a) Name the techniques of management accounting a. Financial Planning ,Marginal Costing, Standard Costing , Fund Flow Analysis b) What is Cash Flow Statement? A cash flow statement is analysis of movement of cash i.e., inflows and outflows of cash into end from a firm in a given period of time. This shows changes in cash position. c) What is Debt –Equity Ratio? It is a ratio computed by dividing the external liabilities by internal liabilities. In other words, it is the ratio of borrowed capital to the owned capital (shareholders’ fund). d) Write any two differences between Cost Accounting and Management Accounting. Cost accounting Management accounting i)it is concerned with short term planning i)It is concerned with short term &long term planning ii)it is to ascertain the cost of production ii)It is to provide information to the and the cost of goods sold planning and co-ordinating the activities of business
e) What is Management Accounting?
Preparation of information related to accounting and supplying the same to the management is called management accounting. In other words, it refers accounting for management. f) What is working capital ratio? It is ascertained by dividing net sales by the net working capital. It expresses relationship between current assets and current liabilities by dividing current assets by current ratio. g) Define Financial Analysis Financial Analysis refers to an assessment of viability, stability and profitability of a business, sub business or project h) What are common size financial statements? (Not in Syllabus) i) State any four uses of funds flow analysis. a)It helps for making financial decision b) It helps in estimating the future working capital requirements c) It helps in measuring the efficiency in the utilisation of funds d) It helps in locating the ideal funds. j) What is investing activity? Investing activity that arise from resources expended for generating future income and cash flows resources received while dealing with a firms assets constitute investing activities. k) What do you mean by ratio? The relationship of one item to another expressed in a simple mathematical form is known as a ratio l) Find out net profit, when operating profit, non-operating income and non- operating expenses are ₹2, 50,000 and ₹ 50,000 and ₹1, 00,000 respectively. The rate of income tax is 20%
Calculation of Net Profit
Operating profit 250,000 Less : Tax @ 20 % 50,000 200,000 Add: Non operating income 50,000 250,000 Less: Non –op Exp 50,000 Net profit 200,000
2015 a) Define Management Accounting According to Robert .N.Anthony, “Management Accounting is concerned with accounting information which is useful to management” b) Mention ant two tools of financial analysis i) Comparative Analysis ii) Ratio Analysis iii) Trend Analysis iv) Common size financial statement. c) What is key factor? A factor which limits production or sales is called key factor. It may be in the form of labour, demand, shortage of materials etc., d) What is B.E.P? (B.E.P) Break Even Point is that point where the total cost is equal to total revenue. In other words, it is a situation where there is no profit no loss e) What is Funds Flow Statement? It is a statement providing necessary information about the changes in the financial conditions of a business concern between two periods. It sates how the funds flow into the business and how they flow out of the business. f) Give two examples of non-operating expenses i) Interest on loan, ii) loss on sale of machine g) What is notional cash flow? Indirect movement of cash into or out of business is called notional cash flow e.g. purchase of machinery on credit basis (cash comes into business in the form of machinery) h) State two objectives of Cash Flow Statement i)It helps to plan for optimum utilisation of funds and avoid the situation leading to idle cash or surplus ii)It discloses the reasons, that lead to movement of cash balances i) Find Stock Velocity: Average stock ₹32,000 , COGS ₹1,60,000 Stock Velocity =Cost of goods sold /Avg Stock =1,60,000/ 32,000 = 5 times j) What are Solvency ratio measures? Solvency Ratio measures are the long term financial position of the enterprise. They indicate the repaying capacity of long term debt of the organisation k) What is the effect of increase in working capital on funds flow statement? Increase in working capital indicates an increase in the value of current assets between two different periods, it is application of funds. l) Give formula to calculate Gross Profit Ratio Gross Profit Ratio= Gross Profit /net sales x100
2016
a) Mention any two advantages of management accounting
i)It helps for proper planning. ii)It helps for selecting the appropriate sources of finance b) Write any two differences between cost accounting and management accounting Cost accounting Management accounting i)it is concerned with short term planning i)It is concerned with short term &long ii)it is to ascertain the cost of production term planning and the cost of goods sold ii)It is to provide information to the planning and co-ordinating the activities of business
c) What is marginal costing?
Marginal costing is the ascertainment of marginal cost by differentiating between fixed cost and variable cost and of the effect on profit of changes in the volume and types of output d) What is fey factor? A factor which limits production or sales is called key factor. It may be in the form of labour, demand, shortage of materials etc., e) What is cash flow statement? A cash flow statement is analysis of movement of cash i.e., inflows and outflows of cash into end from a firm in a given period of time. This shows changes in cash position. f) What is schedule of changes in working capital? The statement which shows the increase or decrease in working capital due to change in current assets and current liabilities is called schedule of change in working capital g) Mention any two objectives of fund flow statement. i)To help in formulating dividend policies and planning financial re-organisation ii) To supplement conventional financial statement. h) Write two examples of cash outflow from financing activities i) Cash proceeds from issuing shares or other similar instruction ii) Cash proceeds from issuing debentures, loans, bonds short term and long term borrowings i) Write any two uses of cash flow statement i)It helps for short term cash planning ii)It helps for control of cash j) Calculate the Stock Turnover Ratio – Gross Profit Ratio 25%, Sales ₹2,00,000, opening stock ₹20,000 and closing stock ₹ 40,000 Stock Turnover Ratio=Cost of Goods Sold /Average stock=150,000/30,000 [COGS= Sales –Gross Profit] COGS= 2, 00,000- 50,000 = 150,000 Gross Profit = sales x 20% = 2, 00,000x25 /100 = 50,000 Average stock = opening stock +closing stock /2= 20,000 +40,000 /2 = 30,000 k) Determine BEP in units from the following information Sales ₹90 per unit , variable cost ₹ 60 per unit and fixed cost ₹6,00,000 B.E.P in units = Fixed Cost /Contribution per units = 6, 00,000/30 = 20,000 units Contributions per units = Sales – Variable Cost = 90 – 60 =30 l) Calculate current assets from the following information current ratio 3, current liabilities ₹1,00,000 Current Ratio =Current Assets / Current liabilities 3 = Current Assets/1, 00,000
Therefore, Current Assets = 3x 1, 00,000= 450,000
2017 a) State any two objectives of management accounting i)It helps in planning and formulation of future policies ii)It helps in organising b) What is management accounting? Preparation of information related to accounting and supplying the same to the management is called management accounting. In other words, it refers accounting for management c) What is B.E.P? (B.E.P) Break Even Point is that point where the total cost is equal to total revenue. In other words, it is a situation where there is no profit no loss d) What is contribution? Contribution is the difference between sales and variable cost of sales e) Fixed assets ₹8,00,000 Working capital ₹ 2,00,000, COGS ₹4,00,000 , Gross Profit ₹8,00,000 . Calculate capital turnover ratio Capital Turnover Ratio = sales / Capital employed = 480,000/1000000 =4.8:1 Sales = COGS + Gross Profit = 4000000 + 800,000 =4800000 Capital Employed = Fixed Assets + working Capital =800,000+ 200,000= 1000000 f) What is funds flow statement? It is a statement providing necessary information about the changes in the financial conditions of a business concern between two periods. It sates how the funds flow into the business and how they flow out of the business g) State any four uses of fund flow statement. i)It helps for making financial decision ii) It helps in locating the idle funds iii)It helps in estimating the future working capital requirements iv)It helps in measuring the efficiency in the utilisation of funds h) What is investing activities? Investing activities that arise from resources expended for generating future income and cash flows resources received while dealing with firms assets constitute investing activities i) What do you mean by ratio? The relationship of one item to another expressed in a simple mathematical form is known as ratio. j) How to improve P/V ratio? i)Increase the selling price ii)Reduce or decrease the variable costs iii)Altering sales mixture k) Give two examples of cash outflow from financing activities i) Cash proceeds from issuing shares or other similar instruction ii) Cash proceeds from issuing debentures, loans, bonds short term and long term borrowings l) State two differences between fund flow statement and cash flow statement Fund Flow Statement Cash Flow Statement i) It is based on working capital i)It is based on cash concept of funds ii)It facilitates for long term plannings ii)It is more useful for short term plan
2018
a) Define management accounting
According to Robert .N.Anthony, “Management Accounting is concerned with accounting information which is useful to management” b) What is marginal cost? Marginal cost is the amount by which total cost changes when there is change in output by one unit c) What is fund flow statement? It is a statement providing necessary information about the changes in the financial conditions of a business concern between two periods. It sates how the funds flow into the business and how they flow out of the business d) Write any four techniques of management accounting a. Financial Planning ,Marginal Costing, Standard Costing , Fund Flow Analysis e) What is cash flow statement? A cash flow statement is analysis of movement of cash i.e., inflows and outflows of cash into end from a firm in a given period of time. This shows changes in cash position. f) What is meant by ratio? The relationship of one item to another expressed in a simple mathematical form is known as ratio. g) What do you mean by positive cash outflow? When the cash comes into the enterprise it is called positive cash outflow h) Give the meaning of sources of funds with two examples. Transactions which result in an increase in the amount of fund or working capital are called sources of funds. Examples; i) Non –operating incomes ii) Fund from operations iii) Issue of shares for cash or for any other current asset i) Write the formula of margin of safety Margin of Safety =Actual Sales – B.E.P sales j) State any four functions of management accounting i) Planning and forecasting ii)Modification of data iii) Analysis and interpretation iv) Co-ordination k) Calculate P/V Ratio: Sales ₹2,50,000 Variable Cost ₹1,50,000 P/V Ratio = Contribution /Salesx100 =100,000/2, 50,000x100 =40% Contribution = Sales – Variable Cost = 250000- 150000 = 100,000
l) From the following information calculate operating ratio : Net Sales ₹8,00,000 COGS ₹5,00,000 and operating expenses ₹ 60,000 Operating Ratio = COGS + Operating expenses/Net Sales x100 = 500,000+ 60,000/ 800,000 x100= 70%
2019 a) Mention any two features of management accounting i)It is advisory in nature ii)It is directed towards the future (Concerned with the future) b) Write any two advantages of management accounting i) It helps in proper planning ii)It helps for comparison c) Mention any four techniques of management accounting Financial Planning, Marginal Costing, Standard Costing , Fund Flow Analysis d) What are marginal costs? Marginal Costs are Direct Materials, Direct Wages, Direct Expenses and Variable Overheads e) Calculate B.E.P in units : Selling Price ₹ 100 per unit , Variable Costs ₹ 60 per unit ; Fixed Costs ₹ 80,000 B.E.P = Fixed cost /selling price – variable cost =80,000/100- 60 =80,000/40 = 20,000 units f) Calculate the margin of safety from the following data : Actual sales ₹5,00,000 ; B.E.P Sales ₹3,00,000 Margin of Safety = Actual sales – B.E.P sales Margin of Safety =₹5,00,000- ₹3,00,000= ₹2,00,000 g) Give the formula to calculate Gross Profit Ratio Gross Profit Ratio = Gross Profit / Net Salesx100 h) Calculate Stock Turnover Ratio A; Average Stock ₹ 40,000 Cost of Goods Sold ₹ 1,20,000 Stock Turnover Ratio = COGS/Avg Stock = 120,000/40,000 = 3 Times i) Give the meaning of current assets with two examples Current assets means the assets which are realised within a year e.g., cash, debtors B/R j) Mention the types of cash flow i) Actual Cash flow ii) Notional Cash flow k) Give four examples of non- operating expenses i) Depreciation ii) Goodwill written off iii) Transfer to reserve iv) Preliminary expenses l) Write any two objectives of cash flow statement. i) It helps to plan for optimum utilisation of funds and avoid the situation leading to idle cash or surplus ii) It discloses the reasons that lead to movement of cash balances 2020 a) What is management accounting? Preparation of information related to accounting and supplying the same to the management is called management accounting. In other words, it refers accounting for management b) State any two functions of Management Accounting i) Planning and forecasting ii)Modification of data iii) Analysis and interpretation iv) Co-ordination c) Mention any two objectives of Management Accounting i)It helps in planning and formulation of future policies ii)It helps in organising d) Give the Marginal Costing Equation Marginal Cost = Total cost – fixed cost e) What is Margin of Safety? Margin of safety is the difference between the actual sales and Sales at break -even point f) Calculate Fixed Cost : Sales ₹30,000 ; Variable Cost ₹ 15,000 and Profit ₹ 7,000 Fixed Cost = Sales – variable cost – profit Fixed Cost = 30,000-15000 – 7000 =15000 -7000 = 8000 g) Why is schedule of changes in working capital prepared? Schedule of change in working capital is prepared to know the increase or decrease in working capital due to changes in current assets and current liabilities h) Calculate the cost of machinery purchased : Opening Machinery ₹5,00,000 ; Cost of Machinery sold ₹ 1,00,000 and Closing Machinery ₹ 6,50,000
To bal b/d 500,000 By sales 100,000
To Bank 2,50,000 By bal c/d 450,000 (b/f)(Purchase) Total 750,000 Total 750,000
i) State any two uses of cash flow statement
i)it helps for short term cash planning ii)it helps in formulating the policies j) Give any two examples of cash inflow from investing activities i)Sale of land ii) Sale of machinery k) Give the meaning of ratio The relationship of one item to another expressed in a simple mathematical form is known as ratio l) Calculate Capital Turnover Ratio : Fixed Assets ₹5,00,000 ; Working Capital ₹ 3,00,000 ; Cost of goods sold ₹22,00,000 and Gross Profit ₹ 2,00,000 Capital Turnover Ratio = Sales/Capital employed = 24,00,000/800,000 = 3:1 Sales = COGS+ Gross Profit =22,00,000+200,000 = 24,00,000 Capital Employed = Fixed Assets + Working Capital = 500,000+300,000 =800,000 2021 a) State any two features of Management Accounting i)It is advisory in nature ii)It is directed towards the future (Concerned with the future) b) Define Management Accounting According to Robert .N.Anthony, “Management Accounting is concerned with accounting information which is useful to management c) Write any two differences between Financial Accounting and Management Accounting
Financial accounting Management accounting
i)It is historical data. It records only i)It is estimated or projection of data transactions which have already taken for the future place ii)The main objective is to measure ii)The main objective is to facilitate and assess the business result and managerial decisions financial position of the concern
d) What is Marginal Costing?
Marginal costing is the ascertainment of marginal cost by differentiating between fixed cost and variable cost and of the effect on profit of changes in the volume and types of output e) Write the formula of P/V Ratio P/ V Ratio = Contribution / Sales f) What is fund flow statement? It is a statement providing necessary information about the changes in the financial conditions of a business concern between two periods. It sates how the funds flow into the business and how they flow out of the business. g) Give two examples of non- operating incomes Rent received, Profit on sale of assets, Refund of income tax, Dividend received h) What is cash flow statement? A cash flow statement is analysis of movement of cash i.e., inflows and outflows of cash into end from a firm in a given period of time. This shows changes in cash position. i) Write two examples of cash outflow of investing activities Purchase of machinery, Purchase of Land, Purchase of Investments j) What do you mean by ratio? The relationship of one item to another expressed in a simple mathematical form is known as ratio. k) Give formula to calculate Net Profit Ratio Net Profit Ratio = Net Profit after Tax /Net Sales x100 l) Determine B.E.P in units from the following information. Sales ₹90 per unit , variable cost ₹ 60 per unit and fixed cost ₹ 60,000 B.E.P in units = Fixed cost/ Selling price – Variable Cost = 60,000/90-60 = 60000/30 = 2000 units
