Download Anna University (AU) MBA ( Master of Business Administration) Important Question Bank 1st Sem 1915103 Accounting for Management (Latest Important Questions Unit Wise)
(An
Kattanku lathur ?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation ? 2019
Academic Year 2019 - 2020
Prepared by
Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J ? Asst. Professor (OG) / MBA
FirstRanker.com - FirstRanker's Choice
(An
Kattanku lathur ?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation ? 2019
Academic Year 2019 - 2020
Prepared by
Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J ? Asst. Professor (OG) / MBA
?
DEPARTMENT OF MANAGEMENT STUDIES
1915103 ? ACCOUNTING FOR MANAGEMENT
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:
BTL 1
Remember
Details Rs. Details Rs.
Opening stock 30000 Purhcases 300000
FirstRanker.com - FirstRanker's Choice
(An
Kattanku lathur ?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation ? 2019
Academic Year 2019 - 2020
Prepared by
Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J ? Asst. Professor (OG) / MBA
?
DEPARTMENT OF MANAGEMENT STUDIES
1915103 ? ACCOUNTING FOR MANAGEMENT
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:
BTL 1
Remember
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
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 31
st
December 2015. Prepare Final
accounts as on the date.
BTL 4
Analyze
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
Premium
300
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
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:
BTL 6
Create
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
FirstRanker.com - FirstRanker's Choice
(An
Kattanku lathur ?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation ? 2019
Academic Year 2019 - 2020
Prepared by
Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J ? Asst. Professor (OG) / MBA
?
DEPARTMENT OF MANAGEMENT STUDIES
1915103 ? ACCOUNTING FOR MANAGEMENT
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:
BTL 1
Remember
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
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 31
st
December 2015. Prepare Final
accounts as on the date.
BTL 4
Analyze
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
Premium
300
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
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:
BTL 6
Create
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
07.01.2015 Sold goods to Hari 150
08.01.2015 Commission received in cash 200
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)
iii) 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:
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.
BTL 4
Analyze
14.
i) How would you describe the final Accounts for the year ended
on 31
st
march 1994? The following balances were extracted from
the books of Prasad on 31
st
March 1994.
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 overdraft1570
Salaries 850 Sales 14690
Travelling expenses 300 Bills payable 1350
Cash 210
Stock 2450
Discount allowed 40
Drawings 600
TOTAL 27460 TOTAL 27460
BTL 1
Details Rs. Details Rs.
FirstRanker.com - FirstRanker's Choice
(An
Kattanku lathur ?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation ? 2019
Academic Year 2019 - 2020
Prepared by
Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J ? Asst. Professor (OG) / MBA
?
DEPARTMENT OF MANAGEMENT STUDIES
1915103 ? ACCOUNTING FOR MANAGEMENT
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:
BTL 1
Remember
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
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 31
st
December 2015. Prepare Final
accounts as on the date.
BTL 4
Analyze
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
Premium
300
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
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:
BTL 6
Create
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
07.01.2015 Sold goods to Hari 150
08.01.2015 Commission received in cash 200
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)
iii) 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:
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.
BTL 4
Analyze
14.
i) How would you describe the final Accounts for the year ended
on 31
st
march 1994? The following balances were extracted from
the books of Prasad on 31
st
March 1994.
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 overdraft1570
Salaries 850 Sales 14690
Travelling expenses 300 Bills payable 1350
Cash 210
Stock 2450
Discount allowed 40
Drawings 600
TOTAL 27460 TOTAL 27460
BTL 1
Details Rs. Details Rs.
Capital 50,000 Creditors 5,000 Remember
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 31
st
March 1994 was valued at Rs.47,000.
Q.No Unit -I -Part -C ?Questions
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 31
st
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
FirstRanker.com - FirstRanker's Choice
(An
Kattanku lathur ?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation ? 2019
Academic Year 2019 - 2020
Prepared by
Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J ? Asst. Professor (OG) / MBA
?
DEPARTMENT OF MANAGEMENT STUDIES
1915103 ? ACCOUNTING FOR MANAGEMENT
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:
BTL 1
Remember
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
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 31
st
December 2015. Prepare Final
accounts as on the date.
BTL 4
Analyze
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
Premium
300
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
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:
BTL 6
Create
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
07.01.2015 Sold goods to Hari 150
08.01.2015 Commission received in cash 200
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)
iii) 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:
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.
BTL 4
Analyze
14.
i) How would you describe the final Accounts for the year ended
on 31
st
march 1994? The following balances were extracted from
the books of Prasad on 31
st
March 1994.
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 overdraft1570
Salaries 850 Sales 14690
Travelling expenses 300 Bills payable 1350
Cash 210
Stock 2450
Discount allowed 40
Drawings 600
TOTAL 27460 TOTAL 27460
BTL 1
Details Rs. Details Rs.
Capital 50,000 Creditors 5,000 Remember
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 31
st
March 1994 was valued at Rs.47,000.
Q.No Unit -I -Part -C ?Questions
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 31
st
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 17140001714000
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 31
st
2015 and a balance sheet as on that date:
Adjustments Required:
Stock on 31-12-2015 Rs.4900
Salaries Unpaid Rs.300
Rent paid in advance Rs.200
Insurance prepaid Rs.90
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 2000
Stock 1-1-2016 5200
Debtors 2500
Creditors 1,000
TOTAL 66,000 66,000
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Kattanku lathur ?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation ? 2019
Academic Year 2019 - 2020
Prepared by
Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J ? Asst. Professor (OG) / MBA
?
DEPARTMENT OF MANAGEMENT STUDIES
1915103 ? ACCOUNTING FOR MANAGEMENT
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:
BTL 1
Remember
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
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 31
st
December 2015. Prepare Final
accounts as on the date.
BTL 4
Analyze
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
Premium
300
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
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:
BTL 6
Create
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
07.01.2015 Sold goods to Hari 150
08.01.2015 Commission received in cash 200
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)
iii) 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:
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.
BTL 4
Analyze
14.
i) How would you describe the final Accounts for the year ended
on 31
st
march 1994? The following balances were extracted from
the books of Prasad on 31
st
March 1994.
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 overdraft1570
Salaries 850 Sales 14690
Travelling expenses 300 Bills payable 1350
Cash 210
Stock 2450
Discount allowed 40
Drawings 600
TOTAL 27460 TOTAL 27460
BTL 1
Details Rs. Details Rs.
Capital 50,000 Creditors 5,000 Remember
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 31
st
March 1994 was valued at Rs.47,000.
Q.No Unit -I -Part -C ?Questions
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 31
st
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 17140001714000
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 31
st
2015 and a balance sheet as on that date:
Adjustments Required:
Stock on 31-12-2015 Rs.4900
Salaries Unpaid Rs.300
Rent paid in advance Rs.200
Insurance prepaid Rs.90
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 2000
Stock 1-1-2016 5200
Debtors 2500
Creditors 1,000
TOTAL 66,000 66,000
UNIT II ? COMPANY ACCOUNTS 12
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 of the company?
BTL 3
Apply
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Kattanku lathur ?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation ? 2019
Academic Year 2019 - 2020
Prepared by
Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J ? Asst. Professor (OG) / MBA
?
DEPARTMENT OF MANAGEMENT STUDIES
1915103 ? ACCOUNTING FOR MANAGEMENT
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:
BTL 1
Remember
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
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 31
st
December 2015. Prepare Final
accounts as on the date.
BTL 4
Analyze
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
Premium
300
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
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:
BTL 6
Create
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
07.01.2015 Sold goods to Hari 150
08.01.2015 Commission received in cash 200
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)
iii) 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:
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.
BTL 4
Analyze
14.
i) How would you describe the final Accounts for the year ended
on 31
st
march 1994? The following balances were extracted from
the books of Prasad on 31
st
March 1994.
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 overdraft1570
Salaries 850 Sales 14690
Travelling expenses 300 Bills payable 1350
Cash 210
Stock 2450
Discount allowed 40
Drawings 600
TOTAL 27460 TOTAL 27460
BTL 1
Details Rs. Details Rs.
Capital 50,000 Creditors 5,000 Remember
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 31
st
March 1994 was valued at Rs.47,000.
Q.No Unit -I -Part -C ?Questions
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 31
st
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 17140001714000
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 31
st
2015 and a balance sheet as on that date:
Adjustments Required:
Stock on 31-12-2015 Rs.4900
Salaries Unpaid Rs.300
Rent paid in advance Rs.200
Insurance prepaid Rs.90
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 2000
Stock 1-1-2016 5200
Debtors 2500
Creditors 1,000
TOTAL 66,000 66,000
UNIT II ? COMPANY ACCOUNTS 12
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 of the company?
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 1
st
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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(An
Kattanku lathur ?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation ? 2019
Academic Year 2019 - 2020
Prepared by
Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J ? Asst. Professor (OG) / MBA
?
DEPARTMENT OF MANAGEMENT STUDIES
1915103 ? ACCOUNTING FOR MANAGEMENT
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:
BTL 1
Remember
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
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 31
st
December 2015. Prepare Final
accounts as on the date.
BTL 4
Analyze
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
Premium
300
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
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:
BTL 6
Create
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
07.01.2015 Sold goods to Hari 150
08.01.2015 Commission received in cash 200
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)
iii) 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:
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.
BTL 4
Analyze
14.
i) How would you describe the final Accounts for the year ended
on 31
st
march 1994? The following balances were extracted from
the books of Prasad on 31
st
March 1994.
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 overdraft1570
Salaries 850 Sales 14690
Travelling expenses 300 Bills payable 1350
Cash 210
Stock 2450
Discount allowed 40
Drawings 600
TOTAL 27460 TOTAL 27460
BTL 1
Details Rs. Details Rs.
Capital 50,000 Creditors 5,000 Remember
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 31
st
March 1994 was valued at Rs.47,000.
Q.No Unit -I -Part -C ?Questions
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 31
st
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 17140001714000
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 31
st
2015 and a balance sheet as on that date:
Adjustments Required:
Stock on 31-12-2015 Rs.4900
Salaries Unpaid Rs.300
Rent paid in advance Rs.200
Insurance prepaid Rs.90
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 2000
Stock 1-1-2016 5200
Debtors 2500
Creditors 1,000
TOTAL 66,000 66,000
UNIT II ? COMPANY ACCOUNTS 12
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 of the company?
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 1
st
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
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
The total turnover for the year ending December 31,2016 was Rs
5,00,000 divided into Rs 1,50,000 for the period upto may 1, 2016
and Rs 3,50,000 for the remaining period. Prepare the profit and
loss account and ascertain the ?Profit prior to? and after
incorporation.
BTL 1
Remember
Dr Cr
Particular Rs Particular Rs
To rent & taxes 12,000 By trading 1,55,000
account
To insurance 3,000
To EB 2,400
To salaries 36,000
To directors fee 3,000
To auditors fee 1,600
To commission 6,000
To advertisement 4,000
To discount 3,500
To office expenses 7,500
To carriage 3,000
To bank charges 1,500
To Preliminary expenses 6,500
To bad debts 2,000
To interest on loan 3,000
To net profit 60,000
1,55,000 1,55,000
Q.No. Unit - II - Part - C ? Question
1. A Ltd. Offered 100,000 equity shares of nominal value of Rs.10 each for public
subscription at Rs.12. The amount payable on the shares were shares were on
application Rs.450; on allotment (including premium)Rs.4.50; on first and final
call Rs.3.00 The actual subscription was only for 90,000 shares. All money
payable by shareholders was received from sudhakar who had taken 1,000
shares but failed to pay the final call. His shares were forfeited and reissued to
Prabhakar at Rs.6 each. Show journal entries in the books of the company in
respect of the above (including cash transactions).
2. Mohan company Ltd., was incorporated on 30
th
June 2005 to take over the
of K.Mohan as from 1
st
January 2015. The financial accounts for the
year ended 31
st
December 2015.
Particulars Rs.Rs.
Sales:
January to June
July to December
Total
120,000
180,000
3,00,000
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DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation ? 2019
Academic Year 2019 - 2020
Prepared by
Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J ? Asst. Professor (OG) / MBA
?
DEPARTMENT OF MANAGEMENT STUDIES
1915103 ? ACCOUNTING FOR MANAGEMENT
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:
BTL 1
Remember
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
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 31
st
December 2015. Prepare Final
accounts as on the date.
BTL 4
Analyze
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
Premium
300
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
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:
BTL 6
Create
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
07.01.2015 Sold goods to Hari 150
08.01.2015 Commission received in cash 200
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)
iii) 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:
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.
BTL 4
Analyze
14.
i) How would you describe the final Accounts for the year ended
on 31
st
march 1994? The following balances were extracted from
the books of Prasad on 31
st
March 1994.
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 overdraft1570
Salaries 850 Sales 14690
Travelling expenses 300 Bills payable 1350
Cash 210
Stock 2450
Discount allowed 40
Drawings 600
TOTAL 27460 TOTAL 27460
BTL 1
Details Rs. Details Rs.
Capital 50,000 Creditors 5,000 Remember
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 31
st
March 1994 was valued at Rs.47,000.
Q.No Unit -I -Part -C ?Questions
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 31
st
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 17140001714000
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 31
st
2015 and a balance sheet as on that date:
Adjustments Required:
Stock on 31-12-2015 Rs.4900
Salaries Unpaid Rs.300
Rent paid in advance Rs.200
Insurance prepaid Rs.90
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 2000
Stock 1-1-2016 5200
Debtors 2500
Creditors 1,000
TOTAL 66,000 66,000
UNIT II ? COMPANY ACCOUNTS 12
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 of the company?
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 1
st
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
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
The total turnover for the year ending December 31,2016 was Rs
5,00,000 divided into Rs 1,50,000 for the period upto may 1, 2016
and Rs 3,50,000 for the remaining period. Prepare the profit and
loss account and ascertain the ?Profit prior to? and after
incorporation.
BTL 1
Remember
Dr Cr
Particular Rs Particular Rs
To rent & taxes 12,000 By trading 1,55,000
account
To insurance 3,000
To EB 2,400
To salaries 36,000
To directors fee 3,000
To auditors fee 1,600
To commission 6,000
To advertisement 4,000
To discount 3,500
To office expenses 7,500
To carriage 3,000
To bank charges 1,500
To Preliminary expenses 6,500
To bad debts 2,000
To interest on loan 3,000
To net profit 60,000
1,55,000 1,55,000
Q.No. Unit - II - Part - C ? Question
1. A Ltd. Offered 100,000 equity shares of nominal value of Rs.10 each for public
subscription at Rs.12. The amount payable on the shares were shares were on
application Rs.450; on allotment (including premium)Rs.4.50; on first and final
call Rs.3.00 The actual subscription was only for 90,000 shares. All money
payable by shareholders was received from sudhakar who had taken 1,000
shares but failed to pay the final call. His shares were forfeited and reissued to
Prabhakar at Rs.6 each. Show journal entries in the books of the company in
respect of the above (including cash transactions).
2. Mohan company Ltd., was incorporated on 30
th
June 2005 to take over the
of K.Mohan as from 1
st
January 2015. The financial accounts for the
year ended 31
st
December 2015.
Particulars Rs.Rs.
Sales:
January to June
July to December
Total
120,000
180,000
3,00,000
Less: Purchases:
January to June
75000
July to December 120,000
195,000
Gross Profit
1,05,000
Less: Salaries 15000
Selling expenses 3000
Depreciation 1500
Directors remuneration 750
Debenture Interest 90
Administration Expenses(Rent, Rates etc.) 4500 24840
Balance
80,160
You are request to prepare a statement apportioning the balance of profit
between the periods prior to after incorporation and show the profit and loss
appropriation account for the year ended 31
st
December 2015.
3. Poornima Ltd., incorporated in April 1, 2008, with a capital of Rs.50,000 in
equity shares of Rs.10 each took over the running of poornima as
from January 1, 2008. The purchase price Rs.20,000 was settled on July 1,
2008, together with interest at 10% per annum by fully paid shares for
Rs.17500 and the balance by cheque.
To company?s Trial Balance as on December 31, 2008, was as below:
Particulars Rs. Rs.
Cash and Bank balances (Cash Rs. 180) 4,860
Share capital
22,500
Land and Buildings 8,000
Fixtures 750
Cycles 1000
Salaries 1200
Purchases 48500
Sales
45000
Debtors and Creditors 4500 3000
Rent from tenants
600
Rent, Rates and taxes 300
Building upkeep 150
Director?s fees 720
Sundry charges 120
Interest to vendor 1000
Total 71,10071,100
Prepare the final accounts for the year ending December 31, 2008, considering
the following additional details:
Stock at end Rs.14,000
Bad debts Rs.200 (including Rs.50 on debtors taken over from vendor) to be
written off.
Sales above include sales up to april, 1, 2008, Rs.7500.
Provide for doubtful debts.Rs.250
Depreciate Buildings 5% and cycles 20%
4. A Ltd. Was registered with an authorized capital of Rs.6,00,000 in equity
shares of Rs.10 each. The following is its trail balance on 31
st
March 2008.
Particulars Debit (Rs.) Credit
(Rs.)
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DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation ? 2019
Academic Year 2019 - 2020
Prepared by
Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J ? Asst. Professor (OG) / MBA
?
DEPARTMENT OF MANAGEMENT STUDIES
1915103 ? ACCOUNTING FOR MANAGEMENT
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:
BTL 1
Remember
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
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 31
st
December 2015. Prepare Final
accounts as on the date.
BTL 4
Analyze
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
Premium
300
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
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:
BTL 6
Create
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
07.01.2015 Sold goods to Hari 150
08.01.2015 Commission received in cash 200
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)
iii) 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:
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.
BTL 4
Analyze
14.
i) How would you describe the final Accounts for the year ended
on 31
st
march 1994? The following balances were extracted from
the books of Prasad on 31
st
March 1994.
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 overdraft1570
Salaries 850 Sales 14690
Travelling expenses 300 Bills payable 1350
Cash 210
Stock 2450
Discount allowed 40
Drawings 600
TOTAL 27460 TOTAL 27460
BTL 1
Details Rs. Details Rs.
Capital 50,000 Creditors 5,000 Remember
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 31
st
March 1994 was valued at Rs.47,000.
Q.No Unit -I -Part -C ?Questions
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 31
st
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 17140001714000
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 31
st
2015 and a balance sheet as on that date:
Adjustments Required:
Stock on 31-12-2015 Rs.4900
Salaries Unpaid Rs.300
Rent paid in advance Rs.200
Insurance prepaid Rs.90
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 2000
Stock 1-1-2016 5200
Debtors 2500
Creditors 1,000
TOTAL 66,000 66,000
UNIT II ? COMPANY ACCOUNTS 12
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 of the company?
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 1
st
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
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
The total turnover for the year ending December 31,2016 was Rs
5,00,000 divided into Rs 1,50,000 for the period upto may 1, 2016
and Rs 3,50,000 for the remaining period. Prepare the profit and
loss account and ascertain the ?Profit prior to? and after
incorporation.
BTL 1
Remember
Dr Cr
Particular Rs Particular Rs
To rent & taxes 12,000 By trading 1,55,000
account
To insurance 3,000
To EB 2,400
To salaries 36,000
To directors fee 3,000
To auditors fee 1,600
To commission 6,000
To advertisement 4,000
To discount 3,500
To office expenses 7,500
To carriage 3,000
To bank charges 1,500
To Preliminary expenses 6,500
To bad debts 2,000
To interest on loan 3,000
To net profit 60,000
1,55,000 1,55,000
Q.No. Unit - II - Part - C ? Question
1. A Ltd. Offered 100,000 equity shares of nominal value of Rs.10 each for public
subscription at Rs.12. The amount payable on the shares were shares were on
application Rs.450; on allotment (including premium)Rs.4.50; on first and final
call Rs.3.00 The actual subscription was only for 90,000 shares. All money
payable by shareholders was received from sudhakar who had taken 1,000
shares but failed to pay the final call. His shares were forfeited and reissued to
Prabhakar at Rs.6 each. Show journal entries in the books of the company in
respect of the above (including cash transactions).
2. Mohan company Ltd., was incorporated on 30
th
June 2005 to take over the
of K.Mohan as from 1
st
January 2015. The financial accounts for the
year ended 31
st
December 2015.
Particulars Rs.Rs.
Sales:
January to June
July to December
Total
120,000
180,000
3,00,000
Less: Purchases:
January to June
75000
July to December 120,000
195,000
Gross Profit
1,05,000
Less: Salaries 15000
Selling expenses 3000
Depreciation 1500
Directors remuneration 750
Debenture Interest 90
Administration Expenses(Rent, Rates etc.) 4500 24840
Balance
80,160
You are request to prepare a statement apportioning the balance of profit
between the periods prior to after incorporation and show the profit and loss
appropriation account for the year ended 31
st
December 2015.
3. Poornima Ltd., incorporated in April 1, 2008, with a capital of Rs.50,000 in
equity shares of Rs.10 each took over the running of poornima as
from January 1, 2008. The purchase price Rs.20,000 was settled on July 1,
2008, together with interest at 10% per annum by fully paid shares for
Rs.17500 and the balance by cheque.
To company?s Trial Balance as on December 31, 2008, was as below:
Particulars Rs. Rs.
Cash and Bank balances (Cash Rs. 180) 4,860
Share capital
22,500
Land and Buildings 8,000
Fixtures 750
Cycles 1000
Salaries 1200
Purchases 48500
Sales
45000
Debtors and Creditors 4500 3000
Rent from tenants
600
Rent, Rates and taxes 300
Building upkeep 150
Director?s fees 720
Sundry charges 120
Interest to vendor 1000
Total 71,10071,100
Prepare the final accounts for the year ending December 31, 2008, considering
the following additional details:
Stock at end Rs.14,000
Bad debts Rs.200 (including Rs.50 on debtors taken over from vendor) to be
written off.
Sales above include sales up to april, 1, 2008, Rs.7500.
Provide for doubtful debts.Rs.250
Depreciate Buildings 5% and cycles 20%
4. A Ltd. Was registered with an authorized capital of Rs.6,00,000 in equity
shares of Rs.10 each. The following is its trail balance on 31
st
March 2008.
Particulars Debit (Rs.) Credit
(Rs.)
Goodwill 25,000
Cash 750
Bank 39,900
Purchases 185000
Preliminary expenses 5000
Share capital
400000
12% Debentures
300000
P & L A/C (Cr.)
26250
Calls in arrears 7500
Premises 300000
Plant and machineries 330000
Interim Dividend 39250
Sales
415000
Stock (1.4.2007) 75000
Furniture & Fixtures 7200
Sundry Debtors 87000
Wages 84865
General Expenses 6835
Freight and carriage 13115
Salaries 14500
Directors Fees 5725
Bad debts 2110
Debentures interest paid 18000
Bills payable
37000
Sundry creditors
40000
General reserve
25000
Provision for bad debts
3500
Total 12467501246750
Prepare Profit and Loss account, Profit and Loss appropriation A/C and
balancesheet in proper form after making the following adjustments:
Depreciate Plant and machinery by 15%
Write off Rs.500 from preliminary expenses
Provide for 6 months interest on debentures
Leave bad and doubtful debts provision at 5% on sundry debtors
Provide for income tax at 50%
Stock on 31-3-2008 was Rs.95,000
FirstRanker.com - FirstRanker's Choice
(An
Kattanku lathur ?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation ? 2019
Academic Year 2019 - 2020
Prepared by
Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J ? Asst. Professor (OG) / MBA
?
DEPARTMENT OF MANAGEMENT STUDIES
1915103 ? ACCOUNTING FOR MANAGEMENT
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:
BTL 1
Remember
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
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 31
st
December 2015. Prepare Final
accounts as on the date.
BTL 4
Analyze
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
Premium
300
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
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:
BTL 6
Create
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
07.01.2015 Sold goods to Hari 150
08.01.2015 Commission received in cash 200
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)
iii) 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:
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.
BTL 4
Analyze
14.
i) How would you describe the final Accounts for the year ended
on 31
st
march 1994? The following balances were extracted from
the books of Prasad on 31
st
March 1994.
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 overdraft1570
Salaries 850 Sales 14690
Travelling expenses 300 Bills payable 1350
Cash 210
Stock 2450
Discount allowed 40
Drawings 600
TOTAL 27460 TOTAL 27460
BTL 1
Details Rs. Details Rs.
Capital 50,000 Creditors 5,000 Remember
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 31
st
March 1994 was valued at Rs.47,000.
Q.No Unit -I -Part -C ?Questions
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 31
st
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 17140001714000
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 31
st
2015 and a balance sheet as on that date:
Adjustments Required:
Stock on 31-12-2015 Rs.4900
Salaries Unpaid Rs.300
Rent paid in advance Rs.200
Insurance prepaid Rs.90
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 2000
Stock 1-1-2016 5200
Debtors 2500
Creditors 1,000
TOTAL 66,000 66,000
UNIT II ? COMPANY ACCOUNTS 12
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 of the company?
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 1
st
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
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
The total turnover for the year ending December 31,2016 was Rs
5,00,000 divided into Rs 1,50,000 for the period upto may 1, 2016
and Rs 3,50,000 for the remaining period. Prepare the profit and
loss account and ascertain the ?Profit prior to? and after
incorporation.
BTL 1
Remember
Dr Cr
Particular Rs Particular Rs
To rent & taxes 12,000 By trading 1,55,000
account
To insurance 3,000
To EB 2,400
To salaries 36,000
To directors fee 3,000
To auditors fee 1,600
To commission 6,000
To advertisement 4,000
To discount 3,500
To office expenses 7,500
To carriage 3,000
To bank charges 1,500
To Preliminary expenses 6,500
To bad debts 2,000
To interest on loan 3,000
To net profit 60,000
1,55,000 1,55,000
Q.No. Unit - II - Part - C ? Question
1. A Ltd. Offered 100,000 equity shares of nominal value of Rs.10 each for public
subscription at Rs.12. The amount payable on the shares were shares were on
application Rs.450; on allotment (including premium)Rs.4.50; on first and final
call Rs.3.00 The actual subscription was only for 90,000 shares. All money
payable by shareholders was received from sudhakar who had taken 1,000
shares but failed to pay the final call. His shares were forfeited and reissued to
Prabhakar at Rs.6 each. Show journal entries in the books of the company in
respect of the above (including cash transactions).
2. Mohan company Ltd., was incorporated on 30
th
June 2005 to take over the
of K.Mohan as from 1
st
January 2015. The financial accounts for the
year ended 31
st
December 2015.
Particulars Rs.Rs.
Sales:
January to June
July to December
Total
120,000
180,000
3,00,000
Less: Purchases:
January to June
75000
July to December 120,000
195,000
Gross Profit
1,05,000
Less: Salaries 15000
Selling expenses 3000
Depreciation 1500
Directors remuneration 750
Debenture Interest 90
Administration Expenses(Rent, Rates etc.) 4500 24840
Balance
80,160
You are request to prepare a statement apportioning the balance of profit
between the periods prior to after incorporation and show the profit and loss
appropriation account for the year ended 31
st
December 2015.
3. Poornima Ltd., incorporated in April 1, 2008, with a capital of Rs.50,000 in
equity shares of Rs.10 each took over the running of poornima as
from January 1, 2008. The purchase price Rs.20,000 was settled on July 1,
2008, together with interest at 10% per annum by fully paid shares for
Rs.17500 and the balance by cheque.
To company?s Trial Balance as on December 31, 2008, was as below:
Particulars Rs. Rs.
Cash and Bank balances (Cash Rs. 180) 4,860
Share capital
22,500
Land and Buildings 8,000
Fixtures 750
Cycles 1000
Salaries 1200
Purchases 48500
Sales
45000
Debtors and Creditors 4500 3000
Rent from tenants
600
Rent, Rates and taxes 300
Building upkeep 150
Director?s fees 720
Sundry charges 120
Interest to vendor 1000
Total 71,10071,100
Prepare the final accounts for the year ending December 31, 2008, considering
the following additional details:
Stock at end Rs.14,000
Bad debts Rs.200 (including Rs.50 on debtors taken over from vendor) to be
written off.
Sales above include sales up to april, 1, 2008, Rs.7500.
Provide for doubtful debts.Rs.250
Depreciate Buildings 5% and cycles 20%
4. A Ltd. Was registered with an authorized capital of Rs.6,00,000 in equity
shares of Rs.10 each. The following is its trail balance on 31
st
March 2008.
Particulars Debit (Rs.) Credit
(Rs.)
Goodwill 25,000
Cash 750
Bank 39,900
Purchases 185000
Preliminary expenses 5000
Share capital
400000
12% Debentures
300000
P & L A/C (Cr.)
26250
Calls in arrears 7500
Premises 300000
Plant and machineries 330000
Interim Dividend 39250
Sales
415000
Stock (1.4.2007) 75000
Furniture & Fixtures 7200
Sundry Debtors 87000
Wages 84865
General Expenses 6835
Freight and carriage 13115
Salaries 14500
Directors Fees 5725
Bad debts 2110
Debentures interest paid 18000
Bills payable
37000
Sundry creditors
40000
General reserve
25000
Provision for bad debts
3500
Total 12467501246750
Prepare Profit and Loss account, Profit and Loss appropriation A/C and
balancesheet in proper form after making the following adjustments:
Depreciate Plant and machinery by 15%
Write off Rs.500 from preliminary expenses
Provide for 6 months interest on debentures
Leave bad and doubtful debts provision at 5% on sundry debtors
Provide for income tax at 50%
Stock on 31-3-2008 was Rs.95,000
UNIT III - ANALYSIS OF FINANCIAL STATEMENTS 12
Analysis of financial statements: Comparative Statements-Common size statements-Trend analysis ?
Financial ratio analysis, Uses and limitations of Ratio analysis-cash flow (as per Accounting Standard
3) and funds flow statement analysis.
Q.No Unit - III - Part - A ? Question Level Competence
1 What are financial statements? BTL 1
Remember
2 List out various sources and applications of cash. BTL 2
Understand
3 How would you show your understanding of debt equity ratio? BTL 3
Apply
4 List any two objectives of financial statements? BTL 4
Analyze
5 Can you assess the value or importance of funds flow statement? BTL 5
Evaluate
6 Differentiate between cash flow and funds flow statements. BTL 6
Create
7 What does cash flow analysis mean? BTL 1
Remember
8 How would you explain funds flow statement? BTL 2
Understand
9 How the various activities are classified (as per AS-3 revised) while
preparing cash flow statement?
BTL 3
Apply
10 What is meant by Trend analysis? BTL 4
Analyze
11 Can you identify the uses of cash flow statement? BTL 5
Evaluate
12 What is the difference between current ratio and liquid ratio BTL 6
Create
13 Can you recall the scope & significance of Ratio analysis? BTL 1
Remember
14 Outline the scope of Common size statements. BTL 2
Understand
15 How would you show your understanding of Cash inflow and cash
outflow?
BTL 3
Apply
16
Calculate Debtors Turnover Ratio from the following:
Total Sales 2,00,000
Cash Sales 40,000
Opening debtors 35,000
Closing Debtors 45,000
BTL 4
Analyze
17 Define Current ratio. BTL 1
Remember
18 What is the meaning of ?Funds from operations?? BTL 2
Understand
19 What are the benefits of schedule of changes in working capital? BTL 1
Remember
20 Can you list the types of working capital. BTL 1
Remember
Q.No Unit - III - Part - B ? Question Level
Competence
1
i) What are the essential attributes of financial statements ? importance and
limitations of it? (7 marks)
ii) Current Ratio is 3:5. Working capital is Rs.9,00,000. How would you show
current assets and current liabilities. (6 marks)
BTL 1
Remember
2
i) Explain the various tools and techniques of financial statements. (7 marks)
ii) Shine Limited has a current ratio 4.5:1 and quick ratio 3:1; if the stock is
36,000. Show current liabilities and current assets. (6 marks)
BTL 2
Understand
3 Define Ratio Analysis; List the advantages and Disadvantages of it. BTL 3
Apply
4 Discuss briefly the various methods of classification or types of Ratios. BTL 4
Analyze
FirstRanker.com - FirstRanker's Choice
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Kattanku lathur ?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation ? 2019
Academic Year 2019 - 2020
Prepared by
Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J ? Asst. Professor (OG) / MBA
?
DEPARTMENT OF MANAGEMENT STUDIES
1915103 ? ACCOUNTING FOR MANAGEMENT
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:
BTL 1
Remember
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
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 31
st
December 2015. Prepare Final
accounts as on the date.
BTL 4
Analyze
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
Premium
300
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
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:
BTL 6
Create
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
07.01.2015 Sold goods to Hari 150
08.01.2015 Commission received in cash 200
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)
iii) 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:
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.
BTL 4
Analyze
14.
i) How would you describe the final Accounts for the year ended
on 31
st
march 1994? The following balances were extracted from
the books of Prasad on 31
st
March 1994.
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 overdraft1570
Salaries 850 Sales 14690
Travelling expenses 300 Bills payable 1350
Cash 210
Stock 2450
Discount allowed 40
Drawings 600
TOTAL 27460 TOTAL 27460
BTL 1
Details Rs. Details Rs.
Capital 50,000 Creditors 5,000 Remember
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 31
st
March 1994 was valued at Rs.47,000.
Q.No Unit -I -Part -C ?Questions
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 31
st
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 17140001714000
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 31
st
2015 and a balance sheet as on that date:
Adjustments Required:
Stock on 31-12-2015 Rs.4900
Salaries Unpaid Rs.300
Rent paid in advance Rs.200
Insurance prepaid Rs.90
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 2000
Stock 1-1-2016 5200
Debtors 2500
Creditors 1,000
TOTAL 66,000 66,000
UNIT II ? COMPANY ACCOUNTS 12
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 of the company?
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 1
st
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
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
The total turnover for the year ending December 31,2016 was Rs
5,00,000 divided into Rs 1,50,000 for the period upto may 1, 2016
and Rs 3,50,000 for the remaining period. Prepare the profit and
loss account and ascertain the ?Profit prior to? and after
incorporation.
BTL 1
Remember
Dr Cr
Particular Rs Particular Rs
To rent & taxes 12,000 By trading 1,55,000
account
To insurance 3,000
To EB 2,400
To salaries 36,000
To directors fee 3,000
To auditors fee 1,600
To commission 6,000
To advertisement 4,000
To discount 3,500
To office expenses 7,500
To carriage 3,000
To bank charges 1,500
To Preliminary expenses 6,500
To bad debts 2,000
To interest on loan 3,000
To net profit 60,000
1,55,000 1,55,000
Q.No. Unit - II - Part - C ? Question
1. A Ltd. Offered 100,000 equity shares of nominal value of Rs.10 each for public
subscription at Rs.12. The amount payable on the shares were shares were on
application Rs.450; on allotment (including premium)Rs.4.50; on first and final
call Rs.3.00 The actual subscription was only for 90,000 shares. All money
payable by shareholders was received from sudhakar who had taken 1,000
shares but failed to pay the final call. His shares were forfeited and reissued to
Prabhakar at Rs.6 each. Show journal entries in the books of the company in
respect of the above (including cash transactions).
2. Mohan company Ltd., was incorporated on 30
th
June 2005 to take over the
of K.Mohan as from 1
st
January 2015. The financial accounts for the
year ended 31
st
December 2015.
Particulars Rs.Rs.
Sales:
January to June
July to December
Total
120,000
180,000
3,00,000
Less: Purchases:
January to June
75000
July to December 120,000
195,000
Gross Profit
1,05,000
Less: Salaries 15000
Selling expenses 3000
Depreciation 1500
Directors remuneration 750
Debenture Interest 90
Administration Expenses(Rent, Rates etc.) 4500 24840
Balance
80,160
You are request to prepare a statement apportioning the balance of profit
between the periods prior to after incorporation and show the profit and loss
appropriation account for the year ended 31
st
December 2015.
3. Poornima Ltd., incorporated in April 1, 2008, with a capital of Rs.50,000 in
equity shares of Rs.10 each took over the running of poornima as
from January 1, 2008. The purchase price Rs.20,000 was settled on July 1,
2008, together with interest at 10% per annum by fully paid shares for
Rs.17500 and the balance by cheque.
To company?s Trial Balance as on December 31, 2008, was as below:
Particulars Rs. Rs.
Cash and Bank balances (Cash Rs. 180) 4,860
Share capital
22,500
Land and Buildings 8,000
Fixtures 750
Cycles 1000
Salaries 1200
Purchases 48500
Sales
45000
Debtors and Creditors 4500 3000
Rent from tenants
600
Rent, Rates and taxes 300
Building upkeep 150
Director?s fees 720
Sundry charges 120
Interest to vendor 1000
Total 71,10071,100
Prepare the final accounts for the year ending December 31, 2008, considering
the following additional details:
Stock at end Rs.14,000
Bad debts Rs.200 (including Rs.50 on debtors taken over from vendor) to be
written off.
Sales above include sales up to april, 1, 2008, Rs.7500.
Provide for doubtful debts.Rs.250
Depreciate Buildings 5% and cycles 20%
4. A Ltd. Was registered with an authorized capital of Rs.6,00,000 in equity
shares of Rs.10 each. The following is its trail balance on 31
st
March 2008.
Particulars Debit (Rs.) Credit
(Rs.)
Goodwill 25,000
Cash 750
Bank 39,900
Purchases 185000
Preliminary expenses 5000
Share capital
400000
12% Debentures
300000
P & L A/C (Cr.)
26250
Calls in arrears 7500
Premises 300000
Plant and machineries 330000
Interim Dividend 39250
Sales
415000
Stock (1.4.2007) 75000
Furniture & Fixtures 7200
Sundry Debtors 87000
Wages 84865
General Expenses 6835
Freight and carriage 13115
Salaries 14500
Directors Fees 5725
Bad debts 2110
Debentures interest paid 18000
Bills payable
37000
Sundry creditors
40000
General reserve
25000
Provision for bad debts
3500
Total 12467501246750
Prepare Profit and Loss account, Profit and Loss appropriation A/C and
balancesheet in proper form after making the following adjustments:
Depreciate Plant and machinery by 15%
Write off Rs.500 from preliminary expenses
Provide for 6 months interest on debentures
Leave bad and doubtful debts provision at 5% on sundry debtors
Provide for income tax at 50%
Stock on 31-3-2008 was Rs.95,000
UNIT III - ANALYSIS OF FINANCIAL STATEMENTS 12
Analysis of financial statements: Comparative Statements-Common size statements-Trend analysis ?
Financial ratio analysis, Uses and limitations of Ratio analysis-cash flow (as per Accounting Standard
3) and funds flow statement analysis.
Q.No Unit - III - Part - A ? Question Level Competence
1 What are financial statements? BTL 1
Remember
2 List out various sources and applications of cash. BTL 2
Understand
3 How would you show your understanding of debt equity ratio? BTL 3
Apply
4 List any two objectives of financial statements? BTL 4
Analyze
5 Can you assess the value or importance of funds flow statement? BTL 5
Evaluate
6 Differentiate between cash flow and funds flow statements. BTL 6
Create
7 What does cash flow analysis mean? BTL 1
Remember
8 How would you explain funds flow statement? BTL 2
Understand
9 How the various activities are classified (as per AS-3 revised) while
preparing cash flow statement?
BTL 3
Apply
10 What is meant by Trend analysis? BTL 4
Analyze
11 Can you identify the uses of cash flow statement? BTL 5
Evaluate
12 What is the difference between current ratio and liquid ratio BTL 6
Create
13 Can you recall the scope & significance of Ratio analysis? BTL 1
Remember
14 Outline the scope of Common size statements. BTL 2
Understand
15 How would you show your understanding of Cash inflow and cash
outflow?
BTL 3
Apply
16
Calculate Debtors Turnover Ratio from the following:
Total Sales 2,00,000
Cash Sales 40,000
Opening debtors 35,000
Closing Debtors 45,000
BTL 4
Analyze
17 Define Current ratio. BTL 1
Remember
18 What is the meaning of ?Funds from operations?? BTL 2
Understand
19 What are the benefits of schedule of changes in working capital? BTL 1
Remember
20 Can you list the types of working capital. BTL 1
Remember
Q.No Unit - III - Part - B ? Question Level
Competence
1
i) What are the essential attributes of financial statements ? importance and
limitations of it? (7 marks)
ii) Current Ratio is 3:5. Working capital is Rs.9,00,000. How would you show
current assets and current liabilities. (6 marks)
BTL 1
Remember
2
i) Explain the various tools and techniques of financial statements. (7 marks)
ii) Shine Limited has a current ratio 4.5:1 and quick ratio 3:1; if the stock is
36,000. Show current liabilities and current assets. (6 marks)
BTL 2
Understand
3 Define Ratio Analysis; List the advantages and Disadvantages of it. BTL 3
Apply
4 Discuss briefly the various methods of classification or types of Ratios. BTL 4
Analyze
Show the balance sheet of the concern from the following details: Evaluate
BTL 5 5
The gross profit was Rs.60,000 closing stock was Rs.5000 in excess of the opening
stock.
Stock velocity 6
Capital turnover ratio 2
Fixed assets turnover ratio 4
Gross profit ratio 20%
Debt collection period 2 months
Creditors payment period 73 days
6 Evaluate the specimen of Comparative Statements-Common size
statements.
BTL 6
Create
7 i) Prepare common size statement from the following.
Particular 2017 2018
Sales 30,00,000 35,00,000
Cost of production 15,50,000 17,00,000
Administrative expense 5,00,000 6,50,000
Selling expense 2,00,000 2,30,000
Interest 3,50,000 3,70,000
Divided received
(income)
2,50,000 2,00,000
iii)Prepare a comparative statement from the following.
Particuluar 2017 2018
Sales 25,00,000 30,00,000
Cost of goods sold 14,00,000 15,50,000
Operation expense :
Administrative expenses
Selling expenses
3,50,000
2,70,000
2,90,000
3,60,000
Non operation expenses:
Interest
Income tax
1,60,000
1,70,000
1,40,000
3,30,000
BTL 1
Remember
8 Explain the terms funds, funds flow and funds flow statement, List the advantages
and Disadvantages of it.
BTL 2
Understand
Identify the preparation of schedule of changes in working capital and Adjusted
Profit and Loss Account.
Explain terms operating activities, inventory activities, financing activities.
BTL 3
Apply
9
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DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation ? 2019
Academic Year 2019 - 2020
Prepared by
Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J ? Asst. Professor (OG) / MBA
?
DEPARTMENT OF MANAGEMENT STUDIES
1915103 ? ACCOUNTING FOR MANAGEMENT
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:
BTL 1
Remember
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
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 31
st
December 2015. Prepare Final
accounts as on the date.
BTL 4
Analyze
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
Premium
300
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
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:
BTL 6
Create
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
07.01.2015 Sold goods to Hari 150
08.01.2015 Commission received in cash 200
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)
iii) 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:
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.
BTL 4
Analyze
14.
i) How would you describe the final Accounts for the year ended
on 31
st
march 1994? The following balances were extracted from
the books of Prasad on 31
st
March 1994.
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 overdraft1570
Salaries 850 Sales 14690
Travelling expenses 300 Bills payable 1350
Cash 210
Stock 2450
Discount allowed 40
Drawings 600
TOTAL 27460 TOTAL 27460
BTL 1
Details Rs. Details Rs.
Capital 50,000 Creditors 5,000 Remember
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 31
st
March 1994 was valued at Rs.47,000.
Q.No Unit -I -Part -C ?Questions
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 31
st
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 17140001714000
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 31
st
2015 and a balance sheet as on that date:
Adjustments Required:
Stock on 31-12-2015 Rs.4900
Salaries Unpaid Rs.300
Rent paid in advance Rs.200
Insurance prepaid Rs.90
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 2000
Stock 1-1-2016 5200
Debtors 2500
Creditors 1,000
TOTAL 66,000 66,000
UNIT II ? COMPANY ACCOUNTS 12
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 of the company?
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 1
st
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
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
The total turnover for the year ending December 31,2016 was Rs
5,00,000 divided into Rs 1,50,000 for the period upto may 1, 2016
and Rs 3,50,000 for the remaining period. Prepare the profit and
loss account and ascertain the ?Profit prior to? and after
incorporation.
BTL 1
Remember
Dr Cr
Particular Rs Particular Rs
To rent & taxes 12,000 By trading 1,55,000
account
To insurance 3,000
To EB 2,400
To salaries 36,000
To directors fee 3,000
To auditors fee 1,600
To commission 6,000
To advertisement 4,000
To discount 3,500
To office expenses 7,500
To carriage 3,000
To bank charges 1,500
To Preliminary expenses 6,500
To bad debts 2,000
To interest on loan 3,000
To net profit 60,000
1,55,000 1,55,000
Q.No. Unit - II - Part - C ? Question
1. A Ltd. Offered 100,000 equity shares of nominal value of Rs.10 each for public
subscription at Rs.12. The amount payable on the shares were shares were on
application Rs.450; on allotment (including premium)Rs.4.50; on first and final
call Rs.3.00 The actual subscription was only for 90,000 shares. All money
payable by shareholders was received from sudhakar who had taken 1,000
shares but failed to pay the final call. His shares were forfeited and reissued to
Prabhakar at Rs.6 each. Show journal entries in the books of the company in
respect of the above (including cash transactions).
2. Mohan company Ltd., was incorporated on 30
th
June 2005 to take over the
of K.Mohan as from 1
st
January 2015. The financial accounts for the
year ended 31
st
December 2015.
Particulars Rs.Rs.
Sales:
January to June
July to December
Total
120,000
180,000
3,00,000
Less: Purchases:
January to June
75000
July to December 120,000
195,000
Gross Profit
1,05,000
Less: Salaries 15000
Selling expenses 3000
Depreciation 1500
Directors remuneration 750
Debenture Interest 90
Administration Expenses(Rent, Rates etc.) 4500 24840
Balance
80,160
You are request to prepare a statement apportioning the balance of profit
between the periods prior to after incorporation and show the profit and loss
appropriation account for the year ended 31
st
December 2015.
3. Poornima Ltd., incorporated in April 1, 2008, with a capital of Rs.50,000 in
equity shares of Rs.10 each took over the running of poornima as
from January 1, 2008. The purchase price Rs.20,000 was settled on July 1,
2008, together with interest at 10% per annum by fully paid shares for
Rs.17500 and the balance by cheque.
To company?s Trial Balance as on December 31, 2008, was as below:
Particulars Rs. Rs.
Cash and Bank balances (Cash Rs. 180) 4,860
Share capital
22,500
Land and Buildings 8,000
Fixtures 750
Cycles 1000
Salaries 1200
Purchases 48500
Sales
45000
Debtors and Creditors 4500 3000
Rent from tenants
600
Rent, Rates and taxes 300
Building upkeep 150
Director?s fees 720
Sundry charges 120
Interest to vendor 1000
Total 71,10071,100
Prepare the final accounts for the year ending December 31, 2008, considering
the following additional details:
Stock at end Rs.14,000
Bad debts Rs.200 (including Rs.50 on debtors taken over from vendor) to be
written off.
Sales above include sales up to april, 1, 2008, Rs.7500.
Provide for doubtful debts.Rs.250
Depreciate Buildings 5% and cycles 20%
4. A Ltd. Was registered with an authorized capital of Rs.6,00,000 in equity
shares of Rs.10 each. The following is its trail balance on 31
st
March 2008.
Particulars Debit (Rs.) Credit
(Rs.)
Goodwill 25,000
Cash 750
Bank 39,900
Purchases 185000
Preliminary expenses 5000
Share capital
400000
12% Debentures
300000
P & L A/C (Cr.)
26250
Calls in arrears 7500
Premises 300000
Plant and machineries 330000
Interim Dividend 39250
Sales
415000
Stock (1.4.2007) 75000
Furniture & Fixtures 7200
Sundry Debtors 87000
Wages 84865
General Expenses 6835
Freight and carriage 13115
Salaries 14500
Directors Fees 5725
Bad debts 2110
Debentures interest paid 18000
Bills payable
37000
Sundry creditors
40000
General reserve
25000
Provision for bad debts
3500
Total 12467501246750
Prepare Profit and Loss account, Profit and Loss appropriation A/C and
balancesheet in proper form after making the following adjustments:
Depreciate Plant and machinery by 15%
Write off Rs.500 from preliminary expenses
Provide for 6 months interest on debentures
Leave bad and doubtful debts provision at 5% on sundry debtors
Provide for income tax at 50%
Stock on 31-3-2008 was Rs.95,000
UNIT III - ANALYSIS OF FINANCIAL STATEMENTS 12
Analysis of financial statements: Comparative Statements-Common size statements-Trend analysis ?
Financial ratio analysis, Uses and limitations of Ratio analysis-cash flow (as per Accounting Standard
3) and funds flow statement analysis.
Q.No Unit - III - Part - A ? Question Level Competence
1 What are financial statements? BTL 1
Remember
2 List out various sources and applications of cash. BTL 2
Understand
3 How would you show your understanding of debt equity ratio? BTL 3
Apply
4 List any two objectives of financial statements? BTL 4
Analyze
5 Can you assess the value or importance of funds flow statement? BTL 5
Evaluate
6 Differentiate between cash flow and funds flow statements. BTL 6
Create
7 What does cash flow analysis mean? BTL 1
Remember
8 How would you explain funds flow statement? BTL 2
Understand
9 How the various activities are classified (as per AS-3 revised) while
preparing cash flow statement?
BTL 3
Apply
10 What is meant by Trend analysis? BTL 4
Analyze
11 Can you identify the uses of cash flow statement? BTL 5
Evaluate
12 What is the difference between current ratio and liquid ratio BTL 6
Create
13 Can you recall the scope & significance of Ratio analysis? BTL 1
Remember
14 Outline the scope of Common size statements. BTL 2
Understand
15 How would you show your understanding of Cash inflow and cash
outflow?
BTL 3
Apply
16
Calculate Debtors Turnover Ratio from the following:
Total Sales 2,00,000
Cash Sales 40,000
Opening debtors 35,000
Closing Debtors 45,000
BTL 4
Analyze
17 Define Current ratio. BTL 1
Remember
18 What is the meaning of ?Funds from operations?? BTL 2
Understand
19 What are the benefits of schedule of changes in working capital? BTL 1
Remember
20 Can you list the types of working capital. BTL 1
Remember
Q.No Unit - III - Part - B ? Question Level
Competence
1
i) What are the essential attributes of financial statements ? importance and
limitations of it? (7 marks)
ii) Current Ratio is 3:5. Working capital is Rs.9,00,000. How would you show
current assets and current liabilities. (6 marks)
BTL 1
Remember
2
i) Explain the various tools and techniques of financial statements. (7 marks)
ii) Shine Limited has a current ratio 4.5:1 and quick ratio 3:1; if the stock is
36,000. Show current liabilities and current assets. (6 marks)
BTL 2
Understand
3 Define Ratio Analysis; List the advantages and Disadvantages of it. BTL 3
Apply
4 Discuss briefly the various methods of classification or types of Ratios. BTL 4
Analyze
Show the balance sheet of the concern from the following details: Evaluate
BTL 5 5
The gross profit was Rs.60,000 closing stock was Rs.5000 in excess of the opening
stock.
Stock velocity 6
Capital turnover ratio 2
Fixed assets turnover ratio 4
Gross profit ratio 20%
Debt collection period 2 months
Creditors payment period 73 days
6 Evaluate the specimen of Comparative Statements-Common size
statements.
BTL 6
Create
7 i) Prepare common size statement from the following.
Particular 2017 2018
Sales 30,00,000 35,00,000
Cost of production 15,50,000 17,00,000
Administrative expense 5,00,000 6,50,000
Selling expense 2,00,000 2,30,000
Interest 3,50,000 3,70,000
Divided received
(income)
2,50,000 2,00,000
iii)Prepare a comparative statement from the following.
Particuluar 2017 2018
Sales 25,00,000 30,00,000
Cost of goods sold 14,00,000 15,50,000
Operation expense :
Administrative expenses
Selling expenses
3,50,000
2,70,000
2,90,000
3,60,000
Non operation expenses:
Interest
Income tax
1,60,000
1,70,000
1,40,000
3,30,000
BTL 1
Remember
8 Explain the terms funds, funds flow and funds flow statement, List the advantages
and Disadvantages of it.
BTL 2
Understand
Identify the preparation of schedule of changes in working capital and Adjusted
Profit and Loss Account.
Explain terms operating activities, inventory activities, financing activities.
BTL 3
Apply
9
10
i) Analyze the procedure for the preparation of funds flow statement.
ii) The summarized balance sheet of KLtd as on 31.3.2015 nad 31.5.2016 are
as follows
Analyze
Liabilities 2017 2018 Assets 2017 2018
Rs Rs Rs Rs
Share capital 10000 15000 Fixed assets 10000 20000
P/L a/c 4000 6000 Current
assets
13000 14500
Provision for tax 2000 3000
Proposed
dividend
1000 1500
Sundry creditor 4000 6000
Outstanding
expenses
2000 3000
Total 23000 34500Total 2300034500
i) Tax paid during the year 2018 Rs 2500.
ii) Dividend paid during 2018 Rs 1000.
Prepare a statement of sources and applications of funds, showing changes in
the working capital.
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DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation ? 2019
Academic Year 2019 - 2020
Prepared by
Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J ? Asst. Professor (OG) / MBA
?
DEPARTMENT OF MANAGEMENT STUDIES
1915103 ? ACCOUNTING FOR MANAGEMENT
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:
BTL 1
Remember
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
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 31
st
December 2015. Prepare Final
accounts as on the date.
BTL 4
Analyze
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
Premium
300
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
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:
BTL 6
Create
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
07.01.2015 Sold goods to Hari 150
08.01.2015 Commission received in cash 200
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)
iii) 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:
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.
BTL 4
Analyze
14.
i) How would you describe the final Accounts for the year ended
on 31
st
march 1994? The following balances were extracted from
the books of Prasad on 31
st
March 1994.
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 overdraft1570
Salaries 850 Sales 14690
Travelling expenses 300 Bills payable 1350
Cash 210
Stock 2450
Discount allowed 40
Drawings 600
TOTAL 27460 TOTAL 27460
BTL 1
Details Rs. Details Rs.
Capital 50,000 Creditors 5,000 Remember
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 31
st
March 1994 was valued at Rs.47,000.
Q.No Unit -I -Part -C ?Questions
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 31
st
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 17140001714000
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 31
st
2015 and a balance sheet as on that date:
Adjustments Required:
Stock on 31-12-2015 Rs.4900
Salaries Unpaid Rs.300
Rent paid in advance Rs.200
Insurance prepaid Rs.90
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 2000
Stock 1-1-2016 5200
Debtors 2500
Creditors 1,000
TOTAL 66,000 66,000
UNIT II ? COMPANY ACCOUNTS 12
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 of the company?
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 1
st
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
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
The total turnover for the year ending December 31,2016 was Rs
5,00,000 divided into Rs 1,50,000 for the period upto may 1, 2016
and Rs 3,50,000 for the remaining period. Prepare the profit and
loss account and ascertain the ?Profit prior to? and after
incorporation.
BTL 1
Remember
Dr Cr
Particular Rs Particular Rs
To rent & taxes 12,000 By trading 1,55,000
account
To insurance 3,000
To EB 2,400
To salaries 36,000
To directors fee 3,000
To auditors fee 1,600
To commission 6,000
To advertisement 4,000
To discount 3,500
To office expenses 7,500
To carriage 3,000
To bank charges 1,500
To Preliminary expenses 6,500
To bad debts 2,000
To interest on loan 3,000
To net profit 60,000
1,55,000 1,55,000
Q.No. Unit - II - Part - C ? Question
1. A Ltd. Offered 100,000 equity shares of nominal value of Rs.10 each for public
subscription at Rs.12. The amount payable on the shares were shares were on
application Rs.450; on allotment (including premium)Rs.4.50; on first and final
call Rs.3.00 The actual subscription was only for 90,000 shares. All money
payable by shareholders was received from sudhakar who had taken 1,000
shares but failed to pay the final call. His shares were forfeited and reissued to
Prabhakar at Rs.6 each. Show journal entries in the books of the company in
respect of the above (including cash transactions).
2. Mohan company Ltd., was incorporated on 30
th
June 2005 to take over the
of K.Mohan as from 1
st
January 2015. The financial accounts for the
year ended 31
st
December 2015.
Particulars Rs.Rs.
Sales:
January to June
July to December
Total
120,000
180,000
3,00,000
Less: Purchases:
January to June
75000
July to December 120,000
195,000
Gross Profit
1,05,000
Less: Salaries 15000
Selling expenses 3000
Depreciation 1500
Directors remuneration 750
Debenture Interest 90
Administration Expenses(Rent, Rates etc.) 4500 24840
Balance
80,160
You are request to prepare a statement apportioning the balance of profit
between the periods prior to after incorporation and show the profit and loss
appropriation account for the year ended 31
st
December 2015.
3. Poornima Ltd., incorporated in April 1, 2008, with a capital of Rs.50,000 in
equity shares of Rs.10 each took over the running of poornima as
from January 1, 2008. The purchase price Rs.20,000 was settled on July 1,
2008, together with interest at 10% per annum by fully paid shares for
Rs.17500 and the balance by cheque.
To company?s Trial Balance as on December 31, 2008, was as below:
Particulars Rs. Rs.
Cash and Bank balances (Cash Rs. 180) 4,860
Share capital
22,500
Land and Buildings 8,000
Fixtures 750
Cycles 1000
Salaries 1200
Purchases 48500
Sales
45000
Debtors and Creditors 4500 3000
Rent from tenants
600
Rent, Rates and taxes 300
Building upkeep 150
Director?s fees 720
Sundry charges 120
Interest to vendor 1000
Total 71,10071,100
Prepare the final accounts for the year ending December 31, 2008, considering
the following additional details:
Stock at end Rs.14,000
Bad debts Rs.200 (including Rs.50 on debtors taken over from vendor) to be
written off.
Sales above include sales up to april, 1, 2008, Rs.7500.
Provide for doubtful debts.Rs.250
Depreciate Buildings 5% and cycles 20%
4. A Ltd. Was registered with an authorized capital of Rs.6,00,000 in equity
shares of Rs.10 each. The following is its trail balance on 31
st
March 2008.
Particulars Debit (Rs.) Credit
(Rs.)
Goodwill 25,000
Cash 750
Bank 39,900
Purchases 185000
Preliminary expenses 5000
Share capital
400000
12% Debentures
300000
P & L A/C (Cr.)
26250
Calls in arrears 7500
Premises 300000
Plant and machineries 330000
Interim Dividend 39250
Sales
415000
Stock (1.4.2007) 75000
Furniture & Fixtures 7200
Sundry Debtors 87000
Wages 84865
General Expenses 6835
Freight and carriage 13115
Salaries 14500
Directors Fees 5725
Bad debts 2110
Debentures interest paid 18000
Bills payable
37000
Sundry creditors
40000
General reserve
25000
Provision for bad debts
3500
Total 12467501246750
Prepare Profit and Loss account, Profit and Loss appropriation A/C and
balancesheet in proper form after making the following adjustments:
Depreciate Plant and machinery by 15%
Write off Rs.500 from preliminary expenses
Provide for 6 months interest on debentures
Leave bad and doubtful debts provision at 5% on sundry debtors
Provide for income tax at 50%
Stock on 31-3-2008 was Rs.95,000
UNIT III - ANALYSIS OF FINANCIAL STATEMENTS 12
Analysis of financial statements: Comparative Statements-Common size statements-Trend analysis ?
Financial ratio analysis, Uses and limitations of Ratio analysis-cash flow (as per Accounting Standard
3) and funds flow statement analysis.
Q.No Unit - III - Part - A ? Question Level Competence
1 What are financial statements? BTL 1
Remember
2 List out various sources and applications of cash. BTL 2
Understand
3 How would you show your understanding of debt equity ratio? BTL 3
Apply
4 List any two objectives of financial statements? BTL 4
Analyze
5 Can you assess the value or importance of funds flow statement? BTL 5
Evaluate
6 Differentiate between cash flow and funds flow statements. BTL 6
Create
7 What does cash flow analysis mean? BTL 1
Remember
8 How would you explain funds flow statement? BTL 2
Understand
9 How the various activities are classified (as per AS-3 revised) while
preparing cash flow statement?
BTL 3
Apply
10 What is meant by Trend analysis? BTL 4
Analyze
11 Can you identify the uses of cash flow statement? BTL 5
Evaluate
12 What is the difference between current ratio and liquid ratio BTL 6
Create
13 Can you recall the scope & significance of Ratio analysis? BTL 1
Remember
14 Outline the scope of Common size statements. BTL 2
Understand
15 How would you show your understanding of Cash inflow and cash
outflow?
BTL 3
Apply
16
Calculate Debtors Turnover Ratio from the following:
Total Sales 2,00,000
Cash Sales 40,000
Opening debtors 35,000
Closing Debtors 45,000
BTL 4
Analyze
17 Define Current ratio. BTL 1
Remember
18 What is the meaning of ?Funds from operations?? BTL 2
Understand
19 What are the benefits of schedule of changes in working capital? BTL 1
Remember
20 Can you list the types of working capital. BTL 1
Remember
Q.No Unit - III - Part - B ? Question Level
Competence
1
i) What are the essential attributes of financial statements ? importance and
limitations of it? (7 marks)
ii) Current Ratio is 3:5. Working capital is Rs.9,00,000. How would you show
current assets and current liabilities. (6 marks)
BTL 1
Remember
2
i) Explain the various tools and techniques of financial statements. (7 marks)
ii) Shine Limited has a current ratio 4.5:1 and quick ratio 3:1; if the stock is
36,000. Show current liabilities and current assets. (6 marks)
BTL 2
Understand
3 Define Ratio Analysis; List the advantages and Disadvantages of it. BTL 3
Apply
4 Discuss briefly the various methods of classification or types of Ratios. BTL 4
Analyze
Show the balance sheet of the concern from the following details: Evaluate
BTL 5 5
The gross profit was Rs.60,000 closing stock was Rs.5000 in excess of the opening
stock.
Stock velocity 6
Capital turnover ratio 2
Fixed assets turnover ratio 4
Gross profit ratio 20%
Debt collection period 2 months
Creditors payment period 73 days
6 Evaluate the specimen of Comparative Statements-Common size
statements.
BTL 6
Create
7 i) Prepare common size statement from the following.
Particular 2017 2018
Sales 30,00,000 35,00,000
Cost of production 15,50,000 17,00,000
Administrative expense 5,00,000 6,50,000
Selling expense 2,00,000 2,30,000
Interest 3,50,000 3,70,000
Divided received
(income)
2,50,000 2,00,000
iii)Prepare a comparative statement from the following.
Particuluar 2017 2018
Sales 25,00,000 30,00,000
Cost of goods sold 14,00,000 15,50,000
Operation expense :
Administrative expenses
Selling expenses
3,50,000
2,70,000
2,90,000
3,60,000
Non operation expenses:
Interest
Income tax
1,60,000
1,70,000
1,40,000
3,30,000
BTL 1
Remember
8 Explain the terms funds, funds flow and funds flow statement, List the advantages
and Disadvantages of it.
BTL 2
Understand
Identify the preparation of schedule of changes in working capital and Adjusted
Profit and Loss Account.
Explain terms operating activities, inventory activities, financing activities.
BTL 3
Apply
9
10
i) Analyze the procedure for the preparation of funds flow statement.
ii) The summarized balance sheet of KLtd as on 31.3.2015 nad 31.5.2016 are
as follows
Analyze
Liabilities 2017 2018 Assets 2017 2018
Rs Rs Rs Rs
Share capital 10000 15000 Fixed assets 10000 20000
P/L a/c 4000 6000 Current
assets
13000 14500
Provision for tax 2000 3000
Proposed
dividend
1000 1500
Sundry creditor 4000 6000
Outstanding
expenses
2000 3000
Total 23000 34500Total 2300034500
i) Tax paid during the year 2018 Rs 2500.
ii) Dividend paid during 2018 Rs 1000.
Prepare a statement of sources and applications of funds, showing changes in
the working capital.
11
How would you describe funds flow statement from the following figures.
BTL 1
Remember
Liabilities 31-12-
2001
31-12-
2002
Assets 31-12-
2001
31-12-
2002
Creditors 319000 365000 Cash 130000 40000
------ 200000 Debtors 100000 Provision
for
dividend
160000
Long term
loan
-------- 535000 Stock 235000 255000
Equity
capital
3600000 4000000 Land and
Buildings
540000 1020000
Surplus 100000 129000 Plant and
Machinery
2804000 3544000
Furniture 210000 210000
Total 4019000 5229000 Total 4019000 5229000
12
Show the funds from operation and cash from operation from the following
balance sheets of subha Ltd?
BTL 2
Understand
Particulars 1997 (Rs.) 1998 (Rs.)
Equity share capital 400000 400000
Reserves and surplus 282000 346000
Depreciation Reserve 20000 28000
Secured loans 40000 60000
Creditors for goods 129000106000
Outstanding expenses 17000 3000
Total 888000943000
Plant and Equipment (Cost) 570000 600000
Inventories 196000226000
Debtors 7900057000
Cash at Bank 4300060000
Total 888000943000
13
Analyze and prepare the cash flow statement. A summary of the financial
position of Mr.x for the year 1996 and 1997 is given as follows:
There were no drawings or sale of fixed assets during the year.
BTL 4
Analyze
Liabilities 1996 1997 Assets 1996 1997
Capital 70000 83000 cash 7000 13000
Creditors 10000 12000 Debtors 20000 18000
Stock 40000 52000
Fixed 13000 12000
assets
Total 80000 95000 Total 80000 95000
14
How would you describe funds flow statement for the year ended 31
st
December
2001 from the following particulars?
BTL 1
Remember
Particulars Rs.
Net profit before writing off goodwill 21500
Depreciation written off on fixed assets 3500
Goodwill written off from profits 5000
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DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation ? 2019
Academic Year 2019 - 2020
Prepared by
Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J ? Asst. Professor (OG) / MBA
?
DEPARTMENT OF MANAGEMENT STUDIES
1915103 ? ACCOUNTING FOR MANAGEMENT
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:
BTL 1
Remember
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
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 31
st
December 2015. Prepare Final
accounts as on the date.
BTL 4
Analyze
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
Premium
300
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
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:
BTL 6
Create
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
07.01.2015 Sold goods to Hari 150
08.01.2015 Commission received in cash 200
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)
iii) 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:
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.
BTL 4
Analyze
14.
i) How would you describe the final Accounts for the year ended
on 31
st
march 1994? The following balances were extracted from
the books of Prasad on 31
st
March 1994.
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 overdraft1570
Salaries 850 Sales 14690
Travelling expenses 300 Bills payable 1350
Cash 210
Stock 2450
Discount allowed 40
Drawings 600
TOTAL 27460 TOTAL 27460
BTL 1
Details Rs. Details Rs.
Capital 50,000 Creditors 5,000 Remember
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 31
st
March 1994 was valued at Rs.47,000.
Q.No Unit -I -Part -C ?Questions
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 31
st
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 17140001714000
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 31
st
2015 and a balance sheet as on that date:
Adjustments Required:
Stock on 31-12-2015 Rs.4900
Salaries Unpaid Rs.300
Rent paid in advance Rs.200
Insurance prepaid Rs.90
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 2000
Stock 1-1-2016 5200
Debtors 2500
Creditors 1,000
TOTAL 66,000 66,000
UNIT II ? COMPANY ACCOUNTS 12
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 of the company?
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 1
st
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
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
The total turnover for the year ending December 31,2016 was Rs
5,00,000 divided into Rs 1,50,000 for the period upto may 1, 2016
and Rs 3,50,000 for the remaining period. Prepare the profit and
loss account and ascertain the ?Profit prior to? and after
incorporation.
BTL 1
Remember
Dr Cr
Particular Rs Particular Rs
To rent & taxes 12,000 By trading 1,55,000
account
To insurance 3,000
To EB 2,400
To salaries 36,000
To directors fee 3,000
To auditors fee 1,600
To commission 6,000
To advertisement 4,000
To discount 3,500
To office expenses 7,500
To carriage 3,000
To bank charges 1,500
To Preliminary expenses 6,500
To bad debts 2,000
To interest on loan 3,000
To net profit 60,000
1,55,000 1,55,000
Q.No. Unit - II - Part - C ? Question
1. A Ltd. Offered 100,000 equity shares of nominal value of Rs.10 each for public
subscription at Rs.12. The amount payable on the shares were shares were on
application Rs.450; on allotment (including premium)Rs.4.50; on first and final
call Rs.3.00 The actual subscription was only for 90,000 shares. All money
payable by shareholders was received from sudhakar who had taken 1,000
shares but failed to pay the final call. His shares were forfeited and reissued to
Prabhakar at Rs.6 each. Show journal entries in the books of the company in
respect of the above (including cash transactions).
2. Mohan company Ltd., was incorporated on 30
th
June 2005 to take over the
of K.Mohan as from 1
st
January 2015. The financial accounts for the
year ended 31
st
December 2015.
Particulars Rs.Rs.
Sales:
January to June
July to December
Total
120,000
180,000
3,00,000
Less: Purchases:
January to June
75000
July to December 120,000
195,000
Gross Profit
1,05,000
Less: Salaries 15000
Selling expenses 3000
Depreciation 1500
Directors remuneration 750
Debenture Interest 90
Administration Expenses(Rent, Rates etc.) 4500 24840
Balance
80,160
You are request to prepare a statement apportioning the balance of profit
between the periods prior to after incorporation and show the profit and loss
appropriation account for the year ended 31
st
December 2015.
3. Poornima Ltd., incorporated in April 1, 2008, with a capital of Rs.50,000 in
equity shares of Rs.10 each took over the running of poornima as
from January 1, 2008. The purchase price Rs.20,000 was settled on July 1,
2008, together with interest at 10% per annum by fully paid shares for
Rs.17500 and the balance by cheque.
To company?s Trial Balance as on December 31, 2008, was as below:
Particulars Rs. Rs.
Cash and Bank balances (Cash Rs. 180) 4,860
Share capital
22,500
Land and Buildings 8,000
Fixtures 750
Cycles 1000
Salaries 1200
Purchases 48500
Sales
45000
Debtors and Creditors 4500 3000
Rent from tenants
600
Rent, Rates and taxes 300
Building upkeep 150
Director?s fees 720
Sundry charges 120
Interest to vendor 1000
Total 71,10071,100
Prepare the final accounts for the year ending December 31, 2008, considering
the following additional details:
Stock at end Rs.14,000
Bad debts Rs.200 (including Rs.50 on debtors taken over from vendor) to be
written off.
Sales above include sales up to april, 1, 2008, Rs.7500.
Provide for doubtful debts.Rs.250
Depreciate Buildings 5% and cycles 20%
4. A Ltd. Was registered with an authorized capital of Rs.6,00,000 in equity
shares of Rs.10 each. The following is its trail balance on 31
st
March 2008.
Particulars Debit (Rs.) Credit
(Rs.)
Goodwill 25,000
Cash 750
Bank 39,900
Purchases 185000
Preliminary expenses 5000
Share capital
400000
12% Debentures
300000
P & L A/C (Cr.)
26250
Calls in arrears 7500
Premises 300000
Plant and machineries 330000
Interim Dividend 39250
Sales
415000
Stock (1.4.2007) 75000
Furniture & Fixtures 7200
Sundry Debtors 87000
Wages 84865
General Expenses 6835
Freight and carriage 13115
Salaries 14500
Directors Fees 5725
Bad debts 2110
Debentures interest paid 18000
Bills payable
37000
Sundry creditors
40000
General reserve
25000
Provision for bad debts
3500
Total 12467501246750
Prepare Profit and Loss account, Profit and Loss appropriation A/C and
balancesheet in proper form after making the following adjustments:
Depreciate Plant and machinery by 15%
Write off Rs.500 from preliminary expenses
Provide for 6 months interest on debentures
Leave bad and doubtful debts provision at 5% on sundry debtors
Provide for income tax at 50%
Stock on 31-3-2008 was Rs.95,000
UNIT III - ANALYSIS OF FINANCIAL STATEMENTS 12
Analysis of financial statements: Comparative Statements-Common size statements-Trend analysis ?
Financial ratio analysis, Uses and limitations of Ratio analysis-cash flow (as per Accounting Standard
3) and funds flow statement analysis.
Q.No Unit - III - Part - A ? Question Level Competence
1 What are financial statements? BTL 1
Remember
2 List out various sources and applications of cash. BTL 2
Understand
3 How would you show your understanding of debt equity ratio? BTL 3
Apply
4 List any two objectives of financial statements? BTL 4
Analyze
5 Can you assess the value or importance of funds flow statement? BTL 5
Evaluate
6 Differentiate between cash flow and funds flow statements. BTL 6
Create
7 What does cash flow analysis mean? BTL 1
Remember
8 How would you explain funds flow statement? BTL 2
Understand
9 How the various activities are classified (as per AS-3 revised) while
preparing cash flow statement?
BTL 3
Apply
10 What is meant by Trend analysis? BTL 4
Analyze
11 Can you identify the uses of cash flow statement? BTL 5
Evaluate
12 What is the difference between current ratio and liquid ratio BTL 6
Create
13 Can you recall the scope & significance of Ratio analysis? BTL 1
Remember
14 Outline the scope of Common size statements. BTL 2
Understand
15 How would you show your understanding of Cash inflow and cash
outflow?
BTL 3
Apply
16
Calculate Debtors Turnover Ratio from the following:
Total Sales 2,00,000
Cash Sales 40,000
Opening debtors 35,000
Closing Debtors 45,000
BTL 4
Analyze
17 Define Current ratio. BTL 1
Remember
18 What is the meaning of ?Funds from operations?? BTL 2
Understand
19 What are the benefits of schedule of changes in working capital? BTL 1
Remember
20 Can you list the types of working capital. BTL 1
Remember
Q.No Unit - III - Part - B ? Question Level
Competence
1
i) What are the essential attributes of financial statements ? importance and
limitations of it? (7 marks)
ii) Current Ratio is 3:5. Working capital is Rs.9,00,000. How would you show
current assets and current liabilities. (6 marks)
BTL 1
Remember
2
i) Explain the various tools and techniques of financial statements. (7 marks)
ii) Shine Limited has a current ratio 4.5:1 and quick ratio 3:1; if the stock is
36,000. Show current liabilities and current assets. (6 marks)
BTL 2
Understand
3 Define Ratio Analysis; List the advantages and Disadvantages of it. BTL 3
Apply
4 Discuss briefly the various methods of classification or types of Ratios. BTL 4
Analyze
Show the balance sheet of the concern from the following details: Evaluate
BTL 5 5
The gross profit was Rs.60,000 closing stock was Rs.5000 in excess of the opening
stock.
Stock velocity 6
Capital turnover ratio 2
Fixed assets turnover ratio 4
Gross profit ratio 20%
Debt collection period 2 months
Creditors payment period 73 days
6 Evaluate the specimen of Comparative Statements-Common size
statements.
BTL 6
Create
7 i) Prepare common size statement from the following.
Particular 2017 2018
Sales 30,00,000 35,00,000
Cost of production 15,50,000 17,00,000
Administrative expense 5,00,000 6,50,000
Selling expense 2,00,000 2,30,000
Interest 3,50,000 3,70,000
Divided received
(income)
2,50,000 2,00,000
iii)Prepare a comparative statement from the following.
Particuluar 2017 2018
Sales 25,00,000 30,00,000
Cost of goods sold 14,00,000 15,50,000
Operation expense :
Administrative expenses
Selling expenses
3,50,000
2,70,000
2,90,000
3,60,000
Non operation expenses:
Interest
Income tax
1,60,000
1,70,000
1,40,000
3,30,000
BTL 1
Remember
8 Explain the terms funds, funds flow and funds flow statement, List the advantages
and Disadvantages of it.
BTL 2
Understand
Identify the preparation of schedule of changes in working capital and Adjusted
Profit and Loss Account.
Explain terms operating activities, inventory activities, financing activities.
BTL 3
Apply
9
10
i) Analyze the procedure for the preparation of funds flow statement.
ii) The summarized balance sheet of KLtd as on 31.3.2015 nad 31.5.2016 are
as follows
Analyze
Liabilities 2017 2018 Assets 2017 2018
Rs Rs Rs Rs
Share capital 10000 15000 Fixed assets 10000 20000
P/L a/c 4000 6000 Current
assets
13000 14500
Provision for tax 2000 3000
Proposed
dividend
1000 1500
Sundry creditor 4000 6000
Outstanding
expenses
2000 3000
Total 23000 34500Total 2300034500
i) Tax paid during the year 2018 Rs 2500.
ii) Dividend paid during 2018 Rs 1000.
Prepare a statement of sources and applications of funds, showing changes in
the working capital.
11
How would you describe funds flow statement from the following figures.
BTL 1
Remember
Liabilities 31-12-
2001
31-12-
2002
Assets 31-12-
2001
31-12-
2002
Creditors 319000 365000 Cash 130000 40000
------ 200000 Debtors 100000 Provision
for
dividend
160000
Long term
loan
-------- 535000 Stock 235000 255000
Equity
capital
3600000 4000000 Land and
Buildings
540000 1020000
Surplus 100000 129000 Plant and
Machinery
2804000 3544000
Furniture 210000 210000
Total 4019000 5229000 Total 4019000 5229000
12
Show the funds from operation and cash from operation from the following
balance sheets of subha Ltd?
BTL 2
Understand
Particulars 1997 (Rs.) 1998 (Rs.)
Equity share capital 400000 400000
Reserves and surplus 282000 346000
Depreciation Reserve 20000 28000
Secured loans 40000 60000
Creditors for goods 129000106000
Outstanding expenses 17000 3000
Total 888000943000
Plant and Equipment (Cost) 570000 600000
Inventories 196000226000
Debtors 7900057000
Cash at Bank 4300060000
Total 888000943000
13
Analyze and prepare the cash flow statement. A summary of the financial
position of Mr.x for the year 1996 and 1997 is given as follows:
There were no drawings or sale of fixed assets during the year.
BTL 4
Analyze
Liabilities 1996 1997 Assets 1996 1997
Capital 70000 83000 cash 7000 13000
Creditors 10000 12000 Debtors 20000 18000
Stock 40000 52000
Fixed 13000 12000
assets
Total 80000 95000 Total 80000 95000
14
How would you describe funds flow statement for the year ended 31
st
December
2001 from the following particulars?
BTL 1
Remember
Particulars Rs.
Net profit before writing off goodwill 21500
Depreciation written off on fixed assets 3500
Goodwill written off from profits 5000
Dividends paid 7000
Shares issued for cash 10000
Purchase of machinery 20000
Increase in working capital 8000
Q.No Unit - III - Part - C ? Questions
1
Prepare common size statement from the following.
Particular 2017 2018
Assets
Cash 2,70,000 2,90,000
Debtors 1,70,000 1,50,000
Stock 1,20,000 1,00,000
Outstanding Income 30,000 20,000
Prepaid Expenses 10,000 30,000
Fixed assets 11,00,000 14,10,000
17,00,000 20,00,000
Liabilities
Creditors 1,40,000 1,50,000
Bills payable 60,000 40,000
Long term loan 5,00,000 6,10,000
Capital 10,00,000 12,00,000
17,00,000 20,00,000
2 From the balance sheets of ABC ltd., make out :
i. A statement of changes in the working capital
ii. A funds flow statement
Balance Sheet
Following is the additional information available :
1. Depreciation of Rs. 10,000 and Rs. 20,000 have been charged on plant and land and
buildings respectively in the year 2000.
2. An interim dividend of Rs. 20,000 has been paid in the year 2000.
3. Income tax of Rs. 35,000 has been paid in the year 2000.
3 Following are the balance sheets of Krishna Ltd Jaipur, for the year 2008 and 2009.
Liabilities 31.03.1999 31.03.2000 Assets 31.03.1999 31.03.2000
Eq. Share 3,00,000 4,00,000 Goodwill 1,15,000 90,000
Capital
2,00,000 1,70,000 8% 1,50,000 1,00,000 Land and
Building redeemable
pref. S.
Capital
General 40,000 70,000 Plant 80,000 2,00,000
reserve
P/L a/c 30,000 48,000 Debtors 1,60,000 2,00,000
Proposed 42,000 50,000 Stock 77,000 1,09,000
dividends
Creditors 55,000 83,000 Bills 20,000 30,000
receivable
Bills payable 20,000 16,000 Cash in 15,000 10,000
hand
Provision for 40,000 50,000 Cash at 10,000 8,000
taxation bank
6,77,000 8,17,000 6,77,000 8,17,000
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DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation ? 2019
Academic Year 2019 - 2020
Prepared by
Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J ? Asst. Professor (OG) / MBA
?
DEPARTMENT OF MANAGEMENT STUDIES
1915103 ? ACCOUNTING FOR MANAGEMENT
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:
BTL 1
Remember
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
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 31
st
December 2015. Prepare Final
accounts as on the date.
BTL 4
Analyze
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
Premium
300
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
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:
BTL 6
Create
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
07.01.2015 Sold goods to Hari 150
08.01.2015 Commission received in cash 200
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)
iii) 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:
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.
BTL 4
Analyze
14.
i) How would you describe the final Accounts for the year ended
on 31
st
march 1994? The following balances were extracted from
the books of Prasad on 31
st
March 1994.
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 overdraft1570
Salaries 850 Sales 14690
Travelling expenses 300 Bills payable 1350
Cash 210
Stock 2450
Discount allowed 40
Drawings 600
TOTAL 27460 TOTAL 27460
BTL 1
Details Rs. Details Rs.
Capital 50,000 Creditors 5,000 Remember
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 31
st
March 1994 was valued at Rs.47,000.
Q.No Unit -I -Part -C ?Questions
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 31
st
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 17140001714000
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 31
st
2015 and a balance sheet as on that date:
Adjustments Required:
Stock on 31-12-2015 Rs.4900
Salaries Unpaid Rs.300
Rent paid in advance Rs.200
Insurance prepaid Rs.90
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 2000
Stock 1-1-2016 5200
Debtors 2500
Creditors 1,000
TOTAL 66,000 66,000
UNIT II ? COMPANY ACCOUNTS 12
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 of the company?
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 1
st
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
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
The total turnover for the year ending December 31,2016 was Rs
5,00,000 divided into Rs 1,50,000 for the period upto may 1, 2016
and Rs 3,50,000 for the remaining period. Prepare the profit and
loss account and ascertain the ?Profit prior to? and after
incorporation.
BTL 1
Remember
Dr Cr
Particular Rs Particular Rs
To rent & taxes 12,000 By trading 1,55,000
account
To insurance 3,000
To EB 2,400
To salaries 36,000
To directors fee 3,000
To auditors fee 1,600
To commission 6,000
To advertisement 4,000
To discount 3,500
To office expenses 7,500
To carriage 3,000
To bank charges 1,500
To Preliminary expenses 6,500
To bad debts 2,000
To interest on loan 3,000
To net profit 60,000
1,55,000 1,55,000
Q.No. Unit - II - Part - C ? Question
1. A Ltd. Offered 100,000 equity shares of nominal value of Rs.10 each for public
subscription at Rs.12. The amount payable on the shares were shares were on
application Rs.450; on allotment (including premium)Rs.4.50; on first and final
call Rs.3.00 The actual subscription was only for 90,000 shares. All money
payable by shareholders was received from sudhakar who had taken 1,000
shares but failed to pay the final call. His shares were forfeited and reissued to
Prabhakar at Rs.6 each. Show journal entries in the books of the company in
respect of the above (including cash transactions).
2. Mohan company Ltd., was incorporated on 30
th
June 2005 to take over the
of K.Mohan as from 1
st
January 2015. The financial accounts for the
year ended 31
st
December 2015.
Particulars Rs.Rs.
Sales:
January to June
July to December
Total
120,000
180,000
3,00,000
Less: Purchases:
January to June
75000
July to December 120,000
195,000
Gross Profit
1,05,000
Less: Salaries 15000
Selling expenses 3000
Depreciation 1500
Directors remuneration 750
Debenture Interest 90
Administration Expenses(Rent, Rates etc.) 4500 24840
Balance
80,160
You are request to prepare a statement apportioning the balance of profit
between the periods prior to after incorporation and show the profit and loss
appropriation account for the year ended 31
st
December 2015.
3. Poornima Ltd., incorporated in April 1, 2008, with a capital of Rs.50,000 in
equity shares of Rs.10 each took over the running of poornima as
from January 1, 2008. The purchase price Rs.20,000 was settled on July 1,
2008, together with interest at 10% per annum by fully paid shares for
Rs.17500 and the balance by cheque.
To company?s Trial Balance as on December 31, 2008, was as below:
Particulars Rs. Rs.
Cash and Bank balances (Cash Rs. 180) 4,860
Share capital
22,500
Land and Buildings 8,000
Fixtures 750
Cycles 1000
Salaries 1200
Purchases 48500
Sales
45000
Debtors and Creditors 4500 3000
Rent from tenants
600
Rent, Rates and taxes 300
Building upkeep 150
Director?s fees 720
Sundry charges 120
Interest to vendor 1000
Total 71,10071,100
Prepare the final accounts for the year ending December 31, 2008, considering
the following additional details:
Stock at end Rs.14,000
Bad debts Rs.200 (including Rs.50 on debtors taken over from vendor) to be
written off.
Sales above include sales up to april, 1, 2008, Rs.7500.
Provide for doubtful debts.Rs.250
Depreciate Buildings 5% and cycles 20%
4. A Ltd. Was registered with an authorized capital of Rs.6,00,000 in equity
shares of Rs.10 each. The following is its trail balance on 31
st
March 2008.
Particulars Debit (Rs.) Credit
(Rs.)
Goodwill 25,000
Cash 750
Bank 39,900
Purchases 185000
Preliminary expenses 5000
Share capital
400000
12% Debentures
300000
P & L A/C (Cr.)
26250
Calls in arrears 7500
Premises 300000
Plant and machineries 330000
Interim Dividend 39250
Sales
415000
Stock (1.4.2007) 75000
Furniture & Fixtures 7200
Sundry Debtors 87000
Wages 84865
General Expenses 6835
Freight and carriage 13115
Salaries 14500
Directors Fees 5725
Bad debts 2110
Debentures interest paid 18000
Bills payable
37000
Sundry creditors
40000
General reserve
25000
Provision for bad debts
3500
Total 12467501246750
Prepare Profit and Loss account, Profit and Loss appropriation A/C and
balancesheet in proper form after making the following adjustments:
Depreciate Plant and machinery by 15%
Write off Rs.500 from preliminary expenses
Provide for 6 months interest on debentures
Leave bad and doubtful debts provision at 5% on sundry debtors
Provide for income tax at 50%
Stock on 31-3-2008 was Rs.95,000
UNIT III - ANALYSIS OF FINANCIAL STATEMENTS 12
Analysis of financial statements: Comparative Statements-Common size statements-Trend analysis ?
Financial ratio analysis, Uses and limitations of Ratio analysis-cash flow (as per Accounting Standard
3) and funds flow statement analysis.
Q.No Unit - III - Part - A ? Question Level Competence
1 What are financial statements? BTL 1
Remember
2 List out various sources and applications of cash. BTL 2
Understand
3 How would you show your understanding of debt equity ratio? BTL 3
Apply
4 List any two objectives of financial statements? BTL 4
Analyze
5 Can you assess the value or importance of funds flow statement? BTL 5
Evaluate
6 Differentiate between cash flow and funds flow statements. BTL 6
Create
7 What does cash flow analysis mean? BTL 1
Remember
8 How would you explain funds flow statement? BTL 2
Understand
9 How the various activities are classified (as per AS-3 revised) while
preparing cash flow statement?
BTL 3
Apply
10 What is meant by Trend analysis? BTL 4
Analyze
11 Can you identify the uses of cash flow statement? BTL 5
Evaluate
12 What is the difference between current ratio and liquid ratio BTL 6
Create
13 Can you recall the scope & significance of Ratio analysis? BTL 1
Remember
14 Outline the scope of Common size statements. BTL 2
Understand
15 How would you show your understanding of Cash inflow and cash
outflow?
BTL 3
Apply
16
Calculate Debtors Turnover Ratio from the following:
Total Sales 2,00,000
Cash Sales 40,000
Opening debtors 35,000
Closing Debtors 45,000
BTL 4
Analyze
17 Define Current ratio. BTL 1
Remember
18 What is the meaning of ?Funds from operations?? BTL 2
Understand
19 What are the benefits of schedule of changes in working capital? BTL 1
Remember
20 Can you list the types of working capital. BTL 1
Remember
Q.No Unit - III - Part - B ? Question Level
Competence
1
i) What are the essential attributes of financial statements ? importance and
limitations of it? (7 marks)
ii) Current Ratio is 3:5. Working capital is Rs.9,00,000. How would you show
current assets and current liabilities. (6 marks)
BTL 1
Remember
2
i) Explain the various tools and techniques of financial statements. (7 marks)
ii) Shine Limited has a current ratio 4.5:1 and quick ratio 3:1; if the stock is
36,000. Show current liabilities and current assets. (6 marks)
BTL 2
Understand
3 Define Ratio Analysis; List the advantages and Disadvantages of it. BTL 3
Apply
4 Discuss briefly the various methods of classification or types of Ratios. BTL 4
Analyze
Show the balance sheet of the concern from the following details: Evaluate
BTL 5 5
The gross profit was Rs.60,000 closing stock was Rs.5000 in excess of the opening
stock.
Stock velocity 6
Capital turnover ratio 2
Fixed assets turnover ratio 4
Gross profit ratio 20%
Debt collection period 2 months
Creditors payment period 73 days
6 Evaluate the specimen of Comparative Statements-Common size
statements.
BTL 6
Create
7 i) Prepare common size statement from the following.
Particular 2017 2018
Sales 30,00,000 35,00,000
Cost of production 15,50,000 17,00,000
Administrative expense 5,00,000 6,50,000
Selling expense 2,00,000 2,30,000
Interest 3,50,000 3,70,000
Divided received
(income)
2,50,000 2,00,000
iii)Prepare a comparative statement from the following.
Particuluar 2017 2018
Sales 25,00,000 30,00,000
Cost of goods sold 14,00,000 15,50,000
Operation expense :
Administrative expenses
Selling expenses
3,50,000
2,70,000
2,90,000
3,60,000
Non operation expenses:
Interest
Income tax
1,60,000
1,70,000
1,40,000
3,30,000
BTL 1
Remember
8 Explain the terms funds, funds flow and funds flow statement, List the advantages
and Disadvantages of it.
BTL 2
Understand
Identify the preparation of schedule of changes in working capital and Adjusted
Profit and Loss Account.
Explain terms operating activities, inventory activities, financing activities.
BTL 3
Apply
9
10
i) Analyze the procedure for the preparation of funds flow statement.
ii) The summarized balance sheet of KLtd as on 31.3.2015 nad 31.5.2016 are
as follows
Analyze
Liabilities 2017 2018 Assets 2017 2018
Rs Rs Rs Rs
Share capital 10000 15000 Fixed assets 10000 20000
P/L a/c 4000 6000 Current
assets
13000 14500
Provision for tax 2000 3000
Proposed
dividend
1000 1500
Sundry creditor 4000 6000
Outstanding
expenses
2000 3000
Total 23000 34500Total 2300034500
i) Tax paid during the year 2018 Rs 2500.
ii) Dividend paid during 2018 Rs 1000.
Prepare a statement of sources and applications of funds, showing changes in
the working capital.
11
How would you describe funds flow statement from the following figures.
BTL 1
Remember
Liabilities 31-12-
2001
31-12-
2002
Assets 31-12-
2001
31-12-
2002
Creditors 319000 365000 Cash 130000 40000
------ 200000 Debtors 100000 Provision
for
dividend
160000
Long term
loan
-------- 535000 Stock 235000 255000
Equity
capital
3600000 4000000 Land and
Buildings
540000 1020000
Surplus 100000 129000 Plant and
Machinery
2804000 3544000
Furniture 210000 210000
Total 4019000 5229000 Total 4019000 5229000
12
Show the funds from operation and cash from operation from the following
balance sheets of subha Ltd?
BTL 2
Understand
Particulars 1997 (Rs.) 1998 (Rs.)
Equity share capital 400000 400000
Reserves and surplus 282000 346000
Depreciation Reserve 20000 28000
Secured loans 40000 60000
Creditors for goods 129000106000
Outstanding expenses 17000 3000
Total 888000943000
Plant and Equipment (Cost) 570000 600000
Inventories 196000226000
Debtors 7900057000
Cash at Bank 4300060000
Total 888000943000
13
Analyze and prepare the cash flow statement. A summary of the financial
position of Mr.x for the year 1996 and 1997 is given as follows:
There were no drawings or sale of fixed assets during the year.
BTL 4
Analyze
Liabilities 1996 1997 Assets 1996 1997
Capital 70000 83000 cash 7000 13000
Creditors 10000 12000 Debtors 20000 18000
Stock 40000 52000
Fixed 13000 12000
assets
Total 80000 95000 Total 80000 95000
14
How would you describe funds flow statement for the year ended 31
st
December
2001 from the following particulars?
BTL 1
Remember
Particulars Rs.
Net profit before writing off goodwill 21500
Depreciation written off on fixed assets 3500
Goodwill written off from profits 5000
Dividends paid 7000
Shares issued for cash 10000
Purchase of machinery 20000
Increase in working capital 8000
Q.No Unit - III - Part - C ? Questions
1
Prepare common size statement from the following.
Particular 2017 2018
Assets
Cash 2,70,000 2,90,000
Debtors 1,70,000 1,50,000
Stock 1,20,000 1,00,000
Outstanding Income 30,000 20,000
Prepaid Expenses 10,000 30,000
Fixed assets 11,00,000 14,10,000
17,00,000 20,00,000
Liabilities
Creditors 1,40,000 1,50,000
Bills payable 60,000 40,000
Long term loan 5,00,000 6,10,000
Capital 10,00,000 12,00,000
17,00,000 20,00,000
2 From the balance sheets of ABC ltd., make out :
i. A statement of changes in the working capital
ii. A funds flow statement
Balance Sheet
Following is the additional information available :
1. Depreciation of Rs. 10,000 and Rs. 20,000 have been charged on plant and land and
buildings respectively in the year 2000.
2. An interim dividend of Rs. 20,000 has been paid in the year 2000.
3. Income tax of Rs. 35,000 has been paid in the year 2000.
3 Following are the balance sheets of Krishna Ltd Jaipur, for the year 2008 and 2009.
Liabilities 31.03.1999 31.03.2000 Assets 31.03.1999 31.03.2000
Eq. Share 3,00,000 4,00,000 Goodwill 1,15,000 90,000
Capital
2,00,000 1,70,000 8% 1,50,000 1,00,000 Land and
Building redeemable
pref. S.
Capital
General 40,000 70,000 Plant 80,000 2,00,000
reserve
P/L a/c 30,000 48,000 Debtors 1,60,000 2,00,000
Proposed 42,000 50,000 Stock 77,000 1,09,000
dividends
Creditors 55,000 83,000 Bills 20,000 30,000
receivable
Bills payable 20,000 16,000 Cash in 15,000 10,000
hand
Provision for 40,000 50,000 Cash at 10,000 8,000
taxation bank
6,77,000 8,17,000 6,77,000 8,17,000
Liabilities 31.03.2008 31.03.2009 Assets 31.03.2008 31.03.2009
Eq. Share
Capital
3,00,000 3,50,000 Fixed Assets
(Net)
5,10,000 6,20,000
15% pref. S.
Capital
2,00,000 1,00,000 Investments 30,000 80,000
15%
Debentures
1,00,000 2.00,000 Current Assets2,00,000 3,05,000
Reserves &
Surplus
1,10,000 2,70,000 Cash ?in-hand 40,000 70,000
Current
Liabilities
80,000 1,60,000 Discount on
Issue of
Debentures
10,000 5,000
7,90,000 10,80,000 7,90,000 10,80,000
Additional Information :
i. A machine with a book value of Rs. 40,000 was sold for Rs. 25,000.
ii. 15% preference shares were redeemed at a premium of 15% on 31.3.09 for Rs. 1, 00,000.
iii. Dividend on equity shares @ 15% was paid for the year 2008 during 2009.
iv. Depreciation charged during 2009 was Rs. 60,000.
You are asked to prepare a Cash Flow as per AS -3 (revised).
4 Describe the procedure for preparation of cash flow statement in details.
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DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation ? 2019
Academic Year 2019 - 2020
Prepared by
Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J ? Asst. Professor (OG) / MBA
?
DEPARTMENT OF MANAGEMENT STUDIES
1915103 ? ACCOUNTING FOR MANAGEMENT
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:
BTL 1
Remember
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
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 31
st
December 2015. Prepare Final
accounts as on the date.
BTL 4
Analyze
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
Premium
300
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
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:
BTL 6
Create
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
07.01.2015 Sold goods to Hari 150
08.01.2015 Commission received in cash 200
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)
iii) 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:
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.
BTL 4
Analyze
14.
i) How would you describe the final Accounts for the year ended
on 31
st
march 1994? The following balances were extracted from
the books of Prasad on 31
st
March 1994.
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 overdraft1570
Salaries 850 Sales 14690
Travelling expenses 300 Bills payable 1350
Cash 210
Stock 2450
Discount allowed 40
Drawings 600
TOTAL 27460 TOTAL 27460
BTL 1
Details Rs. Details Rs.
Capital 50,000 Creditors 5,000 Remember
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 31
st
March 1994 was valued at Rs.47,000.
Q.No Unit -I -Part -C ?Questions
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 31
st
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 17140001714000
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 31
st
2015 and a balance sheet as on that date:
Adjustments Required:
Stock on 31-12-2015 Rs.4900
Salaries Unpaid Rs.300
Rent paid in advance Rs.200
Insurance prepaid Rs.90
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 2000
Stock 1-1-2016 5200
Debtors 2500
Creditors 1,000
TOTAL 66,000 66,000
UNIT II ? COMPANY ACCOUNTS 12
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 of the company?
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 1
st
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
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
The total turnover for the year ending December 31,2016 was Rs
5,00,000 divided into Rs 1,50,000 for the period upto may 1, 2016
and Rs 3,50,000 for the remaining period. Prepare the profit and
loss account and ascertain the ?Profit prior to? and after
incorporation.
BTL 1
Remember
Dr Cr
Particular Rs Particular Rs
To rent & taxes 12,000 By trading 1,55,000
account
To insurance 3,000
To EB 2,400
To salaries 36,000
To directors fee 3,000
To auditors fee 1,600
To commission 6,000
To advertisement 4,000
To discount 3,500
To office expenses 7,500
To carriage 3,000
To bank charges 1,500
To Preliminary expenses 6,500
To bad debts 2,000
To interest on loan 3,000
To net profit 60,000
1,55,000 1,55,000
Q.No. Unit - II - Part - C ? Question
1. A Ltd. Offered 100,000 equity shares of nominal value of Rs.10 each for public
subscription at Rs.12. The amount payable on the shares were shares were on
application Rs.450; on allotment (including premium)Rs.4.50; on first and final
call Rs.3.00 The actual subscription was only for 90,000 shares. All money
payable by shareholders was received from sudhakar who had taken 1,000
shares but failed to pay the final call. His shares were forfeited and reissued to
Prabhakar at Rs.6 each. Show journal entries in the books of the company in
respect of the above (including cash transactions).
2. Mohan company Ltd., was incorporated on 30
th
June 2005 to take over the
of K.Mohan as from 1
st
January 2015. The financial accounts for the
year ended 31
st
December 2015.
Particulars Rs.Rs.
Sales:
January to June
July to December
Total
120,000
180,000
3,00,000
Less: Purchases:
January to June
75000
July to December 120,000
195,000
Gross Profit
1,05,000
Less: Salaries 15000
Selling expenses 3000
Depreciation 1500
Directors remuneration 750
Debenture Interest 90
Administration Expenses(Rent, Rates etc.) 4500 24840
Balance
80,160
You are request to prepare a statement apportioning the balance of profit
between the periods prior to after incorporation and show the profit and loss
appropriation account for the year ended 31
st
December 2015.
3. Poornima Ltd., incorporated in April 1, 2008, with a capital of Rs.50,000 in
equity shares of Rs.10 each took over the running of poornima as
from January 1, 2008. The purchase price Rs.20,000 was settled on July 1,
2008, together with interest at 10% per annum by fully paid shares for
Rs.17500 and the balance by cheque.
To company?s Trial Balance as on December 31, 2008, was as below:
Particulars Rs. Rs.
Cash and Bank balances (Cash Rs. 180) 4,860
Share capital
22,500
Land and Buildings 8,000
Fixtures 750
Cycles 1000
Salaries 1200
Purchases 48500
Sales
45000
Debtors and Creditors 4500 3000
Rent from tenants
600
Rent, Rates and taxes 300
Building upkeep 150
Director?s fees 720
Sundry charges 120
Interest to vendor 1000
Total 71,10071,100
Prepare the final accounts for the year ending December 31, 2008, considering
the following additional details:
Stock at end Rs.14,000
Bad debts Rs.200 (including Rs.50 on debtors taken over from vendor) to be
written off.
Sales above include sales up to april, 1, 2008, Rs.7500.
Provide for doubtful debts.Rs.250
Depreciate Buildings 5% and cycles 20%
4. A Ltd. Was registered with an authorized capital of Rs.6,00,000 in equity
shares of Rs.10 each. The following is its trail balance on 31
st
March 2008.
Particulars Debit (Rs.) Credit
(Rs.)
Goodwill 25,000
Cash 750
Bank 39,900
Purchases 185000
Preliminary expenses 5000
Share capital
400000
12% Debentures
300000
P & L A/C (Cr.)
26250
Calls in arrears 7500
Premises 300000
Plant and machineries 330000
Interim Dividend 39250
Sales
415000
Stock (1.4.2007) 75000
Furniture & Fixtures 7200
Sundry Debtors 87000
Wages 84865
General Expenses 6835
Freight and carriage 13115
Salaries 14500
Directors Fees 5725
Bad debts 2110
Debentures interest paid 18000
Bills payable
37000
Sundry creditors
40000
General reserve
25000
Provision for bad debts
3500
Total 12467501246750
Prepare Profit and Loss account, Profit and Loss appropriation A/C and
balancesheet in proper form after making the following adjustments:
Depreciate Plant and machinery by 15%
Write off Rs.500 from preliminary expenses
Provide for 6 months interest on debentures
Leave bad and doubtful debts provision at 5% on sundry debtors
Provide for income tax at 50%
Stock on 31-3-2008 was Rs.95,000
UNIT III - ANALYSIS OF FINANCIAL STATEMENTS 12
Analysis of financial statements: Comparative Statements-Common size statements-Trend analysis ?
Financial ratio analysis, Uses and limitations of Ratio analysis-cash flow (as per Accounting Standard
3) and funds flow statement analysis.
Q.No Unit - III - Part - A ? Question Level Competence
1 What are financial statements? BTL 1
Remember
2 List out various sources and applications of cash. BTL 2
Understand
3 How would you show your understanding of debt equity ratio? BTL 3
Apply
4 List any two objectives of financial statements? BTL 4
Analyze
5 Can you assess the value or importance of funds flow statement? BTL 5
Evaluate
6 Differentiate between cash flow and funds flow statements. BTL 6
Create
7 What does cash flow analysis mean? BTL 1
Remember
8 How would you explain funds flow statement? BTL 2
Understand
9 How the various activities are classified (as per AS-3 revised) while
preparing cash flow statement?
BTL 3
Apply
10 What is meant by Trend analysis? BTL 4
Analyze
11 Can you identify the uses of cash flow statement? BTL 5
Evaluate
12 What is the difference between current ratio and liquid ratio BTL 6
Create
13 Can you recall the scope & significance of Ratio analysis? BTL 1
Remember
14 Outline the scope of Common size statements. BTL 2
Understand
15 How would you show your understanding of Cash inflow and cash
outflow?
BTL 3
Apply
16
Calculate Debtors Turnover Ratio from the following:
Total Sales 2,00,000
Cash Sales 40,000
Opening debtors 35,000
Closing Debtors 45,000
BTL 4
Analyze
17 Define Current ratio. BTL 1
Remember
18 What is the meaning of ?Funds from operations?? BTL 2
Understand
19 What are the benefits of schedule of changes in working capital? BTL 1
Remember
20 Can you list the types of working capital. BTL 1
Remember
Q.No Unit - III - Part - B ? Question Level
Competence
1
i) What are the essential attributes of financial statements ? importance and
limitations of it? (7 marks)
ii) Current Ratio is 3:5. Working capital is Rs.9,00,000. How would you show
current assets and current liabilities. (6 marks)
BTL 1
Remember
2
i) Explain the various tools and techniques of financial statements. (7 marks)
ii) Shine Limited has a current ratio 4.5:1 and quick ratio 3:1; if the stock is
36,000. Show current liabilities and current assets. (6 marks)
BTL 2
Understand
3 Define Ratio Analysis; List the advantages and Disadvantages of it. BTL 3
Apply
4 Discuss briefly the various methods of classification or types of Ratios. BTL 4
Analyze
Show the balance sheet of the concern from the following details: Evaluate
BTL 5 5
The gross profit was Rs.60,000 closing stock was Rs.5000 in excess of the opening
stock.
Stock velocity 6
Capital turnover ratio 2
Fixed assets turnover ratio 4
Gross profit ratio 20%
Debt collection period 2 months
Creditors payment period 73 days
6 Evaluate the specimen of Comparative Statements-Common size
statements.
BTL 6
Create
7 i) Prepare common size statement from the following.
Particular 2017 2018
Sales 30,00,000 35,00,000
Cost of production 15,50,000 17,00,000
Administrative expense 5,00,000 6,50,000
Selling expense 2,00,000 2,30,000
Interest 3,50,000 3,70,000
Divided received
(income)
2,50,000 2,00,000
iii)Prepare a comparative statement from the following.
Particuluar 2017 2018
Sales 25,00,000 30,00,000
Cost of goods sold 14,00,000 15,50,000
Operation expense :
Administrative expenses
Selling expenses
3,50,000
2,70,000
2,90,000
3,60,000
Non operation expenses:
Interest
Income tax
1,60,000
1,70,000
1,40,000
3,30,000
BTL 1
Remember
8 Explain the terms funds, funds flow and funds flow statement, List the advantages
and Disadvantages of it.
BTL 2
Understand
Identify the preparation of schedule of changes in working capital and Adjusted
Profit and Loss Account.
Explain terms operating activities, inventory activities, financing activities.
BTL 3
Apply
9
10
i) Analyze the procedure for the preparation of funds flow statement.
ii) The summarized balance sheet of KLtd as on 31.3.2015 nad 31.5.2016 are
as follows
Analyze
Liabilities 2017 2018 Assets 2017 2018
Rs Rs Rs Rs
Share capital 10000 15000 Fixed assets 10000 20000
P/L a/c 4000 6000 Current
assets
13000 14500
Provision for tax 2000 3000
Proposed
dividend
1000 1500
Sundry creditor 4000 6000
Outstanding
expenses
2000 3000
Total 23000 34500Total 2300034500
i) Tax paid during the year 2018 Rs 2500.
ii) Dividend paid during 2018 Rs 1000.
Prepare a statement of sources and applications of funds, showing changes in
the working capital.
11
How would you describe funds flow statement from the following figures.
BTL 1
Remember
Liabilities 31-12-
2001
31-12-
2002
Assets 31-12-
2001
31-12-
2002
Creditors 319000 365000 Cash 130000 40000
------ 200000 Debtors 100000 Provision
for
dividend
160000
Long term
loan
-------- 535000 Stock 235000 255000
Equity
capital
3600000 4000000 Land and
Buildings
540000 1020000
Surplus 100000 129000 Plant and
Machinery
2804000 3544000
Furniture 210000 210000
Total 4019000 5229000 Total 4019000 5229000
12
Show the funds from operation and cash from operation from the following
balance sheets of subha Ltd?
BTL 2
Understand
Particulars 1997 (Rs.) 1998 (Rs.)
Equity share capital 400000 400000
Reserves and surplus 282000 346000
Depreciation Reserve 20000 28000
Secured loans 40000 60000
Creditors for goods 129000106000
Outstanding expenses 17000 3000
Total 888000943000
Plant and Equipment (Cost) 570000 600000
Inventories 196000226000
Debtors 7900057000
Cash at Bank 4300060000
Total 888000943000
13
Analyze and prepare the cash flow statement. A summary of the financial
position of Mr.x for the year 1996 and 1997 is given as follows:
There were no drawings or sale of fixed assets during the year.
BTL 4
Analyze
Liabilities 1996 1997 Assets 1996 1997
Capital 70000 83000 cash 7000 13000
Creditors 10000 12000 Debtors 20000 18000
Stock 40000 52000
Fixed 13000 12000
assets
Total 80000 95000 Total 80000 95000
14
How would you describe funds flow statement for the year ended 31
st
December
2001 from the following particulars?
BTL 1
Remember
Particulars Rs.
Net profit before writing off goodwill 21500
Depreciation written off on fixed assets 3500
Goodwill written off from profits 5000
Dividends paid 7000
Shares issued for cash 10000
Purchase of machinery 20000
Increase in working capital 8000
Q.No Unit - III - Part - C ? Questions
1
Prepare common size statement from the following.
Particular 2017 2018
Assets
Cash 2,70,000 2,90,000
Debtors 1,70,000 1,50,000
Stock 1,20,000 1,00,000
Outstanding Income 30,000 20,000
Prepaid Expenses 10,000 30,000
Fixed assets 11,00,000 14,10,000
17,00,000 20,00,000
Liabilities
Creditors 1,40,000 1,50,000
Bills payable 60,000 40,000
Long term loan 5,00,000 6,10,000
Capital 10,00,000 12,00,000
17,00,000 20,00,000
2 From the balance sheets of ABC ltd., make out :
i. A statement of changes in the working capital
ii. A funds flow statement
Balance Sheet
Following is the additional information available :
1. Depreciation of Rs. 10,000 and Rs. 20,000 have been charged on plant and land and
buildings respectively in the year 2000.
2. An interim dividend of Rs. 20,000 has been paid in the year 2000.
3. Income tax of Rs. 35,000 has been paid in the year 2000.
3 Following are the balance sheets of Krishna Ltd Jaipur, for the year 2008 and 2009.
Liabilities 31.03.1999 31.03.2000 Assets 31.03.1999 31.03.2000
Eq. Share 3,00,000 4,00,000 Goodwill 1,15,000 90,000
Capital
2,00,000 1,70,000 8% 1,50,000 1,00,000 Land and
Building redeemable
pref. S.
Capital
General 40,000 70,000 Plant 80,000 2,00,000
reserve
P/L a/c 30,000 48,000 Debtors 1,60,000 2,00,000
Proposed 42,000 50,000 Stock 77,000 1,09,000
dividends
Creditors 55,000 83,000 Bills 20,000 30,000
receivable
Bills payable 20,000 16,000 Cash in 15,000 10,000
hand
Provision for 40,000 50,000 Cash at 10,000 8,000
taxation bank
6,77,000 8,17,000 6,77,000 8,17,000
Liabilities 31.03.2008 31.03.2009 Assets 31.03.2008 31.03.2009
Eq. Share
Capital
3,00,000 3,50,000 Fixed Assets
(Net)
5,10,000 6,20,000
15% pref. S.
Capital
2,00,000 1,00,000 Investments 30,000 80,000
15%
Debentures
1,00,000 2.00,000 Current Assets2,00,000 3,05,000
Reserves &
Surplus
1,10,000 2,70,000 Cash ?in-hand 40,000 70,000
Current
Liabilities
80,000 1,60,000 Discount on
Issue of
Debentures
10,000 5,000
7,90,000 10,80,000 7,90,000 10,80,000
Additional Information :
i. A machine with a book value of Rs. 40,000 was sold for Rs. 25,000.
ii. 15% preference shares were redeemed at a premium of 15% on 31.3.09 for Rs. 1, 00,000.
iii. Dividend on equity shares @ 15% was paid for the year 2008 during 2009.
iv. Depreciation charged during 2009 was Rs. 60,000.
You are asked to prepare a Cash Flow as per AS -3 (revised).
4 Describe the procedure for preparation of cash flow statement in details.
UNIT IV COST ACCOUNTING & BUDGETARY CONTROL 12
Cost Accounts - Classification of manufacturing costs - Accounting for manufacturing costs. Cost
Accounting Systems -Marginal costing including Exploring new markets and Make or Buy decisions ?
Budget - Budgetary Control - Standard cost system & Variance Analysis.
Q.No Unit - IV - Part - A ? Questions Level
Competence
1 What is Zero based budgeting? BTL 1
Remember
2 Compare ABC and traditional costing approach. BTL 2
Understand
3 How do you show your understanding on the concept ?Break Even Analysis?? BTL 3
Apply
4 Classify the elements of cost. BTL 4
Analyze
5 Discuss the concept of Break Even Point. BTL 5
Evaluate
6 Interpret the features of marginal costing. BTL 6
Create
7 Define cost accounting. BTL 1
Remember
8 Summarize the functions of cost accounting. BTL 2
Understand
9 Identify the essentials of good budgetary control system. BTL 3
Apply
Classify the types of budget. 10 BTL 4
Analyze
11 What conclusions can you draw from Margin of Safety and CVP analysis? BTL 5
Evaluate
12 Justify the usage of cost sheet. BTL 6
Create
13
Remember
BTL 1 What is Make or Buy decisions?
14 Compare Variance and Idle Time Variance. BTL 2
Understand
15 BTL 3 How would you show your understanding on Marginal costing? Apply
Conclude your understanding on budgetary control. 16 BTL 4
Analyze
BTL 1
Remember
17 What is meant by allocation and absorption of overheads?
Differentiate between budgetary control and standard costing. 18 BTL 2
Understand
19 How would you describe fixed overheads? BTL 1
Remember
Remember
20 BTL 1 Define budget?
PART- B
S.NO QUESTIONS
Level
Competence
1
Define Cost Accounting. Write in detail about objectives, functions of Cost Accounting
and how is it useful to the ?
Level 1 Remembering
2
Explain a company working at 50% capacity manufactures 10,000 units of a
product. At 50% capacity the product cost is Rs. 180 & sale price Rs.200, the
breakup of the cost is as below
At 60% working raw material cost goes up by 2% & sales price falls by 2% at 80%
working the raw material cost increases by 5% and sale price decreases by same
percent. i.e. 5%. Prepare a statement to show profitability at 60% and 80% Capacity
Level 2 Understanding
3
How do you show your understanding on the concept of Classification of
manufacturing costs & Accounting for manufacturing costs in detail?
Level 3 Applying
Cost per unit Particulars
100 Material
30 Wages
Factory overheads 30(40%fixed)
Administration overheads 20(50% fixed)
FirstRanker.com - FirstRanker's Choice
(An
Kattanku lathur ?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation ? 2019
Academic Year 2019 - 2020
Prepared by
Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J ? Asst. Professor (OG) / MBA
?
DEPARTMENT OF MANAGEMENT STUDIES
1915103 ? ACCOUNTING FOR MANAGEMENT
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:
BTL 1
Remember
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
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 31
st
December 2015. Prepare Final
accounts as on the date.
BTL 4
Analyze
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
Premium
300
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
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:
BTL 6
Create
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
07.01.2015 Sold goods to Hari 150
08.01.2015 Commission received in cash 200
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)
iii) 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:
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.
BTL 4
Analyze
14.
i) How would you describe the final Accounts for the year ended
on 31
st
march 1994? The following balances were extracted from
the books of Prasad on 31
st
March 1994.
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 overdraft1570
Salaries 850 Sales 14690
Travelling expenses 300 Bills payable 1350
Cash 210
Stock 2450
Discount allowed 40
Drawings 600
TOTAL 27460 TOTAL 27460
BTL 1
Details Rs. Details Rs.
Capital 50,000 Creditors 5,000 Remember
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 31
st
March 1994 was valued at Rs.47,000.
Q.No Unit -I -Part -C ?Questions
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 31
st
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 17140001714000
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 31
st
2015 and a balance sheet as on that date:
Adjustments Required:
Stock on 31-12-2015 Rs.4900
Salaries Unpaid Rs.300
Rent paid in advance Rs.200
Insurance prepaid Rs.90
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 2000
Stock 1-1-2016 5200
Debtors 2500
Creditors 1,000
TOTAL 66,000 66,000
UNIT II ? COMPANY ACCOUNTS 12
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 of the company?
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 1
st
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
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
The total turnover for the year ending December 31,2016 was Rs
5,00,000 divided into Rs 1,50,000 for the period upto may 1, 2016
and Rs 3,50,000 for the remaining period. Prepare the profit and
loss account and ascertain the ?Profit prior to? and after
incorporation.
BTL 1
Remember
Dr Cr
Particular Rs Particular Rs
To rent & taxes 12,000 By trading 1,55,000
account
To insurance 3,000
To EB 2,400
To salaries 36,000
To directors fee 3,000
To auditors fee 1,600
To commission 6,000
To advertisement 4,000
To discount 3,500
To office expenses 7,500
To carriage 3,000
To bank charges 1,500
To Preliminary expenses 6,500
To bad debts 2,000
To interest on loan 3,000
To net profit 60,000
1,55,000 1,55,000
Q.No. Unit - II - Part - C ? Question
1. A Ltd. Offered 100,000 equity shares of nominal value of Rs.10 each for public
subscription at Rs.12. The amount payable on the shares were shares were on
application Rs.450; on allotment (including premium)Rs.4.50; on first and final
call Rs.3.00 The actual subscription was only for 90,000 shares. All money
payable by shareholders was received from sudhakar who had taken 1,000
shares but failed to pay the final call. His shares were forfeited and reissued to
Prabhakar at Rs.6 each. Show journal entries in the books of the company in
respect of the above (including cash transactions).
2. Mohan company Ltd., was incorporated on 30
th
June 2005 to take over the
of K.Mohan as from 1
st
January 2015. The financial accounts for the
year ended 31
st
December 2015.
Particulars Rs.Rs.
Sales:
January to June
July to December
Total
120,000
180,000
3,00,000
Less: Purchases:
January to June
75000
July to December 120,000
195,000
Gross Profit
1,05,000
Less: Salaries 15000
Selling expenses 3000
Depreciation 1500
Directors remuneration 750
Debenture Interest 90
Administration Expenses(Rent, Rates etc.) 4500 24840
Balance
80,160
You are request to prepare a statement apportioning the balance of profit
between the periods prior to after incorporation and show the profit and loss
appropriation account for the year ended 31
st
December 2015.
3. Poornima Ltd., incorporated in April 1, 2008, with a capital of Rs.50,000 in
equity shares of Rs.10 each took over the running of poornima as
from January 1, 2008. The purchase price Rs.20,000 was settled on July 1,
2008, together with interest at 10% per annum by fully paid shares for
Rs.17500 and the balance by cheque.
To company?s Trial Balance as on December 31, 2008, was as below:
Particulars Rs. Rs.
Cash and Bank balances (Cash Rs. 180) 4,860
Share capital
22,500
Land and Buildings 8,000
Fixtures 750
Cycles 1000
Salaries 1200
Purchases 48500
Sales
45000
Debtors and Creditors 4500 3000
Rent from tenants
600
Rent, Rates and taxes 300
Building upkeep 150
Director?s fees 720
Sundry charges 120
Interest to vendor 1000
Total 71,10071,100
Prepare the final accounts for the year ending December 31, 2008, considering
the following additional details:
Stock at end Rs.14,000
Bad debts Rs.200 (including Rs.50 on debtors taken over from vendor) to be
written off.
Sales above include sales up to april, 1, 2008, Rs.7500.
Provide for doubtful debts.Rs.250
Depreciate Buildings 5% and cycles 20%
4. A Ltd. Was registered with an authorized capital of Rs.6,00,000 in equity
shares of Rs.10 each. The following is its trail balance on 31
st
March 2008.
Particulars Debit (Rs.) Credit
(Rs.)
Goodwill 25,000
Cash 750
Bank 39,900
Purchases 185000
Preliminary expenses 5000
Share capital
400000
12% Debentures
300000
P & L A/C (Cr.)
26250
Calls in arrears 7500
Premises 300000
Plant and machineries 330000
Interim Dividend 39250
Sales
415000
Stock (1.4.2007) 75000
Furniture & Fixtures 7200
Sundry Debtors 87000
Wages 84865
General Expenses 6835
Freight and carriage 13115
Salaries 14500
Directors Fees 5725
Bad debts 2110
Debentures interest paid 18000
Bills payable
37000
Sundry creditors
40000
General reserve
25000
Provision for bad debts
3500
Total 12467501246750
Prepare Profit and Loss account, Profit and Loss appropriation A/C and
balancesheet in proper form after making the following adjustments:
Depreciate Plant and machinery by 15%
Write off Rs.500 from preliminary expenses
Provide for 6 months interest on debentures
Leave bad and doubtful debts provision at 5% on sundry debtors
Provide for income tax at 50%
Stock on 31-3-2008 was Rs.95,000
UNIT III - ANALYSIS OF FINANCIAL STATEMENTS 12
Analysis of financial statements: Comparative Statements-Common size statements-Trend analysis ?
Financial ratio analysis, Uses and limitations of Ratio analysis-cash flow (as per Accounting Standard
3) and funds flow statement analysis.
Q.No Unit - III - Part - A ? Question Level Competence
1 What are financial statements? BTL 1
Remember
2 List out various sources and applications of cash. BTL 2
Understand
3 How would you show your understanding of debt equity ratio? BTL 3
Apply
4 List any two objectives of financial statements? BTL 4
Analyze
5 Can you assess the value or importance of funds flow statement? BTL 5
Evaluate
6 Differentiate between cash flow and funds flow statements. BTL 6
Create
7 What does cash flow analysis mean? BTL 1
Remember
8 How would you explain funds flow statement? BTL 2
Understand
9 How the various activities are classified (as per AS-3 revised) while
preparing cash flow statement?
BTL 3
Apply
10 What is meant by Trend analysis? BTL 4
Analyze
11 Can you identify the uses of cash flow statement? BTL 5
Evaluate
12 What is the difference between current ratio and liquid ratio BTL 6
Create
13 Can you recall the scope & significance of Ratio analysis? BTL 1
Remember
14 Outline the scope of Common size statements. BTL 2
Understand
15 How would you show your understanding of Cash inflow and cash
outflow?
BTL 3
Apply
16
Calculate Debtors Turnover Ratio from the following:
Total Sales 2,00,000
Cash Sales 40,000
Opening debtors 35,000
Closing Debtors 45,000
BTL 4
Analyze
17 Define Current ratio. BTL 1
Remember
18 What is the meaning of ?Funds from operations?? BTL 2
Understand
19 What are the benefits of schedule of changes in working capital? BTL 1
Remember
20 Can you list the types of working capital. BTL 1
Remember
Q.No Unit - III - Part - B ? Question Level
Competence
1
i) What are the essential attributes of financial statements ? importance and
limitations of it? (7 marks)
ii) Current Ratio is 3:5. Working capital is Rs.9,00,000. How would you show
current assets and current liabilities. (6 marks)
BTL 1
Remember
2
i) Explain the various tools and techniques of financial statements. (7 marks)
ii) Shine Limited has a current ratio 4.5:1 and quick ratio 3:1; if the stock is
36,000. Show current liabilities and current assets. (6 marks)
BTL 2
Understand
3 Define Ratio Analysis; List the advantages and Disadvantages of it. BTL 3
Apply
4 Discuss briefly the various methods of classification or types of Ratios. BTL 4
Analyze
Show the balance sheet of the concern from the following details: Evaluate
BTL 5 5
The gross profit was Rs.60,000 closing stock was Rs.5000 in excess of the opening
stock.
Stock velocity 6
Capital turnover ratio 2
Fixed assets turnover ratio 4
Gross profit ratio 20%
Debt collection period 2 months
Creditors payment period 73 days
6 Evaluate the specimen of Comparative Statements-Common size
statements.
BTL 6
Create
7 i) Prepare common size statement from the following.
Particular 2017 2018
Sales 30,00,000 35,00,000
Cost of production 15,50,000 17,00,000
Administrative expense 5,00,000 6,50,000
Selling expense 2,00,000 2,30,000
Interest 3,50,000 3,70,000
Divided received
(income)
2,50,000 2,00,000
iii)Prepare a comparative statement from the following.
Particuluar 2017 2018
Sales 25,00,000 30,00,000
Cost of goods sold 14,00,000 15,50,000
Operation expense :
Administrative expenses
Selling expenses
3,50,000
2,70,000
2,90,000
3,60,000
Non operation expenses:
Interest
Income tax
1,60,000
1,70,000
1,40,000
3,30,000
BTL 1
Remember
8 Explain the terms funds, funds flow and funds flow statement, List the advantages
and Disadvantages of it.
BTL 2
Understand
Identify the preparation of schedule of changes in working capital and Adjusted
Profit and Loss Account.
Explain terms operating activities, inventory activities, financing activities.
BTL 3
Apply
9
10
i) Analyze the procedure for the preparation of funds flow statement.
ii) The summarized balance sheet of KLtd as on 31.3.2015 nad 31.5.2016 are
as follows
Analyze
Liabilities 2017 2018 Assets 2017 2018
Rs Rs Rs Rs
Share capital 10000 15000 Fixed assets 10000 20000
P/L a/c 4000 6000 Current
assets
13000 14500
Provision for tax 2000 3000
Proposed
dividend
1000 1500
Sundry creditor 4000 6000
Outstanding
expenses
2000 3000
Total 23000 34500Total 2300034500
i) Tax paid during the year 2018 Rs 2500.
ii) Dividend paid during 2018 Rs 1000.
Prepare a statement of sources and applications of funds, showing changes in
the working capital.
11
How would you describe funds flow statement from the following figures.
BTL 1
Remember
Liabilities 31-12-
2001
31-12-
2002
Assets 31-12-
2001
31-12-
2002
Creditors 319000 365000 Cash 130000 40000
------ 200000 Debtors 100000 Provision
for
dividend
160000
Long term
loan
-------- 535000 Stock 235000 255000
Equity
capital
3600000 4000000 Land and
Buildings
540000 1020000
Surplus 100000 129000 Plant and
Machinery
2804000 3544000
Furniture 210000 210000
Total 4019000 5229000 Total 4019000 5229000
12
Show the funds from operation and cash from operation from the following
balance sheets of subha Ltd?
BTL 2
Understand
Particulars 1997 (Rs.) 1998 (Rs.)
Equity share capital 400000 400000
Reserves and surplus 282000 346000
Depreciation Reserve 20000 28000
Secured loans 40000 60000
Creditors for goods 129000106000
Outstanding expenses 17000 3000
Total 888000943000
Plant and Equipment (Cost) 570000 600000
Inventories 196000226000
Debtors 7900057000
Cash at Bank 4300060000
Total 888000943000
13
Analyze and prepare the cash flow statement. A summary of the financial
position of Mr.x for the year 1996 and 1997 is given as follows:
There were no drawings or sale of fixed assets during the year.
BTL 4
Analyze
Liabilities 1996 1997 Assets 1996 1997
Capital 70000 83000 cash 7000 13000
Creditors 10000 12000 Debtors 20000 18000
Stock 40000 52000
Fixed 13000 12000
assets
Total 80000 95000 Total 80000 95000
14
How would you describe funds flow statement for the year ended 31
st
December
2001 from the following particulars?
BTL 1
Remember
Particulars Rs.
Net profit before writing off goodwill 21500
Depreciation written off on fixed assets 3500
Goodwill written off from profits 5000
Dividends paid 7000
Shares issued for cash 10000
Purchase of machinery 20000
Increase in working capital 8000
Q.No Unit - III - Part - C ? Questions
1
Prepare common size statement from the following.
Particular 2017 2018
Assets
Cash 2,70,000 2,90,000
Debtors 1,70,000 1,50,000
Stock 1,20,000 1,00,000
Outstanding Income 30,000 20,000
Prepaid Expenses 10,000 30,000
Fixed assets 11,00,000 14,10,000
17,00,000 20,00,000
Liabilities
Creditors 1,40,000 1,50,000
Bills payable 60,000 40,000
Long term loan 5,00,000 6,10,000
Capital 10,00,000 12,00,000
17,00,000 20,00,000
2 From the balance sheets of ABC ltd., make out :
i. A statement of changes in the working capital
ii. A funds flow statement
Balance Sheet
Following is the additional information available :
1. Depreciation of Rs. 10,000 and Rs. 20,000 have been charged on plant and land and
buildings respectively in the year 2000.
2. An interim dividend of Rs. 20,000 has been paid in the year 2000.
3. Income tax of Rs. 35,000 has been paid in the year 2000.
3 Following are the balance sheets of Krishna Ltd Jaipur, for the year 2008 and 2009.
Liabilities 31.03.1999 31.03.2000 Assets 31.03.1999 31.03.2000
Eq. Share 3,00,000 4,00,000 Goodwill 1,15,000 90,000
Capital
2,00,000 1,70,000 8% 1,50,000 1,00,000 Land and
Building redeemable
pref. S.
Capital
General 40,000 70,000 Plant 80,000 2,00,000
reserve
P/L a/c 30,000 48,000 Debtors 1,60,000 2,00,000
Proposed 42,000 50,000 Stock 77,000 1,09,000
dividends
Creditors 55,000 83,000 Bills 20,000 30,000
receivable
Bills payable 20,000 16,000 Cash in 15,000 10,000
hand
Provision for 40,000 50,000 Cash at 10,000 8,000
taxation bank
6,77,000 8,17,000 6,77,000 8,17,000
Liabilities 31.03.2008 31.03.2009 Assets 31.03.2008 31.03.2009
Eq. Share
Capital
3,00,000 3,50,000 Fixed Assets
(Net)
5,10,000 6,20,000
15% pref. S.
Capital
2,00,000 1,00,000 Investments 30,000 80,000
15%
Debentures
1,00,000 2.00,000 Current Assets2,00,000 3,05,000
Reserves &
Surplus
1,10,000 2,70,000 Cash ?in-hand 40,000 70,000
Current
Liabilities
80,000 1,60,000 Discount on
Issue of
Debentures
10,000 5,000
7,90,000 10,80,000 7,90,000 10,80,000
Additional Information :
i. A machine with a book value of Rs. 40,000 was sold for Rs. 25,000.
ii. 15% preference shares were redeemed at a premium of 15% on 31.3.09 for Rs. 1, 00,000.
iii. Dividend on equity shares @ 15% was paid for the year 2008 during 2009.
iv. Depreciation charged during 2009 was Rs. 60,000.
You are asked to prepare a Cash Flow as per AS -3 (revised).
4 Describe the procedure for preparation of cash flow statement in details.
UNIT IV COST ACCOUNTING & BUDGETARY CONTROL 12
Cost Accounts - Classification of manufacturing costs - Accounting for manufacturing costs. Cost
Accounting Systems -Marginal costing including Exploring new markets and Make or Buy decisions ?
Budget - Budgetary Control - Standard cost system & Variance Analysis.
Q.No Unit - IV - Part - A ? Questions Level
Competence
1 What is Zero based budgeting? BTL 1
Remember
2 Compare ABC and traditional costing approach. BTL 2
Understand
3 How do you show your understanding on the concept ?Break Even Analysis?? BTL 3
Apply
4 Classify the elements of cost. BTL 4
Analyze
5 Discuss the concept of Break Even Point. BTL 5
Evaluate
6 Interpret the features of marginal costing. BTL 6
Create
7 Define cost accounting. BTL 1
Remember
8 Summarize the functions of cost accounting. BTL 2
Understand
9 Identify the essentials of good budgetary control system. BTL 3
Apply
Classify the types of budget. 10 BTL 4
Analyze
11 What conclusions can you draw from Margin of Safety and CVP analysis? BTL 5
Evaluate
12 Justify the usage of cost sheet. BTL 6
Create
13
Remember
BTL 1 What is Make or Buy decisions?
14 Compare Variance and Idle Time Variance. BTL 2
Understand
15 BTL 3 How would you show your understanding on Marginal costing? Apply
Conclude your understanding on budgetary control. 16 BTL 4
Analyze
BTL 1
Remember
17 What is meant by allocation and absorption of overheads?
Differentiate between budgetary control and standard costing. 18 BTL 2
Understand
19 How would you describe fixed overheads? BTL 1
Remember
Remember
20 BTL 1 Define budget?
PART- B
S.NO QUESTIONS
Level
Competence
1
Define Cost Accounting. Write in detail about objectives, functions of Cost Accounting
and how is it useful to the ?
Level 1 Remembering
2
Explain a company working at 50% capacity manufactures 10,000 units of a
product. At 50% capacity the product cost is Rs. 180 & sale price Rs.200, the
breakup of the cost is as below
At 60% working raw material cost goes up by 2% & sales price falls by 2% at 80%
working the raw material cost increases by 5% and sale price decreases by same
percent. i.e. 5%. Prepare a statement to show profitability at 60% and 80% Capacity
Level 2 Understanding
3
How do you show your understanding on the concept of Classification of
manufacturing costs & Accounting for manufacturing costs in detail?
Level 3 Applying
Cost per unit Particulars
100 Material
30 Wages
Factory overheads 30(40%fixed)
Administration overheads 20(50% fixed)
4
From the following data calculate break event point.
Particulars Rs.
Selling price per unit 20
Direct material cost per unit 8
Direct labour cost per unit 2
Direct expenses per unit 2
Overheads per unit 3
Fixed overheads (total) 20,000
If sales are 20% above the break-even point, determine the net profit.
Analyze how Break-even chart is constructed?
Level 4 Analysing
5
i) Describe the various methods of cost accounting. Level 5
Evaluating
ii) Explain Advantages and Disadvantages of cost accounting.
6
Justify your comments on the Statement. ?Cost Accounting is an essential tool of
Management?. Interpret the term ?Variance? under standard costing, and discuss its
significance.
Level 6 Creating
7
How would you explain a flexible budget for the half year and forecast process at 60%,
75%, 90% & 100% respectively.
Particulars Rs. In
lakhs
Fixed expenses
Wages 16.8
Rent, taxes, etc. 11.2
Depreciation 14.0
Administrative expenses 17.8 59.8
Semi variable expenses(@ 50%
capacity)
Repair & maintenance 5.0
Indirect labour 19.8
Sales department salaries 5.8
Sundry administration expenses 5.2 35.8
Variable expenses (@ 50%
capacity)
Material 48.0
Labour 51.2
Other expenses 7.6 106.8
Assume that fixed expenses remain constant at all levels, semi variable expenses
remain constant between 40% and 65%, 10% increase between 65% and 85% and 20%
increase between 85% and 100%. Sales at various levels are as under 60% capacity
Rs.200 lakhs, 75% capacity Rs. 240 lakhs. 90% capacity Rs.300 lakhs. 100% capacity
Rs.340 lakhs.
Level 1 Remembering
8
(i)Will you interpret the materials mix variance from the following? (7 marks)
Material Actual Standard
A 90 units at Rs.12 each 100 units at Rs.12
each
B 60 units at Rs.15 each 50 units at Rs. 16
each.
Level 2 Understanding
(ii) Summarize the advantages and limitations of Zero Base Budgeting. (6 marks)
FirstRanker.com - FirstRanker's Choice
(An
Kattanku lathur ?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation ? 2019
Academic Year 2019 - 2020
Prepared by
Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J ? Asst. Professor (OG) / MBA
?
DEPARTMENT OF MANAGEMENT STUDIES
1915103 ? ACCOUNTING FOR MANAGEMENT
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:
BTL 1
Remember
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
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 31
st
December 2015. Prepare Final
accounts as on the date.
BTL 4
Analyze
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
Premium
300
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
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:
BTL 6
Create
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
07.01.2015 Sold goods to Hari 150
08.01.2015 Commission received in cash 200
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)
iii) 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:
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.
BTL 4
Analyze
14.
i) How would you describe the final Accounts for the year ended
on 31
st
march 1994? The following balances were extracted from
the books of Prasad on 31
st
March 1994.
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 overdraft1570
Salaries 850 Sales 14690
Travelling expenses 300 Bills payable 1350
Cash 210
Stock 2450
Discount allowed 40
Drawings 600
TOTAL 27460 TOTAL 27460
BTL 1
Details Rs. Details Rs.
Capital 50,000 Creditors 5,000 Remember
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 31
st
March 1994 was valued at Rs.47,000.
Q.No Unit -I -Part -C ?Questions
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 31
st
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 17140001714000
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 31
st
2015 and a balance sheet as on that date:
Adjustments Required:
Stock on 31-12-2015 Rs.4900
Salaries Unpaid Rs.300
Rent paid in advance Rs.200
Insurance prepaid Rs.90
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 2000
Stock 1-1-2016 5200
Debtors 2500
Creditors 1,000
TOTAL 66,000 66,000
UNIT II ? COMPANY ACCOUNTS 12
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 of the company?
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 1
st
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
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
The total turnover for the year ending December 31,2016 was Rs
5,00,000 divided into Rs 1,50,000 for the period upto may 1, 2016
and Rs 3,50,000 for the remaining period. Prepare the profit and
loss account and ascertain the ?Profit prior to? and after
incorporation.
BTL 1
Remember
Dr Cr
Particular Rs Particular Rs
To rent & taxes 12,000 By trading 1,55,000
account
To insurance 3,000
To EB 2,400
To salaries 36,000
To directors fee 3,000
To auditors fee 1,600
To commission 6,000
To advertisement 4,000
To discount 3,500
To office expenses 7,500
To carriage 3,000
To bank charges 1,500
To Preliminary expenses 6,500
To bad debts 2,000
To interest on loan 3,000
To net profit 60,000
1,55,000 1,55,000
Q.No. Unit - II - Part - C ? Question
1. A Ltd. Offered 100,000 equity shares of nominal value of Rs.10 each for public
subscription at Rs.12. The amount payable on the shares were shares were on
application Rs.450; on allotment (including premium)Rs.4.50; on first and final
call Rs.3.00 The actual subscription was only for 90,000 shares. All money
payable by shareholders was received from sudhakar who had taken 1,000
shares but failed to pay the final call. His shares were forfeited and reissued to
Prabhakar at Rs.6 each. Show journal entries in the books of the company in
respect of the above (including cash transactions).
2. Mohan company Ltd., was incorporated on 30
th
June 2005 to take over the
of K.Mohan as from 1
st
January 2015. The financial accounts for the
year ended 31
st
December 2015.
Particulars Rs.Rs.
Sales:
January to June
July to December
Total
120,000
180,000
3,00,000
Less: Purchases:
January to June
75000
July to December 120,000
195,000
Gross Profit
1,05,000
Less: Salaries 15000
Selling expenses 3000
Depreciation 1500
Directors remuneration 750
Debenture Interest 90
Administration Expenses(Rent, Rates etc.) 4500 24840
Balance
80,160
You are request to prepare a statement apportioning the balance of profit
between the periods prior to after incorporation and show the profit and loss
appropriation account for the year ended 31
st
December 2015.
3. Poornima Ltd., incorporated in April 1, 2008, with a capital of Rs.50,000 in
equity shares of Rs.10 each took over the running of poornima as
from January 1, 2008. The purchase price Rs.20,000 was settled on July 1,
2008, together with interest at 10% per annum by fully paid shares for
Rs.17500 and the balance by cheque.
To company?s Trial Balance as on December 31, 2008, was as below:
Particulars Rs. Rs.
Cash and Bank balances (Cash Rs. 180) 4,860
Share capital
22,500
Land and Buildings 8,000
Fixtures 750
Cycles 1000
Salaries 1200
Purchases 48500
Sales
45000
Debtors and Creditors 4500 3000
Rent from tenants
600
Rent, Rates and taxes 300
Building upkeep 150
Director?s fees 720
Sundry charges 120
Interest to vendor 1000
Total 71,10071,100
Prepare the final accounts for the year ending December 31, 2008, considering
the following additional details:
Stock at end Rs.14,000
Bad debts Rs.200 (including Rs.50 on debtors taken over from vendor) to be
written off.
Sales above include sales up to april, 1, 2008, Rs.7500.
Provide for doubtful debts.Rs.250
Depreciate Buildings 5% and cycles 20%
4. A Ltd. Was registered with an authorized capital of Rs.6,00,000 in equity
shares of Rs.10 each. The following is its trail balance on 31
st
March 2008.
Particulars Debit (Rs.) Credit
(Rs.)
Goodwill 25,000
Cash 750
Bank 39,900
Purchases 185000
Preliminary expenses 5000
Share capital
400000
12% Debentures
300000
P & L A/C (Cr.)
26250
Calls in arrears 7500
Premises 300000
Plant and machineries 330000
Interim Dividend 39250
Sales
415000
Stock (1.4.2007) 75000
Furniture & Fixtures 7200
Sundry Debtors 87000
Wages 84865
General Expenses 6835
Freight and carriage 13115
Salaries 14500
Directors Fees 5725
Bad debts 2110
Debentures interest paid 18000
Bills payable
37000
Sundry creditors
40000
General reserve
25000
Provision for bad debts
3500
Total 12467501246750
Prepare Profit and Loss account, Profit and Loss appropriation A/C and
balancesheet in proper form after making the following adjustments:
Depreciate Plant and machinery by 15%
Write off Rs.500 from preliminary expenses
Provide for 6 months interest on debentures
Leave bad and doubtful debts provision at 5% on sundry debtors
Provide for income tax at 50%
Stock on 31-3-2008 was Rs.95,000
UNIT III - ANALYSIS OF FINANCIAL STATEMENTS 12
Analysis of financial statements: Comparative Statements-Common size statements-Trend analysis ?
Financial ratio analysis, Uses and limitations of Ratio analysis-cash flow (as per Accounting Standard
3) and funds flow statement analysis.
Q.No Unit - III - Part - A ? Question Level Competence
1 What are financial statements? BTL 1
Remember
2 List out various sources and applications of cash. BTL 2
Understand
3 How would you show your understanding of debt equity ratio? BTL 3
Apply
4 List any two objectives of financial statements? BTL 4
Analyze
5 Can you assess the value or importance of funds flow statement? BTL 5
Evaluate
6 Differentiate between cash flow and funds flow statements. BTL 6
Create
7 What does cash flow analysis mean? BTL 1
Remember
8 How would you explain funds flow statement? BTL 2
Understand
9 How the various activities are classified (as per AS-3 revised) while
preparing cash flow statement?
BTL 3
Apply
10 What is meant by Trend analysis? BTL 4
Analyze
11 Can you identify the uses of cash flow statement? BTL 5
Evaluate
12 What is the difference between current ratio and liquid ratio BTL 6
Create
13 Can you recall the scope & significance of Ratio analysis? BTL 1
Remember
14 Outline the scope of Common size statements. BTL 2
Understand
15 How would you show your understanding of Cash inflow and cash
outflow?
BTL 3
Apply
16
Calculate Debtors Turnover Ratio from the following:
Total Sales 2,00,000
Cash Sales 40,000
Opening debtors 35,000
Closing Debtors 45,000
BTL 4
Analyze
17 Define Current ratio. BTL 1
Remember
18 What is the meaning of ?Funds from operations?? BTL 2
Understand
19 What are the benefits of schedule of changes in working capital? BTL 1
Remember
20 Can you list the types of working capital. BTL 1
Remember
Q.No Unit - III - Part - B ? Question Level
Competence
1
i) What are the essential attributes of financial statements ? importance and
limitations of it? (7 marks)
ii) Current Ratio is 3:5. Working capital is Rs.9,00,000. How would you show
current assets and current liabilities. (6 marks)
BTL 1
Remember
2
i) Explain the various tools and techniques of financial statements. (7 marks)
ii) Shine Limited has a current ratio 4.5:1 and quick ratio 3:1; if the stock is
36,000. Show current liabilities and current assets. (6 marks)
BTL 2
Understand
3 Define Ratio Analysis; List the advantages and Disadvantages of it. BTL 3
Apply
4 Discuss briefly the various methods of classification or types of Ratios. BTL 4
Analyze
Show the balance sheet of the concern from the following details: Evaluate
BTL 5 5
The gross profit was Rs.60,000 closing stock was Rs.5000 in excess of the opening
stock.
Stock velocity 6
Capital turnover ratio 2
Fixed assets turnover ratio 4
Gross profit ratio 20%
Debt collection period 2 months
Creditors payment period 73 days
6 Evaluate the specimen of Comparative Statements-Common size
statements.
BTL 6
Create
7 i) Prepare common size statement from the following.
Particular 2017 2018
Sales 30,00,000 35,00,000
Cost of production 15,50,000 17,00,000
Administrative expense 5,00,000 6,50,000
Selling expense 2,00,000 2,30,000
Interest 3,50,000 3,70,000
Divided received
(income)
2,50,000 2,00,000
iii)Prepare a comparative statement from the following.
Particuluar 2017 2018
Sales 25,00,000 30,00,000
Cost of goods sold 14,00,000 15,50,000
Operation expense :
Administrative expenses
Selling expenses
3,50,000
2,70,000
2,90,000
3,60,000
Non operation expenses:
Interest
Income tax
1,60,000
1,70,000
1,40,000
3,30,000
BTL 1
Remember
8 Explain the terms funds, funds flow and funds flow statement, List the advantages
and Disadvantages of it.
BTL 2
Understand
Identify the preparation of schedule of changes in working capital and Adjusted
Profit and Loss Account.
Explain terms operating activities, inventory activities, financing activities.
BTL 3
Apply
9
10
i) Analyze the procedure for the preparation of funds flow statement.
ii) The summarized balance sheet of KLtd as on 31.3.2015 nad 31.5.2016 are
as follows
Analyze
Liabilities 2017 2018 Assets 2017 2018
Rs Rs Rs Rs
Share capital 10000 15000 Fixed assets 10000 20000
P/L a/c 4000 6000 Current
assets
13000 14500
Provision for tax 2000 3000
Proposed
dividend
1000 1500
Sundry creditor 4000 6000
Outstanding
expenses
2000 3000
Total 23000 34500Total 2300034500
i) Tax paid during the year 2018 Rs 2500.
ii) Dividend paid during 2018 Rs 1000.
Prepare a statement of sources and applications of funds, showing changes in
the working capital.
11
How would you describe funds flow statement from the following figures.
BTL 1
Remember
Liabilities 31-12-
2001
31-12-
2002
Assets 31-12-
2001
31-12-
2002
Creditors 319000 365000 Cash 130000 40000
------ 200000 Debtors 100000 Provision
for
dividend
160000
Long term
loan
-------- 535000 Stock 235000 255000
Equity
capital
3600000 4000000 Land and
Buildings
540000 1020000
Surplus 100000 129000 Plant and
Machinery
2804000 3544000
Furniture 210000 210000
Total 4019000 5229000 Total 4019000 5229000
12
Show the funds from operation and cash from operation from the following
balance sheets of subha Ltd?
BTL 2
Understand
Particulars 1997 (Rs.) 1998 (Rs.)
Equity share capital 400000 400000
Reserves and surplus 282000 346000
Depreciation Reserve 20000 28000
Secured loans 40000 60000
Creditors for goods 129000106000
Outstanding expenses 17000 3000
Total 888000943000
Plant and Equipment (Cost) 570000 600000
Inventories 196000226000
Debtors 7900057000
Cash at Bank 4300060000
Total 888000943000
13
Analyze and prepare the cash flow statement. A summary of the financial
position of Mr.x for the year 1996 and 1997 is given as follows:
There were no drawings or sale of fixed assets during the year.
BTL 4
Analyze
Liabilities 1996 1997 Assets 1996 1997
Capital 70000 83000 cash 7000 13000
Creditors 10000 12000 Debtors 20000 18000
Stock 40000 52000
Fixed 13000 12000
assets
Total 80000 95000 Total 80000 95000
14
How would you describe funds flow statement for the year ended 31
st
December
2001 from the following particulars?
BTL 1
Remember
Particulars Rs.
Net profit before writing off goodwill 21500
Depreciation written off on fixed assets 3500
Goodwill written off from profits 5000
Dividends paid 7000
Shares issued for cash 10000
Purchase of machinery 20000
Increase in working capital 8000
Q.No Unit - III - Part - C ? Questions
1
Prepare common size statement from the following.
Particular 2017 2018
Assets
Cash 2,70,000 2,90,000
Debtors 1,70,000 1,50,000
Stock 1,20,000 1,00,000
Outstanding Income 30,000 20,000
Prepaid Expenses 10,000 30,000
Fixed assets 11,00,000 14,10,000
17,00,000 20,00,000
Liabilities
Creditors 1,40,000 1,50,000
Bills payable 60,000 40,000
Long term loan 5,00,000 6,10,000
Capital 10,00,000 12,00,000
17,00,000 20,00,000
2 From the balance sheets of ABC ltd., make out :
i. A statement of changes in the working capital
ii. A funds flow statement
Balance Sheet
Following is the additional information available :
1. Depreciation of Rs. 10,000 and Rs. 20,000 have been charged on plant and land and
buildings respectively in the year 2000.
2. An interim dividend of Rs. 20,000 has been paid in the year 2000.
3. Income tax of Rs. 35,000 has been paid in the year 2000.
3 Following are the balance sheets of Krishna Ltd Jaipur, for the year 2008 and 2009.
Liabilities 31.03.1999 31.03.2000 Assets 31.03.1999 31.03.2000
Eq. Share 3,00,000 4,00,000 Goodwill 1,15,000 90,000
Capital
2,00,000 1,70,000 8% 1,50,000 1,00,000 Land and
Building redeemable
pref. S.
Capital
General 40,000 70,000 Plant 80,000 2,00,000
reserve
P/L a/c 30,000 48,000 Debtors 1,60,000 2,00,000
Proposed 42,000 50,000 Stock 77,000 1,09,000
dividends
Creditors 55,000 83,000 Bills 20,000 30,000
receivable
Bills payable 20,000 16,000 Cash in 15,000 10,000
hand
Provision for 40,000 50,000 Cash at 10,000 8,000
taxation bank
6,77,000 8,17,000 6,77,000 8,17,000
Liabilities 31.03.2008 31.03.2009 Assets 31.03.2008 31.03.2009
Eq. Share
Capital
3,00,000 3,50,000 Fixed Assets
(Net)
5,10,000 6,20,000
15% pref. S.
Capital
2,00,000 1,00,000 Investments 30,000 80,000
15%
Debentures
1,00,000 2.00,000 Current Assets2,00,000 3,05,000
Reserves &
Surplus
1,10,000 2,70,000 Cash ?in-hand 40,000 70,000
Current
Liabilities
80,000 1,60,000 Discount on
Issue of
Debentures
10,000 5,000
7,90,000 10,80,000 7,90,000 10,80,000
Additional Information :
i. A machine with a book value of Rs. 40,000 was sold for Rs. 25,000.
ii. 15% preference shares were redeemed at a premium of 15% on 31.3.09 for Rs. 1, 00,000.
iii. Dividend on equity shares @ 15% was paid for the year 2008 during 2009.
iv. Depreciation charged during 2009 was Rs. 60,000.
You are asked to prepare a Cash Flow as per AS -3 (revised).
4 Describe the procedure for preparation of cash flow statement in details.
UNIT IV COST ACCOUNTING & BUDGETARY CONTROL 12
Cost Accounts - Classification of manufacturing costs - Accounting for manufacturing costs. Cost
Accounting Systems -Marginal costing including Exploring new markets and Make or Buy decisions ?
Budget - Budgetary Control - Standard cost system & Variance Analysis.
Q.No Unit - IV - Part - A ? Questions Level
Competence
1 What is Zero based budgeting? BTL 1
Remember
2 Compare ABC and traditional costing approach. BTL 2
Understand
3 How do you show your understanding on the concept ?Break Even Analysis?? BTL 3
Apply
4 Classify the elements of cost. BTL 4
Analyze
5 Discuss the concept of Break Even Point. BTL 5
Evaluate
6 Interpret the features of marginal costing. BTL 6
Create
7 Define cost accounting. BTL 1
Remember
8 Summarize the functions of cost accounting. BTL 2
Understand
9 Identify the essentials of good budgetary control system. BTL 3
Apply
Classify the types of budget. 10 BTL 4
Analyze
11 What conclusions can you draw from Margin of Safety and CVP analysis? BTL 5
Evaluate
12 Justify the usage of cost sheet. BTL 6
Create
13
Remember
BTL 1 What is Make or Buy decisions?
14 Compare Variance and Idle Time Variance. BTL 2
Understand
15 BTL 3 How would you show your understanding on Marginal costing? Apply
Conclude your understanding on budgetary control. 16 BTL 4
Analyze
BTL 1
Remember
17 What is meant by allocation and absorption of overheads?
Differentiate between budgetary control and standard costing. 18 BTL 2
Understand
19 How would you describe fixed overheads? BTL 1
Remember
Remember
20 BTL 1 Define budget?
PART- B
S.NO QUESTIONS
Level
Competence
1
Define Cost Accounting. Write in detail about objectives, functions of Cost Accounting
and how is it useful to the ?
Level 1 Remembering
2
Explain a company working at 50% capacity manufactures 10,000 units of a
product. At 50% capacity the product cost is Rs. 180 & sale price Rs.200, the
breakup of the cost is as below
At 60% working raw material cost goes up by 2% & sales price falls by 2% at 80%
working the raw material cost increases by 5% and sale price decreases by same
percent. i.e. 5%. Prepare a statement to show profitability at 60% and 80% Capacity
Level 2 Understanding
3
How do you show your understanding on the concept of Classification of
manufacturing costs & Accounting for manufacturing costs in detail?
Level 3 Applying
Cost per unit Particulars
100 Material
30 Wages
Factory overheads 30(40%fixed)
Administration overheads 20(50% fixed)
4
From the following data calculate break event point.
Particulars Rs.
Selling price per unit 20
Direct material cost per unit 8
Direct labour cost per unit 2
Direct expenses per unit 2
Overheads per unit 3
Fixed overheads (total) 20,000
If sales are 20% above the break-even point, determine the net profit.
Analyze how Break-even chart is constructed?
Level 4 Analysing
5
i) Describe the various methods of cost accounting. Level 5
Evaluating
ii) Explain Advantages and Disadvantages of cost accounting.
6
Justify your comments on the Statement. ?Cost Accounting is an essential tool of
Management?. Interpret the term ?Variance? under standard costing, and discuss its
significance.
Level 6 Creating
7
How would you explain a flexible budget for the half year and forecast process at 60%,
75%, 90% & 100% respectively.
Particulars Rs. In
lakhs
Fixed expenses
Wages 16.8
Rent, taxes, etc. 11.2
Depreciation 14.0
Administrative expenses 17.8 59.8
Semi variable expenses(@ 50%
capacity)
Repair & maintenance 5.0
Indirect labour 19.8
Sales department salaries 5.8
Sundry administration expenses 5.2 35.8
Variable expenses (@ 50%
capacity)
Material 48.0
Labour 51.2
Other expenses 7.6 106.8
Assume that fixed expenses remain constant at all levels, semi variable expenses
remain constant between 40% and 65%, 10% increase between 65% and 85% and 20%
increase between 85% and 100%. Sales at various levels are as under 60% capacity
Rs.200 lakhs, 75% capacity Rs. 240 lakhs. 90% capacity Rs.300 lakhs. 100% capacity
Rs.340 lakhs.
Level 1 Remembering
8
(i)Will you interpret the materials mix variance from the following? (7 marks)
Material Actual Standard
A 90 units at Rs.12 each 100 units at Rs.12
each
B 60 units at Rs.15 each 50 units at Rs. 16
each.
Level 2 Understanding
(ii) Summarize the advantages and limitations of Zero Base Budgeting. (6 marks)
9
Following are the sales turnover and profit during 2 years :
Year Sales (Rs) Profit (Rs)
2000 1,40,000 15,000
2001 1,60,000 20,000
You are required to calculate
1. p/v ratio 25% (4 marks)
2. Sales required to earn a profit of Rs.40,000 (4 marks)
3. Profit when sales are Rs.1,20,000 (5 marks)
Level 3 Applying
10
i)Explain in detail the advantages and disadvantages of budgetary control system.
(7 marks)
Level 4 Analysing
(ii) Compare traditional budgeting and ZBB. (6 marks)
11
(i)Can you prepare a flexible budget for overheads on the basis of the following data
and ascertain overheads rates at 50%, 60% and 70% capacity. (7 marks)
Particulars At 60%
capacity
Variable overheads:
Indirect labour 6,000
Indirect material 18,000
Semi variable overheads:
Electricity (40% fixed 60%variable) 30,000
Repairs (80% fixed 20% variable) 3,000
Fixed overheads:
Depreciation 16,500
Insurance 4,500
Salaries 15,000
Total overheads 93,000
Estimated direct labour hours 1,86,000
ii) Analyze the advantages and disadvantages of budgetary control system. (6marks)
Level 1 Remembering
12
i) Summarize the essentials of budgetary control system; explain types of budget
in detail.
Level 2 Understanding
ii) Explain steps involved in budgeting in detail.
13
Can you assess the important applications of marginal costing for managerial
decisions?
Level 4 Analysing
14
Define Zero base budgeting. What are the different steps involved in it and how is it
useful to the ?
Level 1 Remembering
FirstRanker.com - FirstRanker's Choice
(An
Kattanku lathur ?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation ? 2019
Academic Year 2019 - 2020
Prepared by
Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J ? Asst. Professor (OG) / MBA
?
DEPARTMENT OF MANAGEMENT STUDIES
1915103 ? ACCOUNTING FOR MANAGEMENT
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:
BTL 1
Remember
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
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 31
st
December 2015. Prepare Final
accounts as on the date.
BTL 4
Analyze
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
Premium
300
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
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:
BTL 6
Create
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
07.01.2015 Sold goods to Hari 150
08.01.2015 Commission received in cash 200
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)
iii) 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:
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.
BTL 4
Analyze
14.
i) How would you describe the final Accounts for the year ended
on 31
st
march 1994? The following balances were extracted from
the books of Prasad on 31
st
March 1994.
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 overdraft1570
Salaries 850 Sales 14690
Travelling expenses 300 Bills payable 1350
Cash 210
Stock 2450
Discount allowed 40
Drawings 600
TOTAL 27460 TOTAL 27460
BTL 1
Details Rs. Details Rs.
Capital 50,000 Creditors 5,000 Remember
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 31
st
March 1994 was valued at Rs.47,000.
Q.No Unit -I -Part -C ?Questions
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 31
st
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 17140001714000
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 31
st
2015 and a balance sheet as on that date:
Adjustments Required:
Stock on 31-12-2015 Rs.4900
Salaries Unpaid Rs.300
Rent paid in advance Rs.200
Insurance prepaid Rs.90
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 2000
Stock 1-1-2016 5200
Debtors 2500
Creditors 1,000
TOTAL 66,000 66,000
UNIT II ? COMPANY ACCOUNTS 12
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 of the company?
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 1
st
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
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
The total turnover for the year ending December 31,2016 was Rs
5,00,000 divided into Rs 1,50,000 for the period upto may 1, 2016
and Rs 3,50,000 for the remaining period. Prepare the profit and
loss account and ascertain the ?Profit prior to? and after
incorporation.
BTL 1
Remember
Dr Cr
Particular Rs Particular Rs
To rent & taxes 12,000 By trading 1,55,000
account
To insurance 3,000
To EB 2,400
To salaries 36,000
To directors fee 3,000
To auditors fee 1,600
To commission 6,000
To advertisement 4,000
To discount 3,500
To office expenses 7,500
To carriage 3,000
To bank charges 1,500
To Preliminary expenses 6,500
To bad debts 2,000
To interest on loan 3,000
To net profit 60,000
1,55,000 1,55,000
Q.No. Unit - II - Part - C ? Question
1. A Ltd. Offered 100,000 equity shares of nominal value of Rs.10 each for public
subscription at Rs.12. The amount payable on the shares were shares were on
application Rs.450; on allotment (including premium)Rs.4.50; on first and final
call Rs.3.00 The actual subscription was only for 90,000 shares. All money
payable by shareholders was received from sudhakar who had taken 1,000
shares but failed to pay the final call. His shares were forfeited and reissued to
Prabhakar at Rs.6 each. Show journal entries in the books of the company in
respect of the above (including cash transactions).
2. Mohan company Ltd., was incorporated on 30
th
June 2005 to take over the
of K.Mohan as from 1
st
January 2015. The financial accounts for the
year ended 31
st
December 2015.
Particulars Rs.Rs.
Sales:
January to June
July to December
Total
120,000
180,000
3,00,000
Less: Purchases:
January to June
75000
July to December 120,000
195,000
Gross Profit
1,05,000
Less: Salaries 15000
Selling expenses 3000
Depreciation 1500
Directors remuneration 750
Debenture Interest 90
Administration Expenses(Rent, Rates etc.) 4500 24840
Balance
80,160
You are request to prepare a statement apportioning the balance of profit
between the periods prior to after incorporation and show the profit and loss
appropriation account for the year ended 31
st
December 2015.
3. Poornima Ltd., incorporated in April 1, 2008, with a capital of Rs.50,000 in
equity shares of Rs.10 each took over the running of poornima as
from January 1, 2008. The purchase price Rs.20,000 was settled on July 1,
2008, together with interest at 10% per annum by fully paid shares for
Rs.17500 and the balance by cheque.
To company?s Trial Balance as on December 31, 2008, was as below:
Particulars Rs. Rs.
Cash and Bank balances (Cash Rs. 180) 4,860
Share capital
22,500
Land and Buildings 8,000
Fixtures 750
Cycles 1000
Salaries 1200
Purchases 48500
Sales
45000
Debtors and Creditors 4500 3000
Rent from tenants
600
Rent, Rates and taxes 300
Building upkeep 150
Director?s fees 720
Sundry charges 120
Interest to vendor 1000
Total 71,10071,100
Prepare the final accounts for the year ending December 31, 2008, considering
the following additional details:
Stock at end Rs.14,000
Bad debts Rs.200 (including Rs.50 on debtors taken over from vendor) to be
written off.
Sales above include sales up to april, 1, 2008, Rs.7500.
Provide for doubtful debts.Rs.250
Depreciate Buildings 5% and cycles 20%
4. A Ltd. Was registered with an authorized capital of Rs.6,00,000 in equity
shares of Rs.10 each. The following is its trail balance on 31
st
March 2008.
Particulars Debit (Rs.) Credit
(Rs.)
Goodwill 25,000
Cash 750
Bank 39,900
Purchases 185000
Preliminary expenses 5000
Share capital
400000
12% Debentures
300000
P & L A/C (Cr.)
26250
Calls in arrears 7500
Premises 300000
Plant and machineries 330000
Interim Dividend 39250
Sales
415000
Stock (1.4.2007) 75000
Furniture & Fixtures 7200
Sundry Debtors 87000
Wages 84865
General Expenses 6835
Freight and carriage 13115
Salaries 14500
Directors Fees 5725
Bad debts 2110
Debentures interest paid 18000
Bills payable
37000
Sundry creditors
40000
General reserve
25000
Provision for bad debts
3500
Total 12467501246750
Prepare Profit and Loss account, Profit and Loss appropriation A/C and
balancesheet in proper form after making the following adjustments:
Depreciate Plant and machinery by 15%
Write off Rs.500 from preliminary expenses
Provide for 6 months interest on debentures
Leave bad and doubtful debts provision at 5% on sundry debtors
Provide for income tax at 50%
Stock on 31-3-2008 was Rs.95,000
UNIT III - ANALYSIS OF FINANCIAL STATEMENTS 12
Analysis of financial statements: Comparative Statements-Common size statements-Trend analysis ?
Financial ratio analysis, Uses and limitations of Ratio analysis-cash flow (as per Accounting Standard
3) and funds flow statement analysis.
Q.No Unit - III - Part - A ? Question Level Competence
1 What are financial statements? BTL 1
Remember
2 List out various sources and applications of cash. BTL 2
Understand
3 How would you show your understanding of debt equity ratio? BTL 3
Apply
4 List any two objectives of financial statements? BTL 4
Analyze
5 Can you assess the value or importance of funds flow statement? BTL 5
Evaluate
6 Differentiate between cash flow and funds flow statements. BTL 6
Create
7 What does cash flow analysis mean? BTL 1
Remember
8 How would you explain funds flow statement? BTL 2
Understand
9 How the various activities are classified (as per AS-3 revised) while
preparing cash flow statement?
BTL 3
Apply
10 What is meant by Trend analysis? BTL 4
Analyze
11 Can you identify the uses of cash flow statement? BTL 5
Evaluate
12 What is the difference between current ratio and liquid ratio BTL 6
Create
13 Can you recall the scope & significance of Ratio analysis? BTL 1
Remember
14 Outline the scope of Common size statements. BTL 2
Understand
15 How would you show your understanding of Cash inflow and cash
outflow?
BTL 3
Apply
16
Calculate Debtors Turnover Ratio from the following:
Total Sales 2,00,000
Cash Sales 40,000
Opening debtors 35,000
Closing Debtors 45,000
BTL 4
Analyze
17 Define Current ratio. BTL 1
Remember
18 What is the meaning of ?Funds from operations?? BTL 2
Understand
19 What are the benefits of schedule of changes in working capital? BTL 1
Remember
20 Can you list the types of working capital. BTL 1
Remember
Q.No Unit - III - Part - B ? Question Level
Competence
1
i) What are the essential attributes of financial statements ? importance and
limitations of it? (7 marks)
ii) Current Ratio is 3:5. Working capital is Rs.9,00,000. How would you show
current assets and current liabilities. (6 marks)
BTL 1
Remember
2
i) Explain the various tools and techniques of financial statements. (7 marks)
ii) Shine Limited has a current ratio 4.5:1 and quick ratio 3:1; if the stock is
36,000. Show current liabilities and current assets. (6 marks)
BTL 2
Understand
3 Define Ratio Analysis; List the advantages and Disadvantages of it. BTL 3
Apply
4 Discuss briefly the various methods of classification or types of Ratios. BTL 4
Analyze
Show the balance sheet of the concern from the following details: Evaluate
BTL 5 5
The gross profit was Rs.60,000 closing stock was Rs.5000 in excess of the opening
stock.
Stock velocity 6
Capital turnover ratio 2
Fixed assets turnover ratio 4
Gross profit ratio 20%
Debt collection period 2 months
Creditors payment period 73 days
6 Evaluate the specimen of Comparative Statements-Common size
statements.
BTL 6
Create
7 i) Prepare common size statement from the following.
Particular 2017 2018
Sales 30,00,000 35,00,000
Cost of production 15,50,000 17,00,000
Administrative expense 5,00,000 6,50,000
Selling expense 2,00,000 2,30,000
Interest 3,50,000 3,70,000
Divided received
(income)
2,50,000 2,00,000
iii)Prepare a comparative statement from the following.
Particuluar 2017 2018
Sales 25,00,000 30,00,000
Cost of goods sold 14,00,000 15,50,000
Operation expense :
Administrative expenses
Selling expenses
3,50,000
2,70,000
2,90,000
3,60,000
Non operation expenses:
Interest
Income tax
1,60,000
1,70,000
1,40,000
3,30,000
BTL 1
Remember
8 Explain the terms funds, funds flow and funds flow statement, List the advantages
and Disadvantages of it.
BTL 2
Understand
Identify the preparation of schedule of changes in working capital and Adjusted
Profit and Loss Account.
Explain terms operating activities, inventory activities, financing activities.
BTL 3
Apply
9
10
i) Analyze the procedure for the preparation of funds flow statement.
ii) The summarized balance sheet of KLtd as on 31.3.2015 nad 31.5.2016 are
as follows
Analyze
Liabilities 2017 2018 Assets 2017 2018
Rs Rs Rs Rs
Share capital 10000 15000 Fixed assets 10000 20000
P/L a/c 4000 6000 Current
assets
13000 14500
Provision for tax 2000 3000
Proposed
dividend
1000 1500
Sundry creditor 4000 6000
Outstanding
expenses
2000 3000
Total 23000 34500Total 2300034500
i) Tax paid during the year 2018 Rs 2500.
ii) Dividend paid during 2018 Rs 1000.
Prepare a statement of sources and applications of funds, showing changes in
the working capital.
11
How would you describe funds flow statement from the following figures.
BTL 1
Remember
Liabilities 31-12-
2001
31-12-
2002
Assets 31-12-
2001
31-12-
2002
Creditors 319000 365000 Cash 130000 40000
------ 200000 Debtors 100000 Provision
for
dividend
160000
Long term
loan
-------- 535000 Stock 235000 255000
Equity
capital
3600000 4000000 Land and
Buildings
540000 1020000
Surplus 100000 129000 Plant and
Machinery
2804000 3544000
Furniture 210000 210000
Total 4019000 5229000 Total 4019000 5229000
12
Show the funds from operation and cash from operation from the following
balance sheets of subha Ltd?
BTL 2
Understand
Particulars 1997 (Rs.) 1998 (Rs.)
Equity share capital 400000 400000
Reserves and surplus 282000 346000
Depreciation Reserve 20000 28000
Secured loans 40000 60000
Creditors for goods 129000106000
Outstanding expenses 17000 3000
Total 888000943000
Plant and Equipment (Cost) 570000 600000
Inventories 196000226000
Debtors 7900057000
Cash at Bank 4300060000
Total 888000943000
13
Analyze and prepare the cash flow statement. A summary of the financial
position of Mr.x for the year 1996 and 1997 is given as follows:
There were no drawings or sale of fixed assets during the year.
BTL 4
Analyze
Liabilities 1996 1997 Assets 1996 1997
Capital 70000 83000 cash 7000 13000
Creditors 10000 12000 Debtors 20000 18000
Stock 40000 52000
Fixed 13000 12000
assets
Total 80000 95000 Total 80000 95000
14
How would you describe funds flow statement for the year ended 31
st
December
2001 from the following particulars?
BTL 1
Remember
Particulars Rs.
Net profit before writing off goodwill 21500
Depreciation written off on fixed assets 3500
Goodwill written off from profits 5000
Dividends paid 7000
Shares issued for cash 10000
Purchase of machinery 20000
Increase in working capital 8000
Q.No Unit - III - Part - C ? Questions
1
Prepare common size statement from the following.
Particular 2017 2018
Assets
Cash 2,70,000 2,90,000
Debtors 1,70,000 1,50,000
Stock 1,20,000 1,00,000
Outstanding Income 30,000 20,000
Prepaid Expenses 10,000 30,000
Fixed assets 11,00,000 14,10,000
17,00,000 20,00,000
Liabilities
Creditors 1,40,000 1,50,000
Bills payable 60,000 40,000
Long term loan 5,00,000 6,10,000
Capital 10,00,000 12,00,000
17,00,000 20,00,000
2 From the balance sheets of ABC ltd., make out :
i. A statement of changes in the working capital
ii. A funds flow statement
Balance Sheet
Following is the additional information available :
1. Depreciation of Rs. 10,000 and Rs. 20,000 have been charged on plant and land and
buildings respectively in the year 2000.
2. An interim dividend of Rs. 20,000 has been paid in the year 2000.
3. Income tax of Rs. 35,000 has been paid in the year 2000.
3 Following are the balance sheets of Krishna Ltd Jaipur, for the year 2008 and 2009.
Liabilities 31.03.1999 31.03.2000 Assets 31.03.1999 31.03.2000
Eq. Share 3,00,000 4,00,000 Goodwill 1,15,000 90,000
Capital
2,00,000 1,70,000 8% 1,50,000 1,00,000 Land and
Building redeemable
pref. S.
Capital
General 40,000 70,000 Plant 80,000 2,00,000
reserve
P/L a/c 30,000 48,000 Debtors 1,60,000 2,00,000
Proposed 42,000 50,000 Stock 77,000 1,09,000
dividends
Creditors 55,000 83,000 Bills 20,000 30,000
receivable
Bills payable 20,000 16,000 Cash in 15,000 10,000
hand
Provision for 40,000 50,000 Cash at 10,000 8,000
taxation bank
6,77,000 8,17,000 6,77,000 8,17,000
Liabilities 31.03.2008 31.03.2009 Assets 31.03.2008 31.03.2009
Eq. Share
Capital
3,00,000 3,50,000 Fixed Assets
(Net)
5,10,000 6,20,000
15% pref. S.
Capital
2,00,000 1,00,000 Investments 30,000 80,000
15%
Debentures
1,00,000 2.00,000 Current Assets2,00,000 3,05,000
Reserves &
Surplus
1,10,000 2,70,000 Cash ?in-hand 40,000 70,000
Current
Liabilities
80,000 1,60,000 Discount on
Issue of
Debentures
10,000 5,000
7,90,000 10,80,000 7,90,000 10,80,000
Additional Information :
i. A machine with a book value of Rs. 40,000 was sold for Rs. 25,000.
ii. 15% preference shares were redeemed at a premium of 15% on 31.3.09 for Rs. 1, 00,000.
iii. Dividend on equity shares @ 15% was paid for the year 2008 during 2009.
iv. Depreciation charged during 2009 was Rs. 60,000.
You are asked to prepare a Cash Flow as per AS -3 (revised).
4 Describe the procedure for preparation of cash flow statement in details.
UNIT IV COST ACCOUNTING & BUDGETARY CONTROL 12
Cost Accounts - Classification of manufacturing costs - Accounting for manufacturing costs. Cost
Accounting Systems -Marginal costing including Exploring new markets and Make or Buy decisions ?
Budget - Budgetary Control - Standard cost system & Variance Analysis.
Q.No Unit - IV - Part - A ? Questions Level
Competence
1 What is Zero based budgeting? BTL 1
Remember
2 Compare ABC and traditional costing approach. BTL 2
Understand
3 How do you show your understanding on the concept ?Break Even Analysis?? BTL 3
Apply
4 Classify the elements of cost. BTL 4
Analyze
5 Discuss the concept of Break Even Point. BTL 5
Evaluate
6 Interpret the features of marginal costing. BTL 6
Create
7 Define cost accounting. BTL 1
Remember
8 Summarize the functions of cost accounting. BTL 2
Understand
9 Identify the essentials of good budgetary control system. BTL 3
Apply
Classify the types of budget. 10 BTL 4
Analyze
11 What conclusions can you draw from Margin of Safety and CVP analysis? BTL 5
Evaluate
12 Justify the usage of cost sheet. BTL 6
Create
13
Remember
BTL 1 What is Make or Buy decisions?
14 Compare Variance and Idle Time Variance. BTL 2
Understand
15 BTL 3 How would you show your understanding on Marginal costing? Apply
Conclude your understanding on budgetary control. 16 BTL 4
Analyze
BTL 1
Remember
17 What is meant by allocation and absorption of overheads?
Differentiate between budgetary control and standard costing. 18 BTL 2
Understand
19 How would you describe fixed overheads? BTL 1
Remember
Remember
20 BTL 1 Define budget?
PART- B
S.NO QUESTIONS
Level
Competence
1
Define Cost Accounting. Write in detail about objectives, functions of Cost Accounting
and how is it useful to the ?
Level 1 Remembering
2
Explain a company working at 50% capacity manufactures 10,000 units of a
product. At 50% capacity the product cost is Rs. 180 & sale price Rs.200, the
breakup of the cost is as below
At 60% working raw material cost goes up by 2% & sales price falls by 2% at 80%
working the raw material cost increases by 5% and sale price decreases by same
percent. i.e. 5%. Prepare a statement to show profitability at 60% and 80% Capacity
Level 2 Understanding
3
How do you show your understanding on the concept of Classification of
manufacturing costs & Accounting for manufacturing costs in detail?
Level 3 Applying
Cost per unit Particulars
100 Material
30 Wages
Factory overheads 30(40%fixed)
Administration overheads 20(50% fixed)
4
From the following data calculate break event point.
Particulars Rs.
Selling price per unit 20
Direct material cost per unit 8
Direct labour cost per unit 2
Direct expenses per unit 2
Overheads per unit 3
Fixed overheads (total) 20,000
If sales are 20% above the break-even point, determine the net profit.
Analyze how Break-even chart is constructed?
Level 4 Analysing
5
i) Describe the various methods of cost accounting. Level 5
Evaluating
ii) Explain Advantages and Disadvantages of cost accounting.
6
Justify your comments on the Statement. ?Cost Accounting is an essential tool of
Management?. Interpret the term ?Variance? under standard costing, and discuss its
significance.
Level 6 Creating
7
How would you explain a flexible budget for the half year and forecast process at 60%,
75%, 90% & 100% respectively.
Particulars Rs. In
lakhs
Fixed expenses
Wages 16.8
Rent, taxes, etc. 11.2
Depreciation 14.0
Administrative expenses 17.8 59.8
Semi variable expenses(@ 50%
capacity)
Repair & maintenance 5.0
Indirect labour 19.8
Sales department salaries 5.8
Sundry administration expenses 5.2 35.8
Variable expenses (@ 50%
capacity)
Material 48.0
Labour 51.2
Other expenses 7.6 106.8
Assume that fixed expenses remain constant at all levels, semi variable expenses
remain constant between 40% and 65%, 10% increase between 65% and 85% and 20%
increase between 85% and 100%. Sales at various levels are as under 60% capacity
Rs.200 lakhs, 75% capacity Rs. 240 lakhs. 90% capacity Rs.300 lakhs. 100% capacity
Rs.340 lakhs.
Level 1 Remembering
8
(i)Will you interpret the materials mix variance from the following? (7 marks)
Material Actual Standard
A 90 units at Rs.12 each 100 units at Rs.12
each
B 60 units at Rs.15 each 50 units at Rs. 16
each.
Level 2 Understanding
(ii) Summarize the advantages and limitations of Zero Base Budgeting. (6 marks)
9
Following are the sales turnover and profit during 2 years :
Year Sales (Rs) Profit (Rs)
2000 1,40,000 15,000
2001 1,60,000 20,000
You are required to calculate
1. p/v ratio 25% (4 marks)
2. Sales required to earn a profit of Rs.40,000 (4 marks)
3. Profit when sales are Rs.1,20,000 (5 marks)
Level 3 Applying
10
i)Explain in detail the advantages and disadvantages of budgetary control system.
(7 marks)
Level 4 Analysing
(ii) Compare traditional budgeting and ZBB. (6 marks)
11
(i)Can you prepare a flexible budget for overheads on the basis of the following data
and ascertain overheads rates at 50%, 60% and 70% capacity. (7 marks)
Particulars At 60%
capacity
Variable overheads:
Indirect labour 6,000
Indirect material 18,000
Semi variable overheads:
Electricity (40% fixed 60%variable) 30,000
Repairs (80% fixed 20% variable) 3,000
Fixed overheads:
Depreciation 16,500
Insurance 4,500
Salaries 15,000
Total overheads 93,000
Estimated direct labour hours 1,86,000
ii) Analyze the advantages and disadvantages of budgetary control system. (6marks)
Level 1 Remembering
12
i) Summarize the essentials of budgetary control system; explain types of budget
in detail.
Level 2 Understanding
ii) Explain steps involved in budgeting in detail.
13
Can you assess the important applications of marginal costing for managerial
decisions?
Level 4 Analysing
14
Define Zero base budgeting. What are the different steps involved in it and how is it
useful to the ?
Level 1 Remembering
Q.No Unit - IV - Part - C ? Questions
1 i) Explain the differences between Standard Costing and Budgetary Control.
ii) Explain Make or Buy decisions in details.
2 From the following budget data, forecast the cash position at the end of April, May
and June 2003.
Income and Expenditure forecast
Additional Information :
i. Sales: 20% realized in the month of sales, discount allowed 2%. Balance
realized equally in two subsequent months.
ii. Purchases: These are paid in the month following the month of supply.
iii. Wages: 25% paid in arrears following month.
iv. Rent: Rs. 1,000 per month paid quarterly in advance due in April.
v. Income ?Tax: First installment of advance tax Rs. 25,000 due on or before
15
th
June.
vi. Income from investments: Rs. 5,000 received quarterly, in April, July, etc.
vii. Cash in hand: Rs.5, 000 on 1
st
April, 2003.
3 Calculate :
i. The amount of fixed expenses.
ii. Break even sales
Month Sales(Rs.)Purchases Wages Miscellaneous
(Rs.) (Rs.) (Rs.)
February 1,20,000 84,000 10,000 7,000
March 1,30,000 1,00,000 12,000 8,000
April 80,0001,04,000 8,000 6,000
May 1,16,0001,06,000 10,000 12,000
June 88,000 80,000 8,000 6,000
iii. The number of units to break-even.
iv. The number of units to earn a profit of Rs. 40,000.
You are provided with the following information :
(1) The selling price per unit can be assumed at Rs. 100.
(2) The company sold in two successive periods 7,000 units and 9,000
units and has incurred a loss of Rs. 10,000 and earned Rs. 10,000 as
profit respectively.
4 The turnover and profits of the two years were as follows
Particulars Sales Profit/loss
I year 8000 units 15000 loss
II Year 10000 units 15000 profit
The selling price per unit is Rs 120
Calculate
? P/V Ratio,
? FC,
? Sales at BEP,
? The number of units to be sold to earn a profit of Rs 45,000,
? profit when sales are 30,000 units
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DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation ? 2019
Academic Year 2019 - 2020
Prepared by
Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J ? Asst. Professor (OG) / MBA
?
DEPARTMENT OF MANAGEMENT STUDIES
1915103 ? ACCOUNTING FOR MANAGEMENT
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:
BTL 1
Remember
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
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 31
st
December 2015. Prepare Final
accounts as on the date.
BTL 4
Analyze
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
Premium
300
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
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:
BTL 6
Create
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
07.01.2015 Sold goods to Hari 150
08.01.2015 Commission received in cash 200
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)
iii) 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:
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.
BTL 4
Analyze
14.
i) How would you describe the final Accounts for the year ended
on 31
st
march 1994? The following balances were extracted from
the books of Prasad on 31
st
March 1994.
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 overdraft1570
Salaries 850 Sales 14690
Travelling expenses 300 Bills payable 1350
Cash 210
Stock 2450
Discount allowed 40
Drawings 600
TOTAL 27460 TOTAL 27460
BTL 1
Details Rs. Details Rs.
Capital 50,000 Creditors 5,000 Remember
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 31
st
March 1994 was valued at Rs.47,000.
Q.No Unit -I -Part -C ?Questions
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 31
st
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 17140001714000
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 31
st
2015 and a balance sheet as on that date:
Adjustments Required:
Stock on 31-12-2015 Rs.4900
Salaries Unpaid Rs.300
Rent paid in advance Rs.200
Insurance prepaid Rs.90
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 2000
Stock 1-1-2016 5200
Debtors 2500
Creditors 1,000
TOTAL 66,000 66,000
UNIT II ? COMPANY ACCOUNTS 12
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 of the company?
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 1
st
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
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
The total turnover for the year ending December 31,2016 was Rs
5,00,000 divided into Rs 1,50,000 for the period upto may 1, 2016
and Rs 3,50,000 for the remaining period. Prepare the profit and
loss account and ascertain the ?Profit prior to? and after
incorporation.
BTL 1
Remember
Dr Cr
Particular Rs Particular Rs
To rent & taxes 12,000 By trading 1,55,000
account
To insurance 3,000
To EB 2,400
To salaries 36,000
To directors fee 3,000
To auditors fee 1,600
To commission 6,000
To advertisement 4,000
To discount 3,500
To office expenses 7,500
To carriage 3,000
To bank charges 1,500
To Preliminary expenses 6,500
To bad debts 2,000
To interest on loan 3,000
To net profit 60,000
1,55,000 1,55,000
Q.No. Unit - II - Part - C ? Question
1. A Ltd. Offered 100,000 equity shares of nominal value of Rs.10 each for public
subscription at Rs.12. The amount payable on the shares were shares were on
application Rs.450; on allotment (including premium)Rs.4.50; on first and final
call Rs.3.00 The actual subscription was only for 90,000 shares. All money
payable by shareholders was received from sudhakar who had taken 1,000
shares but failed to pay the final call. His shares were forfeited and reissued to
Prabhakar at Rs.6 each. Show journal entries in the books of the company in
respect of the above (including cash transactions).
2. Mohan company Ltd., was incorporated on 30
th
June 2005 to take over the
of K.Mohan as from 1
st
January 2015. The financial accounts for the
year ended 31
st
December 2015.
Particulars Rs.Rs.
Sales:
January to June
July to December
Total
120,000
180,000
3,00,000
Less: Purchases:
January to June
75000
July to December 120,000
195,000
Gross Profit
1,05,000
Less: Salaries 15000
Selling expenses 3000
Depreciation 1500
Directors remuneration 750
Debenture Interest 90
Administration Expenses(Rent, Rates etc.) 4500 24840
Balance
80,160
You are request to prepare a statement apportioning the balance of profit
between the periods prior to after incorporation and show the profit and loss
appropriation account for the year ended 31
st
December 2015.
3. Poornima Ltd., incorporated in April 1, 2008, with a capital of Rs.50,000 in
equity shares of Rs.10 each took over the running of poornima as
from January 1, 2008. The purchase price Rs.20,000 was settled on July 1,
2008, together with interest at 10% per annum by fully paid shares for
Rs.17500 and the balance by cheque.
To company?s Trial Balance as on December 31, 2008, was as below:
Particulars Rs. Rs.
Cash and Bank balances (Cash Rs. 180) 4,860
Share capital
22,500
Land and Buildings 8,000
Fixtures 750
Cycles 1000
Salaries 1200
Purchases 48500
Sales
45000
Debtors and Creditors 4500 3000
Rent from tenants
600
Rent, Rates and taxes 300
Building upkeep 150
Director?s fees 720
Sundry charges 120
Interest to vendor 1000
Total 71,10071,100
Prepare the final accounts for the year ending December 31, 2008, considering
the following additional details:
Stock at end Rs.14,000
Bad debts Rs.200 (including Rs.50 on debtors taken over from vendor) to be
written off.
Sales above include sales up to april, 1, 2008, Rs.7500.
Provide for doubtful debts.Rs.250
Depreciate Buildings 5% and cycles 20%
4. A Ltd. Was registered with an authorized capital of Rs.6,00,000 in equity
shares of Rs.10 each. The following is its trail balance on 31
st
March 2008.
Particulars Debit (Rs.) Credit
(Rs.)
Goodwill 25,000
Cash 750
Bank 39,900
Purchases 185000
Preliminary expenses 5000
Share capital
400000
12% Debentures
300000
P & L A/C (Cr.)
26250
Calls in arrears 7500
Premises 300000
Plant and machineries 330000
Interim Dividend 39250
Sales
415000
Stock (1.4.2007) 75000
Furniture & Fixtures 7200
Sundry Debtors 87000
Wages 84865
General Expenses 6835
Freight and carriage 13115
Salaries 14500
Directors Fees 5725
Bad debts 2110
Debentures interest paid 18000
Bills payable
37000
Sundry creditors
40000
General reserve
25000
Provision for bad debts
3500
Total 12467501246750
Prepare Profit and Loss account, Profit and Loss appropriation A/C and
balancesheet in proper form after making the following adjustments:
Depreciate Plant and machinery by 15%
Write off Rs.500 from preliminary expenses
Provide for 6 months interest on debentures
Leave bad and doubtful debts provision at 5% on sundry debtors
Provide for income tax at 50%
Stock on 31-3-2008 was Rs.95,000
UNIT III - ANALYSIS OF FINANCIAL STATEMENTS 12
Analysis of financial statements: Comparative Statements-Common size statements-Trend analysis ?
Financial ratio analysis, Uses and limitations of Ratio analysis-cash flow (as per Accounting Standard
3) and funds flow statement analysis.
Q.No Unit - III - Part - A ? Question Level Competence
1 What are financial statements? BTL 1
Remember
2 List out various sources and applications of cash. BTL 2
Understand
3 How would you show your understanding of debt equity ratio? BTL 3
Apply
4 List any two objectives of financial statements? BTL 4
Analyze
5 Can you assess the value or importance of funds flow statement? BTL 5
Evaluate
6 Differentiate between cash flow and funds flow statements. BTL 6
Create
7 What does cash flow analysis mean? BTL 1
Remember
8 How would you explain funds flow statement? BTL 2
Understand
9 How the various activities are classified (as per AS-3 revised) while
preparing cash flow statement?
BTL 3
Apply
10 What is meant by Trend analysis? BTL 4
Analyze
11 Can you identify the uses of cash flow statement? BTL 5
Evaluate
12 What is the difference between current ratio and liquid ratio BTL 6
Create
13 Can you recall the scope & significance of Ratio analysis? BTL 1
Remember
14 Outline the scope of Common size statements. BTL 2
Understand
15 How would you show your understanding of Cash inflow and cash
outflow?
BTL 3
Apply
16
Calculate Debtors Turnover Ratio from the following:
Total Sales 2,00,000
Cash Sales 40,000
Opening debtors 35,000
Closing Debtors 45,000
BTL 4
Analyze
17 Define Current ratio. BTL 1
Remember
18 What is the meaning of ?Funds from operations?? BTL 2
Understand
19 What are the benefits of schedule of changes in working capital? BTL 1
Remember
20 Can you list the types of working capital. BTL 1
Remember
Q.No Unit - III - Part - B ? Question Level
Competence
1
i) What are the essential attributes of financial statements ? importance and
limitations of it? (7 marks)
ii) Current Ratio is 3:5. Working capital is Rs.9,00,000. How would you show
current assets and current liabilities. (6 marks)
BTL 1
Remember
2
i) Explain the various tools and techniques of financial statements. (7 marks)
ii) Shine Limited has a current ratio 4.5:1 and quick ratio 3:1; if the stock is
36,000. Show current liabilities and current assets. (6 marks)
BTL 2
Understand
3 Define Ratio Analysis; List the advantages and Disadvantages of it. BTL 3
Apply
4 Discuss briefly the various methods of classification or types of Ratios. BTL 4
Analyze
Show the balance sheet of the concern from the following details: Evaluate
BTL 5 5
The gross profit was Rs.60,000 closing stock was Rs.5000 in excess of the opening
stock.
Stock velocity 6
Capital turnover ratio 2
Fixed assets turnover ratio 4
Gross profit ratio 20%
Debt collection period 2 months
Creditors payment period 73 days
6 Evaluate the specimen of Comparative Statements-Common size
statements.
BTL 6
Create
7 i) Prepare common size statement from the following.
Particular 2017 2018
Sales 30,00,000 35,00,000
Cost of production 15,50,000 17,00,000
Administrative expense 5,00,000 6,50,000
Selling expense 2,00,000 2,30,000
Interest 3,50,000 3,70,000
Divided received
(income)
2,50,000 2,00,000
iii)Prepare a comparative statement from the following.
Particuluar 2017 2018
Sales 25,00,000 30,00,000
Cost of goods sold 14,00,000 15,50,000
Operation expense :
Administrative expenses
Selling expenses
3,50,000
2,70,000
2,90,000
3,60,000
Non operation expenses:
Interest
Income tax
1,60,000
1,70,000
1,40,000
3,30,000
BTL 1
Remember
8 Explain the terms funds, funds flow and funds flow statement, List the advantages
and Disadvantages of it.
BTL 2
Understand
Identify the preparation of schedule of changes in working capital and Adjusted
Profit and Loss Account.
Explain terms operating activities, inventory activities, financing activities.
BTL 3
Apply
9
10
i) Analyze the procedure for the preparation of funds flow statement.
ii) The summarized balance sheet of KLtd as on 31.3.2015 nad 31.5.2016 are
as follows
Analyze
Liabilities 2017 2018 Assets 2017 2018
Rs Rs Rs Rs
Share capital 10000 15000 Fixed assets 10000 20000
P/L a/c 4000 6000 Current
assets
13000 14500
Provision for tax 2000 3000
Proposed
dividend
1000 1500
Sundry creditor 4000 6000
Outstanding
expenses
2000 3000
Total 23000 34500Total 2300034500
i) Tax paid during the year 2018 Rs 2500.
ii) Dividend paid during 2018 Rs 1000.
Prepare a statement of sources and applications of funds, showing changes in
the working capital.
11
How would you describe funds flow statement from the following figures.
BTL 1
Remember
Liabilities 31-12-
2001
31-12-
2002
Assets 31-12-
2001
31-12-
2002
Creditors 319000 365000 Cash 130000 40000
------ 200000 Debtors 100000 Provision
for
dividend
160000
Long term
loan
-------- 535000 Stock 235000 255000
Equity
capital
3600000 4000000 Land and
Buildings
540000 1020000
Surplus 100000 129000 Plant and
Machinery
2804000 3544000
Furniture 210000 210000
Total 4019000 5229000 Total 4019000 5229000
12
Show the funds from operation and cash from operation from the following
balance sheets of subha Ltd?
BTL 2
Understand
Particulars 1997 (Rs.) 1998 (Rs.)
Equity share capital 400000 400000
Reserves and surplus 282000 346000
Depreciation Reserve 20000 28000
Secured loans 40000 60000
Creditors for goods 129000106000
Outstanding expenses 17000 3000
Total 888000943000
Plant and Equipment (Cost) 570000 600000
Inventories 196000226000
Debtors 7900057000
Cash at Bank 4300060000
Total 888000943000
13
Analyze and prepare the cash flow statement. A summary of the financial
position of Mr.x for the year 1996 and 1997 is given as follows:
There were no drawings or sale of fixed assets during the year.
BTL 4
Analyze
Liabilities 1996 1997 Assets 1996 1997
Capital 70000 83000 cash 7000 13000
Creditors 10000 12000 Debtors 20000 18000
Stock 40000 52000
Fixed 13000 12000
assets
Total 80000 95000 Total 80000 95000
14
How would you describe funds flow statement for the year ended 31
st
December
2001 from the following particulars?
BTL 1
Remember
Particulars Rs.
Net profit before writing off goodwill 21500
Depreciation written off on fixed assets 3500
Goodwill written off from profits 5000
Dividends paid 7000
Shares issued for cash 10000
Purchase of machinery 20000
Increase in working capital 8000
Q.No Unit - III - Part - C ? Questions
1
Prepare common size statement from the following.
Particular 2017 2018
Assets
Cash 2,70,000 2,90,000
Debtors 1,70,000 1,50,000
Stock 1,20,000 1,00,000
Outstanding Income 30,000 20,000
Prepaid Expenses 10,000 30,000
Fixed assets 11,00,000 14,10,000
17,00,000 20,00,000
Liabilities
Creditors 1,40,000 1,50,000
Bills payable 60,000 40,000
Long term loan 5,00,000 6,10,000
Capital 10,00,000 12,00,000
17,00,000 20,00,000
2 From the balance sheets of ABC ltd., make out :
i. A statement of changes in the working capital
ii. A funds flow statement
Balance Sheet
Following is the additional information available :
1. Depreciation of Rs. 10,000 and Rs. 20,000 have been charged on plant and land and
buildings respectively in the year 2000.
2. An interim dividend of Rs. 20,000 has been paid in the year 2000.
3. Income tax of Rs. 35,000 has been paid in the year 2000.
3 Following are the balance sheets of Krishna Ltd Jaipur, for the year 2008 and 2009.
Liabilities 31.03.1999 31.03.2000 Assets 31.03.1999 31.03.2000
Eq. Share 3,00,000 4,00,000 Goodwill 1,15,000 90,000
Capital
2,00,000 1,70,000 8% 1,50,000 1,00,000 Land and
Building redeemable
pref. S.
Capital
General 40,000 70,000 Plant 80,000 2,00,000
reserve
P/L a/c 30,000 48,000 Debtors 1,60,000 2,00,000
Proposed 42,000 50,000 Stock 77,000 1,09,000
dividends
Creditors 55,000 83,000 Bills 20,000 30,000
receivable
Bills payable 20,000 16,000 Cash in 15,000 10,000
hand
Provision for 40,000 50,000 Cash at 10,000 8,000
taxation bank
6,77,000 8,17,000 6,77,000 8,17,000
Liabilities 31.03.2008 31.03.2009 Assets 31.03.2008 31.03.2009
Eq. Share
Capital
3,00,000 3,50,000 Fixed Assets
(Net)
5,10,000 6,20,000
15% pref. S.
Capital
2,00,000 1,00,000 Investments 30,000 80,000
15%
Debentures
1,00,000 2.00,000 Current Assets2,00,000 3,05,000
Reserves &
Surplus
1,10,000 2,70,000 Cash ?in-hand 40,000 70,000
Current
Liabilities
80,000 1,60,000 Discount on
Issue of
Debentures
10,000 5,000
7,90,000 10,80,000 7,90,000 10,80,000
Additional Information :
i. A machine with a book value of Rs. 40,000 was sold for Rs. 25,000.
ii. 15% preference shares were redeemed at a premium of 15% on 31.3.09 for Rs. 1, 00,000.
iii. Dividend on equity shares @ 15% was paid for the year 2008 during 2009.
iv. Depreciation charged during 2009 was Rs. 60,000.
You are asked to prepare a Cash Flow as per AS -3 (revised).
4 Describe the procedure for preparation of cash flow statement in details.
UNIT IV COST ACCOUNTING & BUDGETARY CONTROL 12
Cost Accounts - Classification of manufacturing costs - Accounting for manufacturing costs. Cost
Accounting Systems -Marginal costing including Exploring new markets and Make or Buy decisions ?
Budget - Budgetary Control - Standard cost system & Variance Analysis.
Q.No Unit - IV - Part - A ? Questions Level
Competence
1 What is Zero based budgeting? BTL 1
Remember
2 Compare ABC and traditional costing approach. BTL 2
Understand
3 How do you show your understanding on the concept ?Break Even Analysis?? BTL 3
Apply
4 Classify the elements of cost. BTL 4
Analyze
5 Discuss the concept of Break Even Point. BTL 5
Evaluate
6 Interpret the features of marginal costing. BTL 6
Create
7 Define cost accounting. BTL 1
Remember
8 Summarize the functions of cost accounting. BTL 2
Understand
9 Identify the essentials of good budgetary control system. BTL 3
Apply
Classify the types of budget. 10 BTL 4
Analyze
11 What conclusions can you draw from Margin of Safety and CVP analysis? BTL 5
Evaluate
12 Justify the usage of cost sheet. BTL 6
Create
13
Remember
BTL 1 What is Make or Buy decisions?
14 Compare Variance and Idle Time Variance. BTL 2
Understand
15 BTL 3 How would you show your understanding on Marginal costing? Apply
Conclude your understanding on budgetary control. 16 BTL 4
Analyze
BTL 1
Remember
17 What is meant by allocation and absorption of overheads?
Differentiate between budgetary control and standard costing. 18 BTL 2
Understand
19 How would you describe fixed overheads? BTL 1
Remember
Remember
20 BTL 1 Define budget?
PART- B
S.NO QUESTIONS
Level
Competence
1
Define Cost Accounting. Write in detail about objectives, functions of Cost Accounting
and how is it useful to the ?
Level 1 Remembering
2
Explain a company working at 50% capacity manufactures 10,000 units of a
product. At 50% capacity the product cost is Rs. 180 & sale price Rs.200, the
breakup of the cost is as below
At 60% working raw material cost goes up by 2% & sales price falls by 2% at 80%
working the raw material cost increases by 5% and sale price decreases by same
percent. i.e. 5%. Prepare a statement to show profitability at 60% and 80% Capacity
Level 2 Understanding
3
How do you show your understanding on the concept of Classification of
manufacturing costs & Accounting for manufacturing costs in detail?
Level 3 Applying
Cost per unit Particulars
100 Material
30 Wages
Factory overheads 30(40%fixed)
Administration overheads 20(50% fixed)
4
From the following data calculate break event point.
Particulars Rs.
Selling price per unit 20
Direct material cost per unit 8
Direct labour cost per unit 2
Direct expenses per unit 2
Overheads per unit 3
Fixed overheads (total) 20,000
If sales are 20% above the break-even point, determine the net profit.
Analyze how Break-even chart is constructed?
Level 4 Analysing
5
i) Describe the various methods of cost accounting. Level 5
Evaluating
ii) Explain Advantages and Disadvantages of cost accounting.
6
Justify your comments on the Statement. ?Cost Accounting is an essential tool of
Management?. Interpret the term ?Variance? under standard costing, and discuss its
significance.
Level 6 Creating
7
How would you explain a flexible budget for the half year and forecast process at 60%,
75%, 90% & 100% respectively.
Particulars Rs. In
lakhs
Fixed expenses
Wages 16.8
Rent, taxes, etc. 11.2
Depreciation 14.0
Administrative expenses 17.8 59.8
Semi variable expenses(@ 50%
capacity)
Repair & maintenance 5.0
Indirect labour 19.8
Sales department salaries 5.8
Sundry administration expenses 5.2 35.8
Variable expenses (@ 50%
capacity)
Material 48.0
Labour 51.2
Other expenses 7.6 106.8
Assume that fixed expenses remain constant at all levels, semi variable expenses
remain constant between 40% and 65%, 10% increase between 65% and 85% and 20%
increase between 85% and 100%. Sales at various levels are as under 60% capacity
Rs.200 lakhs, 75% capacity Rs. 240 lakhs. 90% capacity Rs.300 lakhs. 100% capacity
Rs.340 lakhs.
Level 1 Remembering
8
(i)Will you interpret the materials mix variance from the following? (7 marks)
Material Actual Standard
A 90 units at Rs.12 each 100 units at Rs.12
each
B 60 units at Rs.15 each 50 units at Rs. 16
each.
Level 2 Understanding
(ii) Summarize the advantages and limitations of Zero Base Budgeting. (6 marks)
9
Following are the sales turnover and profit during 2 years :
Year Sales (Rs) Profit (Rs)
2000 1,40,000 15,000
2001 1,60,000 20,000
You are required to calculate
1. p/v ratio 25% (4 marks)
2. Sales required to earn a profit of Rs.40,000 (4 marks)
3. Profit when sales are Rs.1,20,000 (5 marks)
Level 3 Applying
10
i)Explain in detail the advantages and disadvantages of budgetary control system.
(7 marks)
Level 4 Analysing
(ii) Compare traditional budgeting and ZBB. (6 marks)
11
(i)Can you prepare a flexible budget for overheads on the basis of the following data
and ascertain overheads rates at 50%, 60% and 70% capacity. (7 marks)
Particulars At 60%
capacity
Variable overheads:
Indirect labour 6,000
Indirect material 18,000
Semi variable overheads:
Electricity (40% fixed 60%variable) 30,000
Repairs (80% fixed 20% variable) 3,000
Fixed overheads:
Depreciation 16,500
Insurance 4,500
Salaries 15,000
Total overheads 93,000
Estimated direct labour hours 1,86,000
ii) Analyze the advantages and disadvantages of budgetary control system. (6marks)
Level 1 Remembering
12
i) Summarize the essentials of budgetary control system; explain types of budget
in detail.
Level 2 Understanding
ii) Explain steps involved in budgeting in detail.
13
Can you assess the important applications of marginal costing for managerial
decisions?
Level 4 Analysing
14
Define Zero base budgeting. What are the different steps involved in it and how is it
useful to the ?
Level 1 Remembering
Q.No Unit - IV - Part - C ? Questions
1 i) Explain the differences between Standard Costing and Budgetary Control.
ii) Explain Make or Buy decisions in details.
2 From the following budget data, forecast the cash position at the end of April, May
and June 2003.
Income and Expenditure forecast
Additional Information :
i. Sales: 20% realized in the month of sales, discount allowed 2%. Balance
realized equally in two subsequent months.
ii. Purchases: These are paid in the month following the month of supply.
iii. Wages: 25% paid in arrears following month.
iv. Rent: Rs. 1,000 per month paid quarterly in advance due in April.
v. Income ?Tax: First installment of advance tax Rs. 25,000 due on or before
15
th
June.
vi. Income from investments: Rs. 5,000 received quarterly, in April, July, etc.
vii. Cash in hand: Rs.5, 000 on 1
st
April, 2003.
3 Calculate :
i. The amount of fixed expenses.
ii. Break even sales
Month Sales(Rs.)Purchases Wages Miscellaneous
(Rs.) (Rs.) (Rs.)
February 1,20,000 84,000 10,000 7,000
March 1,30,000 1,00,000 12,000 8,000
April 80,0001,04,000 8,000 6,000
May 1,16,0001,06,000 10,000 12,000
June 88,000 80,000 8,000 6,000
iii. The number of units to break-even.
iv. The number of units to earn a profit of Rs. 40,000.
You are provided with the following information :
(1) The selling price per unit can be assumed at Rs. 100.
(2) The company sold in two successive periods 7,000 units and 9,000
units and has incurred a loss of Rs. 10,000 and earned Rs. 10,000 as
profit respectively.
4 The turnover and profits of the two years were as follows
Particulars Sales Profit/loss
I year 8000 units 15000 loss
II Year 10000 units 15000 profit
The selling price per unit is Rs 120
Calculate
? P/V Ratio,
? FC,
? Sales at BEP,
? The number of units to be sold to earn a profit of Rs 45,000,
? profit when sales are 30,000 units
UNIT V ACCOUNTING IN COMPUTERISED ENVIRONMENT AND TRENDS 12
Terms used in Computerized Accounting-Significance of Computerized Accounting System- Codification
and Grouping of Accounts, Maintaining the hierarchy of ledgers- Prepackaged Accounting software.
Q.No Unit - V - Part - A ? Questions Level Competence
1 Define the term ?codification? and ?grouping of accounts?. BTL1
Remember
2 Compare computerized accounting system and manual accounting system? BTL2
Understand
3 Identify the usage of ERP. BTL3
Apply
4 What do you think about computerized accounting? BTL4
Analyze
5 Can you assess the benefits of computerized accounting system? BTL5 Evaluate
6 Interpret the necessity of codifying the accounts. BTL6
Create
7 List the uses of Accounting Software? BTL1
Remember
8 Compare computer security problems and VIRUS problem. BTL2
Understand
9 How would you show your understanding about reserved account groups? BTL3
Apply
10 What do you think about adhoc report? BTL4
Analyze
11 Compile your views on standard integration? BTL5
Evaluate
12 How would you evaluate the need for on-line processing? BTL6
Create
13 List the types of accounting software. BTL1
Remember
14 Explain the principles of real time processing. BTL2
Understand
15 How would you show your understanding about outsourcing of accounting function? BTL3
Apply
16 How are accounts grouped for computerization? BTL4
Analyze
17 What is pre-packaged accounting software? and list any two uses. BTL1
Remember
18 Distinguish between data validation and data processing. BTL2
Understand
19 What is meant by data entry & accounting software package? BTL1
Remember
20 List the advantages of data coding. BTL1
Remember
Q.No Unit - V - Part - B ? Questions Level
Competence
1
(i)What is accounting software? Why should we use it? (6 marks)
BTL 1
Remember
(ii)List the different types of accounting software. (7 marks)
2
(i)Explain the factors to be considered for selecting Pre-packaged accounting software.
(7 marks)
BTL 2
Understand
(ii) Explain the advantages and disadvantages of Pre-packaged accounting software.
(6 marks)
3
Identify the procedure involved in the creation, alteration and deletion of ledger
accounts in tally.
BTL 3
Apply
4
(i)Analyze the significance of Computerized Accounting System. (7 marks)
BTL 4
Analyze
(ii) What inference can you make from the limitations of Computerized Accounting
system? (6 marks)
5
(i)Can you assess the importance of accounting system in ? (5 marks)
BTL 5
Evaluate (ii) Compile your views about the security problems in any organization using
computers. (8 marks)
6 How will you evaluate the various facilities to be provided by the user friendly BTL 6
Create
FirstRanker.com - FirstRanker's Choice
(An
Kattanku lathur ?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
I SEMESTER
1915103 - ACCOUNTING FOR MANAGEMENT
Regulation ? 2019
Academic Year 2019 - 2020
Prepared by
Mrs. UMADEVI.A - Asst. Professor (OG) / MBA
Mr. ANAND.J ? Asst. Professor (OG) / MBA
?
DEPARTMENT OF MANAGEMENT STUDIES
1915103 ? ACCOUNTING FOR MANAGEMENT
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:
BTL 1
Remember
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
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 31
st
December 2015. Prepare Final
accounts as on the date.
BTL 4
Analyze
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
Premium
300
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
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:
BTL 6
Create
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
07.01.2015 Sold goods to Hari 150
08.01.2015 Commission received in cash 200
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)
iii) 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:
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.
BTL 4
Analyze
14.
i) How would you describe the final Accounts for the year ended
on 31
st
march 1994? The following balances were extracted from
the books of Prasad on 31
st
March 1994.
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 overdraft1570
Salaries 850 Sales 14690
Travelling expenses 300 Bills payable 1350
Cash 210
Stock 2450
Discount allowed 40
Drawings 600
TOTAL 27460 TOTAL 27460
BTL 1
Details Rs. Details Rs.
Capital 50,000 Creditors 5,000 Remember
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 31
st
March 1994 was valued at Rs.47,000.
Q.No Unit -I -Part -C ?Questions
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 31
st
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 17140001714000
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 31
st
2015 and a balance sheet as on that date:
Adjustments Required:
Stock on 31-12-2015 Rs.4900
Salaries Unpaid Rs.300
Rent paid in advance Rs.200
Insurance prepaid Rs.90
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 2000
Stock 1-1-2016 5200
Debtors 2500
Creditors 1,000
TOTAL 66,000 66,000
UNIT II ? COMPANY ACCOUNTS 12
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 of the company?
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 1
st
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
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
The total turnover for the year ending December 31,2016 was Rs
5,00,000 divided into Rs 1,50,000 for the period upto may 1, 2016
and Rs 3,50,000 for the remaining period. Prepare the profit and
loss account and ascertain the ?Profit prior to? and after
incorporation.
BTL 1
Remember
Dr Cr
Particular Rs Particular Rs
To rent & taxes 12,000 By trading 1,55,000
account
To insurance 3,000
To EB 2,400
To salaries 36,000
To directors fee 3,000
To auditors fee 1,600
To commission 6,000
To advertisement 4,000
To discount 3,500
To office expenses 7,500
To carriage 3,000
To bank charges 1,500
To Preliminary expenses 6,500
To bad debts 2,000
To interest on loan 3,000
To net profit 60,000
1,55,000 1,55,000
Q.No. Unit - II - Part - C ? Question
1. A Ltd. Offered 100,000 equity shares of nominal value of Rs.10 each for public
subscription at Rs.12. The amount payable on the shares were shares were on
application Rs.450; on allotment (including premium)Rs.4.50; on first and final
call Rs.3.00 The actual subscription was only for 90,000 shares. All money
payable by shareholders was received from sudhakar who had taken 1,000
shares but failed to pay the final call. His shares were forfeited and reissued to
Prabhakar at Rs.6 each. Show journal entries in the books of the company in
respect of the above (including cash transactions).
2. Mohan company Ltd., was incorporated on 30
th
June 2005 to take over the
of K.Mohan as from 1
st
January 2015. The financial accounts for the
year ended 31
st
December 2015.
Particulars Rs.Rs.
Sales:
January to June
July to December
Total
120,000
180,000
3,00,000
Less: Purchases:
January to June
75000
July to December 120,000
195,000
Gross Profit
1,05,000
Less: Salaries 15000
Selling expenses 3000
Depreciation 1500
Directors remuneration 750
Debenture Interest 90
Administration Expenses(Rent, Rates etc.) 4500 24840
Balance
80,160
You are request to prepare a statement apportioning the balance of profit
between the periods prior to after incorporation and show the profit and loss
appropriation account for the year ended 31
st
December 2015.
3. Poornima Ltd., incorporated in April 1, 2008, with a capital of Rs.50,000 in
equity shares of Rs.10 each took over the running of poornima as
from January 1, 2008. The purchase price Rs.20,000 was settled on July 1,
2008, together with interest at 10% per annum by fully paid shares for
Rs.17500 and the balance by cheque.
To company?s Trial Balance as on December 31, 2008, was as below:
Particulars Rs. Rs.
Cash and Bank balances (Cash Rs. 180) 4,860
Share capital
22,500
Land and Buildings 8,000
Fixtures 750
Cycles 1000
Salaries 1200
Purchases 48500
Sales
45000
Debtors and Creditors 4500 3000
Rent from tenants
600
Rent, Rates and taxes 300
Building upkeep 150
Director?s fees 720
Sundry charges 120
Interest to vendor 1000
Total 71,10071,100
Prepare the final accounts for the year ending December 31, 2008, considering
the following additional details:
Stock at end Rs.14,000
Bad debts Rs.200 (including Rs.50 on debtors taken over from vendor) to be
written off.
Sales above include sales up to april, 1, 2008, Rs.7500.
Provide for doubtful debts.Rs.250
Depreciate Buildings 5% and cycles 20%
4. A Ltd. Was registered with an authorized capital of Rs.6,00,000 in equity
shares of Rs.10 each. The following is its trail balance on 31
st
March 2008.
Particulars Debit (Rs.) Credit
(Rs.)
Goodwill 25,000
Cash 750
Bank 39,900
Purchases 185000
Preliminary expenses 5000
Share capital
400000
12% Debentures
300000
P & L A/C (Cr.)
26250
Calls in arrears 7500
Premises 300000
Plant and machineries 330000
Interim Dividend 39250
Sales
415000
Stock (1.4.2007) 75000
Furniture & Fixtures 7200
Sundry Debtors 87000
Wages 84865
General Expenses 6835
Freight and carriage 13115
Salaries 14500
Directors Fees 5725
Bad debts 2110
Debentures interest paid 18000
Bills payable
37000
Sundry creditors
40000
General reserve
25000
Provision for bad debts
3500
Total 12467501246750
Prepare Profit and Loss account, Profit and Loss appropriation A/C and
balancesheet in proper form after making the following adjustments:
Depreciate Plant and machinery by 15%
Write off Rs.500 from preliminary expenses
Provide for 6 months interest on debentures
Leave bad and doubtful debts provision at 5% on sundry debtors
Provide for income tax at 50%
Stock on 31-3-2008 was Rs.95,000
UNIT III - ANALYSIS OF FINANCIAL STATEMENTS 12
Analysis of financial statements: Comparative Statements-Common size statements-Trend analysis ?
Financial ratio analysis, Uses and limitations of Ratio analysis-cash flow (as per Accounting Standard
3) and funds flow statement analysis.
Q.No Unit - III - Part - A ? Question Level Competence
1 What are financial statements? BTL 1
Remember
2 List out various sources and applications of cash. BTL 2
Understand
3 How would you show your understanding of debt equity ratio? BTL 3
Apply
4 List any two objectives of financial statements? BTL 4
Analyze
5 Can you assess the value or importance of funds flow statement? BTL 5
Evaluate
6 Differentiate between cash flow and funds flow statements. BTL 6
Create
7 What does cash flow analysis mean? BTL 1
Remember
8 How would you explain funds flow statement? BTL 2
Understand
9 How the various activities are classified (as per AS-3 revised) while
preparing cash flow statement?
BTL 3
Apply
10 What is meant by Trend analysis? BTL 4
Analyze
11 Can you identify the uses of cash flow statement? BTL 5
Evaluate
12 What is the difference between current ratio and liquid ratio BTL 6
Create
13 Can you recall the scope & significance of Ratio analysis? BTL 1
Remember
14 Outline the scope of Common size statements. BTL 2
Understand
15 How would you show your understanding of Cash inflow and cash
outflow?
BTL 3
Apply
16
Calculate Debtors Turnover Ratio from the following:
Total Sales 2,00,000
Cash Sales 40,000
Opening debtors 35,000
Closing Debtors 45,000
BTL 4
Analyze
17 Define Current ratio. BTL 1
Remember
18 What is the meaning of ?Funds from operations?? BTL 2
Understand
19 What are the benefits of schedule of changes in working capital? BTL 1
Remember
20 Can you list the types of working capital. BTL 1
Remember
Q.No Unit - III - Part - B ? Question Level
Competence
1
i) What are the essential attributes of financial statements ? importance and
limitations of it? (7 marks)
ii) Current Ratio is 3:5. Working capital is Rs.9,00,000. How would you show
current assets and current liabilities. (6 marks)
BTL 1
Remember
2
i) Explain the various tools and techniques of financial statements. (7 marks)
ii) Shine Limited has a current ratio 4.5:1 and quick ratio 3:1; if the stock is
36,000. Show current liabilities and current assets. (6 marks)
BTL 2
Understand
3 Define Ratio Analysis; List the advantages and Disadvantages of it. BTL 3
Apply
4 Discuss briefly the various methods of classification or types of Ratios. BTL 4
Analyze
Show the balance sheet of the concern from the following details: Evaluate
BTL 5 5
The gross profit was Rs.60,000 closing stock was Rs.5000 in excess of the opening
stock.
Stock velocity 6
Capital turnover ratio 2
Fixed assets turnover ratio 4
Gross profit ratio 20%
Debt collection period 2 months
Creditors payment period 73 days
6 Evaluate the specimen of Comparative Statements-Common size
statements.
BTL 6
Create
7 i) Prepare common size statement from the following.
Particular 2017 2018
Sales 30,00,000 35,00,000
Cost of production 15,50,000 17,00,000
Administrative expense 5,00,000 6,50,000
Selling expense 2,00,000 2,30,000
Interest 3,50,000 3,70,000
Divided received
(income)
2,50,000 2,00,000
iii)Prepare a comparative statement from the following.
Particuluar 2017 2018
Sales 25,00,000 30,00,000
Cost of goods sold 14,00,000 15,50,000
Operation expense :
Administrative expenses
Selling expenses
3,50,000
2,70,000
2,90,000
3,60,000
Non operation expenses:
Interest
Income tax
1,60,000
1,70,000
1,40,000
3,30,000
BTL 1
Remember
8 Explain the terms funds, funds flow and funds flow statement, List the advantages
and Disadvantages of it.
BTL 2
Understand
Identify the preparation of schedule of changes in working capital and Adjusted
Profit and Loss Account.
Explain terms operating activities, inventory activities, financing activities.
BTL 3
Apply
9
10
i) Analyze the procedure for the preparation of funds flow statement.
ii) The summarized balance sheet of KLtd as on 31.3.2015 nad 31.5.2016 are
as follows
Analyze
Liabilities 2017 2018 Assets 2017 2018
Rs Rs Rs Rs
Share capital 10000 15000 Fixed assets 10000 20000
P/L a/c 4000 6000 Current
assets
13000 14500
Provision for tax 2000 3000
Proposed
dividend
1000 1500
Sundry creditor 4000 6000
Outstanding
expenses
2000 3000
Total 23000 34500Total 2300034500
i) Tax paid during the year 2018 Rs 2500.
ii) Dividend paid during 2018 Rs 1000.
Prepare a statement of sources and applications of funds, showing changes in
the working capital.
11
How would you describe funds flow statement from the following figures.
BTL 1
Remember
Liabilities 31-12-
2001
31-12-
2002
Assets 31-12-
2001
31-12-
2002
Creditors 319000 365000 Cash 130000 40000
------ 200000 Debtors 100000 Provision
for
dividend
160000
Long term
loan
-------- 535000 Stock 235000 255000
Equity
capital
3600000 4000000 Land and
Buildings
540000 1020000
Surplus 100000 129000 Plant and
Machinery
2804000 3544000
Furniture 210000 210000
Total 4019000 5229000 Total 4019000 5229000
12
Show the funds from operation and cash from operation from the following
balance sheets of subha Ltd?
BTL 2
Understand
Particulars 1997 (Rs.) 1998 (Rs.)
Equity share capital 400000 400000
Reserves and surplus 282000 346000
Depreciation Reserve 20000 28000
Secured loans 40000 60000
Creditors for goods 129000106000
Outstanding expenses 17000 3000
Total 888000943000
Plant and Equipment (Cost) 570000 600000
Inventories 196000226000
Debtors 7900057000
Cash at Bank 4300060000
Total 888000943000
13
Analyze and prepare the cash flow statement. A summary of the financial
position of Mr.x for the year 1996 and 1997 is given as follows:
There were no drawings or sale of fixed assets during the year.
BTL 4
Analyze
Liabilities 1996 1997 Assets 1996 1997
Capital 70000 83000 cash 7000 13000
Creditors 10000 12000 Debtors 20000 18000
Stock 40000 52000
Fixed 13000 12000
assets
Total 80000 95000 Total 80000 95000
14
How would you describe funds flow statement for the year ended 31
st
December
2001 from the following particulars?
BTL 1
Remember
Particulars Rs.
Net profit before writing off goodwill 21500
Depreciation written off on fixed assets 3500
Goodwill written off from profits 5000
Dividends paid 7000
Shares issued for cash 10000
Purchase of machinery 20000
Increase in working capital 8000
Q.No Unit - III - Part - C ? Questions
1
Prepare common size statement from the following.
Particular 2017 2018
Assets
Cash 2,70,000 2,90,000
Debtors 1,70,000 1,50,000
Stock 1,20,000 1,00,000
Outstanding Income 30,000 20,000
Prepaid Expenses 10,000 30,000
Fixed assets 11,00,000 14,10,000
17,00,000 20,00,000
Liabilities
Creditors 1,40,000 1,50,000
Bills payable 60,000 40,000
Long term loan 5,00,000 6,10,000
Capital 10,00,000 12,00,000
17,00,000 20,00,000
2 From the balance sheets of ABC ltd., make out :
i. A statement of changes in the working capital
ii. A funds flow statement
Balance Sheet
Following is the additional information available :
1. Depreciation of Rs. 10,000 and Rs. 20,000 have been charged on plant and land and
buildings respectively in the year 2000.
2. An interim dividend of Rs. 20,000 has been paid in the year 2000.
3. Income tax of Rs. 35,000 has been paid in the year 2000.
3 Following are the balance sheets of Krishna Ltd Jaipur, for the year 2008 and 2009.
Liabilities 31.03.1999 31.03.2000 Assets 31.03.1999 31.03.2000
Eq. Share 3,00,000 4,00,000 Goodwill 1,15,000 90,000
Capital
2,00,000 1,70,000 8% 1,50,000 1,00,000 Land and
Building redeemable
pref. S.
Capital
General 40,000 70,000 Plant 80,000 2,00,000
reserve
P/L a/c 30,000 48,000 Debtors 1,60,000 2,00,000
Proposed 42,000 50,000 Stock 77,000 1,09,000
dividends
Creditors 55,000 83,000 Bills 20,000 30,000
receivable
Bills payable 20,000 16,000 Cash in 15,000 10,000
hand
Provision for 40,000 50,000 Cash at 10,000 8,000
taxation bank
6,77,000 8,17,000 6,77,000 8,17,000
Liabilities 31.03.2008 31.03.2009 Assets 31.03.2008 31.03.2009
Eq. Share
Capital
3,00,000 3,50,000 Fixed Assets
(Net)
5,10,000 6,20,000
15% pref. S.
Capital
2,00,000 1,00,000 Investments 30,000 80,000
15%
Debentures
1,00,000 2.00,000 Current Assets2,00,000 3,05,000
Reserves &
Surplus
1,10,000 2,70,000 Cash ?in-hand 40,000 70,000
Current
Liabilities
80,000 1,60,000 Discount on
Issue of
Debentures
10,000 5,000
7,90,000 10,80,000 7,90,000 10,80,000
Additional Information :
i. A machine with a book value of Rs. 40,000 was sold for Rs. 25,000.
ii. 15% preference shares were redeemed at a premium of 15% on 31.3.09 for Rs. 1, 00,000.
iii. Dividend on equity shares @ 15% was paid for the year 2008 during 2009.
iv. Depreciation charged during 2009 was Rs. 60,000.
You are asked to prepare a Cash Flow as per AS -3 (revised).
4 Describe the procedure for preparation of cash flow statement in details.
UNIT IV COST ACCOUNTING & BUDGETARY CONTROL 12
Cost Accounts - Classification of manufacturing costs - Accounting for manufacturing costs. Cost
Accounting Systems -Marginal costing including Exploring new markets and Make or Buy decisions ?
Budget - Budgetary Control - Standard cost system & Variance Analysis.
Q.No Unit - IV - Part - A ? Questions Level
Competence
1 What is Zero based budgeting? BTL 1
Remember
2 Compare ABC and traditional costing approach. BTL 2
Understand
3 How do you show your understanding on the concept ?Break Even Analysis?? BTL 3
Apply
4 Classify the elements of cost. BTL 4
Analyze
5 Discuss the concept of Break Even Point. BTL 5
Evaluate
6 Interpret the features of marginal costing. BTL 6
Create
7 Define cost accounting. BTL 1
Remember
8 Summarize the functions of cost accounting. BTL 2
Understand
9 Identify the essentials of good budgetary control system. BTL 3
Apply
Classify the types of budget. 10 BTL 4
Analyze
11 What conclusions can you draw from Margin of Safety and CVP analysis? BTL 5
Evaluate
12 Justify the usage of cost sheet. BTL 6
Create
13
Remember
BTL 1 What is Make or Buy decisions?
14 Compare Variance and Idle Time Variance. BTL 2
Understand
15 BTL 3 How would you show your understanding on Marginal costing? Apply
Conclude your understanding on budgetary control. 16 BTL 4
Analyze
BTL 1
Remember
17 What is meant by allocation and absorption of overheads?
Differentiate between budgetary control and standard costing. 18 BTL 2
Understand
19 How would you describe fixed overheads? BTL 1
Remember
Remember
20 BTL 1 Define budget?
PART- B
S.NO QUESTIONS
Level
Competence
1
Define Cost Accounting. Write in detail about objectives, functions of Cost Accounting
and how is it useful to the ?
Level 1 Remembering
2
Explain a company working at 50% capacity manufactures 10,000 units of a
product. At 50% capacity the product cost is Rs. 180 & sale price Rs.200, the
breakup of the cost is as below
At 60% working raw material cost goes up by 2% & sales price falls by 2% at 80%
working the raw material cost increases by 5% and sale price decreases by same
percent. i.e. 5%. Prepare a statement to show profitability at 60% and 80% Capacity
Level 2 Understanding
3
How do you show your understanding on the concept of Classification of
manufacturing costs & Accounting for manufacturing costs in detail?
Level 3 Applying
Cost per unit Particulars
100 Material
30 Wages
Factory overheads 30(40%fixed)
Administration overheads 20(50% fixed)
4
From the following data calculate break event point.
Particulars Rs.
Selling price per unit 20
Direct material cost per unit 8
Direct labour cost per unit 2
Direct expenses per unit 2
Overheads per unit 3
Fixed overheads (total) 20,000
If sales are 20% above the break-even point, determine the net profit.
Analyze how Break-even chart is constructed?
Level 4 Analysing
5
i) Describe the various methods of cost accounting. Level 5
Evaluating
ii) Explain Advantages and Disadvantages of cost accounting.
6
Justify your comments on the Statement. ?Cost Accounting is an essential tool of
Management?. Interpret the term ?Variance? under standard costing, and discuss its
significance.
Level 6 Creating
7
How would you explain a flexible budget for the half year and forecast process at 60%,
75%, 90% & 100% respectively.
Particulars Rs. In
lakhs
Fixed expenses
Wages 16.8
Rent, taxes, etc. 11.2
Depreciation 14.0
Administrative expenses 17.8 59.8
Semi variable expenses(@ 50%
capacity)
Repair & maintenance 5.0
Indirect labour 19.8
Sales department salaries 5.8
Sundry administration expenses 5.2 35.8
Variable expenses (@ 50%
capacity)
Material 48.0
Labour 51.2
Other expenses 7.6 106.8
Assume that fixed expenses remain constant at all levels, semi variable expenses
remain constant between 40% and 65%, 10% increase between 65% and 85% and 20%
increase between 85% and 100%. Sales at various levels are as under 60% capacity
Rs.200 lakhs, 75% capacity Rs. 240 lakhs. 90% capacity Rs.300 lakhs. 100% capacity
Rs.340 lakhs.
Level 1 Remembering
8
(i)Will you interpret the materials mix variance from the following? (7 marks)
Material Actual Standard
A 90 units at Rs.12 each 100 units at Rs.12
each
B 60 units at Rs.15 each 50 units at Rs. 16
each.
Level 2 Understanding
(ii) Summarize the advantages and limitations of Zero Base Budgeting. (6 marks)
9
Following are the sales turnover and profit during 2 years :
Year Sales (Rs) Profit (Rs)
2000 1,40,000 15,000
2001 1,60,000 20,000
You are required to calculate
1. p/v ratio 25% (4 marks)
2. Sales required to earn a profit of Rs.40,000 (4 marks)
3. Profit when sales are Rs.1,20,000 (5 marks)
Level 3 Applying
10
i)Explain in detail the advantages and disadvantages of budgetary control system.
(7 marks)
Level 4 Analysing
(ii) Compare traditional budgeting and ZBB. (6 marks)
11
(i)Can you prepare a flexible budget for overheads on the basis of the following data
and ascertain overheads rates at 50%, 60% and 70% capacity. (7 marks)
Particulars At 60%
capacity
Variable overheads:
Indirect labour 6,000
Indirect material 18,000
Semi variable overheads:
Electricity (40% fixed 60%variable) 30,000
Repairs (80% fixed 20% variable) 3,000
Fixed overheads:
Depreciation 16,500
Insurance 4,500
Salaries 15,000
Total overheads 93,000
Estimated direct labour hours 1,86,000
ii) Analyze the advantages and disadvantages of budgetary control system. (6marks)
Level 1 Remembering
12
i) Summarize the essentials of budgetary control system; explain types of budget
in detail.
Level 2 Understanding
ii) Explain steps involved in budgeting in detail.
13
Can you assess the important applications of marginal costing for managerial
decisions?
Level 4 Analysing
14
Define Zero base budgeting. What are the different steps involved in it and how is it
useful to the ?
Level 1 Remembering
Q.No Unit - IV - Part - C ? Questions
1 i) Explain the differences between Standard Costing and Budgetary Control.
ii) Explain Make or Buy decisions in details.
2 From the following budget data, forecast the cash position at the end of April, May
and June 2003.
Income and Expenditure forecast
Additional Information :
i. Sales: 20% realized in the month of sales, discount allowed 2%. Balance
realized equally in two subsequent months.
ii. Purchases: These are paid in the month following the month of supply.
iii. Wages: 25% paid in arrears following month.
iv. Rent: Rs. 1,000 per month paid quarterly in advance due in April.
v. Income ?Tax: First installment of advance tax Rs. 25,000 due on or before
15
th
June.
vi. Income from investments: Rs. 5,000 received quarterly, in April, July, etc.
vii. Cash in hand: Rs.5, 000 on 1
st
April, 2003.
3 Calculate :
i. The amount of fixed expenses.
ii. Break even sales
Month Sales(Rs.)Purchases Wages Miscellaneous
(Rs.) (Rs.) (Rs.)
February 1,20,000 84,000 10,000 7,000
March 1,30,000 1,00,000 12,000 8,000
April 80,0001,04,000 8,000 6,000
May 1,16,0001,06,000 10,000 12,000
June 88,000 80,000 8,000 6,000
iii. The number of units to break-even.
iv. The number of units to earn a profit of Rs. 40,000.
You are provided with the following information :
(1) The selling price per unit can be assumed at Rs. 100.
(2) The company sold in two successive periods 7,000 units and 9,000
units and has incurred a loss of Rs. 10,000 and earned Rs. 10,000 as
profit respectively.
4 The turnover and profits of the two years were as follows
Particulars Sales Profit/loss
I year 8000 units 15000 loss
II Year 10000 units 15000 profit
The selling price per unit is Rs 120
Calculate
? P/V Ratio,
? FC,
? Sales at BEP,
? The number of units to be sold to earn a profit of Rs 45,000,
? profit when sales are 30,000 units
UNIT V ACCOUNTING IN COMPUTERISED ENVIRONMENT AND TRENDS 12
Terms used in Computerized Accounting-Significance of Computerized Accounting System- Codification
and Grouping of Accounts, Maintaining the hierarchy of ledgers- Prepackaged Accounting software.
Q.No Unit - V - Part - A ? Questions Level Competence
1 Define the term ?codification? and ?grouping of accounts?. BTL1
Remember
2 Compare computerized accounting system and manual accounting system? BTL2
Understand
3 Identify the usage of ERP. BTL3
Apply
4 What do you think about computerized accounting? BTL4
Analyze
5 Can you assess the benefits of computerized accounting system? BTL5 Evaluate
6 Interpret the necessity of codifying the accounts. BTL6
Create
7 List the uses of Accounting Software? BTL1
Remember
8 Compare computer security problems and VIRUS problem. BTL2
Understand
9 How would you show your understanding about reserved account groups? BTL3
Apply
10 What do you think about adhoc report? BTL4
Analyze
11 Compile your views on standard integration? BTL5
Evaluate
12 How would you evaluate the need for on-line processing? BTL6
Create
13 List the types of accounting software. BTL1
Remember
14 Explain the principles of real time processing. BTL2
Understand
15 How would you show your understanding about outsourcing of accounting function? BTL3
Apply
16 How are accounts grouped for computerization? BTL4
Analyze
17 What is pre-packaged accounting software? and list any two uses. BTL1
Remember
18 Distinguish between data validation and data processing. BTL2
Understand
19 What is meant by data entry & accounting software package? BTL1
Remember
20 List the advantages of data coding. BTL1
Remember
Q.No Unit - V - Part - B ? Questions Level
Competence
1
(i)What is accounting software? Why should we use it? (6 marks)
BTL 1
Remember
(ii)List the different types of accounting software. (7 marks)
2
(i)Explain the factors to be considered for selecting Pre-packaged accounting software.
(7 marks)
BTL 2
Understand
(ii) Explain the advantages and disadvantages of Pre-packaged accounting software.
(6 marks)
3
Identify the procedure involved in the creation, alteration and deletion of ledger
accounts in tally.
BTL 3
Apply
4
(i)Analyze the significance of Computerized Accounting System. (7 marks)
BTL 4
Analyze
(ii) What inference can you make from the limitations of Computerized Accounting
system? (6 marks)
5
(i)Can you assess the importance of accounting system in ? (5 marks)
BTL 5
Evaluate (ii) Compile your views about the security problems in any organization using
computers. (8 marks)
6 How will you evaluate the various facilities to be provided by the user friendly BTL 6
Create
accounting software package?
7 List the merits and demerits of maintaining computerized accounts in spread sheet. BTL 1
Remember
8
Explain the statement ?Do you agree that a computerized environment of accounts will
ensure flawless accounting system??
BTL 2
Understand
9
How would you show your understanding about codification and grouping of accounts
in a computerized environment and manual accounts?
BTL 3
Apply
10
What inference can you make from the advantages and disadvantages of computer
accounting?
BTL 4
Analyze
11
(i)How would you explain the importance of prepackaged Accounting Software?
(6 marks)
BTL 1
Remember
(ii) What are the general problems faced in computerized accounting system?
(7 marks)
12 Explain the various Packaged Accounting Software. BTL 2
Understand
13
(i)Analyze the role of computers in accounting. (5 marks)
BTL 4
Analyze
(ii)What inference can you make from the introduction of computers in accounting?
(8 marks)
14
(i)What is accounting software? (3 marks)
BTL 1
Remember
(ii)List the usage of accounting software. (10 marks)
Q.No Unit - V - Part - C ? Questions
1 Give an example of Pre-packaged Accounting Software with relevant details.
2 How will you design a coding system? What are the factors to be considered for coding? Illustrate with an example.
3 Justify the statement ?An ERP is an integrated software package that manages the business process across the entire
enterprise?.
4 What is customized accounting software? Explain its applicability in .
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This post was last modified on 29 February 2020