the first call and a shareholder of 300 shares paid the money for the second and final call of Rs.2 which had not been made as yet. List the necessary journal entries in the books of the company. | BTL 4 | Analyze |
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| 14 | A CO Ltd was incorporated on may 1, 2016 to take over the of X AND CO. as a going concern from January 2016. The profit and loss account for the year ending December 31, 2016 was as follows. Profit and Loss account of A CO ltd for the year ended 31-12.2016 |
