Management Accounting Exam Repository

B.Com. (CBCS) Degree Examination, April 2024

Commerce Core — Management Accounting

Time: Three hours Max Marks: 75 Code: 32094 E

PART A — (10 x 1 = 10 marks)

Answer ALL questions. Choose the correct answer.

1. Management Accounting maintains

Journal
Journal and ledger
Ledger alone
None of these [cite: 59]

2. Management Accounting helps Management in

Preparation of Final accounts
Raising Finance
Filing Tax returns
Decision making [cite: 21]

3. The term 'fund' refers to

Reserves
Working Capital [cite: 27]
Profits
Cash

4. Cash flows include

Cash receipts only
Cash payments only
Cash receipts and payments [cite: 39]
Cash and Non cash incomes and expenses

5. ________ include things like rent and utilities, business licenses, accounting fees, advertising expenses, and payroll.

Overhead costs [cite: 60]
Marginal costs
Standard costs
Factory cost

6. ________ is financial jargon for managing income and expenditure.

Budgetary control [cite: 71]
Budget
FFO
CFO

7. ________ is the practice of estimating expenses in the production process since manufacturers cannot predict actual costs in advance.

Break even analysis
Standard costing [cite: 88]
Marginal costing
Variance analysis

8. A ________ is a calculation that tells small business owners what quantity of product must be sold to be profitable.

Breakeven analysis [cite: 101]
FFO
CFO
Capital budgeting

9. Capital Budgeting deals with

Working Capital
Long Term Investments [cite: 119]
Short Term Investments
None of the above

10. Net Present Value is the difference between

Cash received and paid
Investment and Income
Present Value of Cash inflows and outflows [cite: 130]
None of the above

PART B — (5 x 5 = 25 marks)

Answer ALL questions, choosing either (a) or (b). Answer should not exceed 250 words.

11. (a) What are the objectives of Management Accounting?

- OR -

11. (b) Distinguish between Cost Accounting and Management Accounting.

12. (a) Explain in detail the method of ascertaining 'Funds from Operations'.

- OR -

12. (b) Calculate the Cash from operations from the following items given[cite: 108]:

Particulars	Amount (Rs.)
Funds from Operations [cite: 116]	84,000
Increase in current liabilities[cite: 116]:
Trade creditors	12,000
Bills payable	4,500
Outstanding expenses	5,500
Increase in current assets[cite: 116]:
Trade debtors	40,500
Trade investments	30,500
Prepaid expenses	3,500

13. (a) You are required to prepare a production budget for the half year ending June 2000 from the following information[cite: 136]:

Product	Budgeted sales quantity (Units)	Actual stock on 31-12-99 (Units)	Desired stock on 30-6-2000 (Units)
S	20,000	4,000	5,000
T	50,000	6,000	10,000

- OR -

13. (b) Martin Ltd. plans to sell for the next year 50,000 units of a particular product. Two kinds of raw materials A and B are required for manufacturing the product. Each unit of the product requires 2 units of A and 3 units of B.

The estimated opening balances at the commencement of the next year are:
Finished product 8,000 units, Raw materials A 12,000 units, B 15,000 units.

The desired closing balances at the end of the next year are:
Finished product 6,000 units, Raw materials A 13,000 units, B 16,000 units.

Draw up a raw materials purchase budget for the next year.

14. (a) State the benefits of Cost Volume and Profit analysis.

- OR -

14. (b) What are the importances of Break even analysis?

15. (a) Define 'Capital Budgeting'. What is its importance?

- OR -

15. (b) A Project costs Rs.15,60,000 and yields annually a profit of Rs.2,70,400 after depreciation of 12% p.a but before tax at 25%. Calculate pay-back period.

PART C — (5 x 8 = 40 marks)

Answer ALL questions, choosing either (a) or (b). Answer should not exceed 600 words.

16. (a) What are the advantages and disadvantages of Management Accounting?

- OR -

16. (b) Explain the tools of Management Accounting.

17. (a) Calculate funds from operations from the following Profit and Loss A/c.

Particulars	Rs.	Particulars	Rs.
To Expenses paid	3,00,000	By Gross Profit	4,50,000
To Depreciation	70,000	By Gain on sale of land	60,000
To Loss on sale of machine	4,000
To Discount	200
To Goodwill	20,000
To Net Profit	1,15,800
Total	5,10,000	Total	5,10,000

- OR -

17. (b) From the following Balance Sheet of Arvind Ltd., you are required to prepare a cash flow statement:

Liabilities	1989 (Rs.)	1990 (Rs.)	Assets	1989 (Rs.)	1990 (Rs.)
Share capital	4,00,000	5,00,000	Cash	60,000	94,000
Trade creditors	1,40,000	90,000	Debtors	2,40,000	2,30,000
P&L a/c	20,000	46,000	Stock	1,60,000	1,80,000
			Land	1,00,000	1,32,000
Total	5,60,000	6,36,000	Total	5,60,000	6,36,000

18. (a) What is Budgeting? What are the uses of Budgeting?

- OR -

18. (b) Quick Products Ltd. sells two products X and Y in two divisions North and South. The following were the budgeted and actual sales for the year 1999.

Particulars	Budget (North)		Budget (South)		Actual (North)		Actual (South)
Particulars	Units	Price	Units	Price	Units	Price	Units	Price
Product X	500	180	300	180	600	180	400	180
Product Y	300	430	200	430	200	430	150	430

For the year 2000, the board of directors has approved the proposal of sales department to increase the price of 'X' to Rs.200 and decrease the price of 'Y' to Rs.400.

Sales estimates from divisional managers:
North: X - 800 units, Y - 500 units
South: X - 600 units, Y - 300 units

Advertising consultants propose a campaign expected to result in additional sales of 20% of each product in each division over the estimated sales.

Prepare the sales budget for the year 2000 and present it together with the budgeted and actual sales for 1999.

19. (a) What are the advantages and disadvantages of standard costing?

- OR -

19. (b) List out the advantages and disadvantages of Marginal costing.

20. (a) An investment of Rs.10,000 (having scrap value of Rs.500) yields the following returns:

Years	1	2	3	4	5
Yields (Rs)	4,500	4,000	3,500	3,000	2,500

The cost of capital is 10%. Is the investment desirable?

Discuss it according to Net Present Value method assuming the P.V factors for 1st, 2nd, 3rd, 4th and 5th years are .909, .826, .751, .683, .621 respectively.

- OR -

20. (b) A company is considering investment of Rs. 10,00,000 in a project. The following are the income forecasts, after depreciation and tax:
1st year loss: Rs.1,00,000, 2nd year profit Rs.3,00,000, 3rd year profit Rs.4,00,000, 4th year profit Rs.2,00,000 and 5th year profit Rs.2,00,000.
Calculate the accounting rate of return (i) on original investment method and (ii) on average investment method.

B.Com. (CBCS) Degree Examination, April 2023

Commerce Core — Management Accounting

Time: Three hours Max Marks: 75 Code: 32018 E

PART A — (10 x 1 = 10 marks)

Answer ALL questions. Choose the correct answer.

1. The term fixed assets includes

Stock-in-trade
Furniture [cite: 219]
Payments in advance
Accounts receivable

2. Liquid ratio is also known as

Acid-test ratio [cite: 224]
Current ratio
Working capital ratio
Net asset ratio

3. Current assets include

Cash and bank balance [cite: 237]
Long-term investment
Machinery
Preliminary expenses

4. Operating cost is suitable for

Job order business
Contractors
Sugar industry
Service industries [cite: 245]

5. Sunk cost is cost relating to

The present
Future
Past [cite: 248]
Tax

6. Depreciation of machinery is

Application of fund
Sources of fund [cite: 253]
No flow of fund
None of these

7. Purchase of goods for cash result in

Decrease in cash [cite: 257]
No impact
Increase in cash
Either (a) or (b)

8. Increase the amount of debtors results in

Decrease in cash
Increase in cash
No change (in immediate cash) [cite: 266]
None of these

9. The budget which is prepared first of all is

Budget for key factor [cite: 268]
Cash budget
Master budget
Flexible budget

10. Sales budget is

Functional budget [cite: 289]
Expenditure budget
Master budget
Capital budget

PART B — (5 x 5 = 25 marks)

11. (a) State the natures of management accounting.

- OR -

11. (b) What are the advantages of management accounting?

12. (a) From the trading a/c calculate: (i) Gross profit ratio (ii) Stock turnover ratio.

To opening stock	1,00,000	By sales	5,60,000
To purchase	3,50,000	By closing stock	1,00,000
To wages	9,000
To gross profit	2,01,000
Total	6,60,000	Total	6,60,000

- OR -

12. (b) Write short note on liquidity ratios.

13. (a) From the following P and L A/c calculate funds from operation:

To Rent	35,000	By Gross profit	9,86,000
To Depreciation	3,000
To Discount	10,000
To Goodwill	5,000
To Expenses	6,000
To Net profit	9,27,000
Total	9,86,000	Total	9,86,000

- OR -

13. (b) What are the uses of fund flow statement?

14. (a) What are the advantages of cash flow statements?

- OR -

14. (b) From the following profit and loss account calculate cash from operation:

To Salary	2,000	By Gross profit	5,000
To Depreciation	1,000	By profit on sale of building	5,000
To Loss on sale of furniture	500
To Goodwill	1,000
To Net profit	5,500
Total	10,000	Total	10,000

15. (a) How and why cash budgets are prepared?

- OR -

15. (b) From the following data, prepare production budgets.

Product	Opening stock	Closing stock	Sales
X	2,000	5,000	10,000
Y	3,000	4,000	15,000
Z	4,000	3,000	13,000

PART C — (5 x 8 = 40 marks)

16. (a) Difference between management accounting and financial accounting.

- OR -

16. (b) Explain the objectives of management accounting.

17. (a) Write short note on current ratio, liquid ratio and proprietary ratio.

- OR -

17. (b) Calculate: (i) Gross profit ratio (ii) Operating profit ratio (iii) Operating ratio (iv) Net profit ratio.

Data: Sales Rs. 42,000, Sales return Rs. 2,000, Cost of sales Rs. 32,800, Interest expenses (non-operating) Rs. 200. Income from investment Rs. 400, Administrative expenses Rs. 2,600, Selling expenses Rs. 1,400 and depreciation Rs. 400.

18. (a) From the following balance sheets prepare fund flow statement:

Liabilities	2013	2014	Assets	2013	2014
Share capital	3,00,000	4,00,000	Machinery	50,000	60,000
Creditors	1,00,000	70,000	Furniture	15,000	10,000
Profit and Loss A/c	15,000	30,000	Stock in trade	85,000	1,05,000
			Debtors	1,60,000	1,50,000
			Cash	1,05,000	1,75,000
Total	4,15,000	5,00,000	Total	4,15,000	5,00,000

- OR -

18. (b) Explain the term "flow of funds".

19. (a) Give the format of cash flow statement.

- OR -

19. (b) Calculate cash from operations from the following:

Particulars	2013	2014
Profit and Loss account	10,000	20,000
Bills receivable	18,000	20,000
Provision for depreciation	40,000	42,000
Outstanding rent	1,600	4,000
Prepaid insurance	2,000	1,800
Goodwill	21,000	20,000
Stock	12,000	16,000

20. (a) Explain the difference between a forecast and a budget.

- OR -

20. (b) State the advantages and limitations of budgetary control.