C70096
D 70096
FIFTH SEMESTER B.Com. DEGREE EXAMINATION, NOVEMBER 2019
(CUCBCSS-UG)
B.Com.
BCM 5B 07-ACCOUNTING FOR MANAGEMENT
(2017 Admissions)
Time: Three Hours Maximum: 80 Marks
Part I (Objective Questions)
Answer all ten questions. Each question carries 1 mark.
Choose the correct answer:
1. The use of Management Accounting is ……………..
(a) Compulsory.
(c) Obligatory.
(b) Optional.
(d) All the above.
2. Financial Statements are…………….
(a) Estimates of Facts.
(b) Anticipated Facts.
(c) Recorded Facts.
(d) None of these.
3. Capital Gearing Ratio is one of the……………
(a) Liquidity Ratios.
(b) Leverage Ratios.
(c) Profitability Ratios.
(d) None of them.
4. Which of the following is a non-current item?
(a) Share premium.
(b) Bills Accepted.
(c) Bank balance.
(d) Payment of wages.
5. Which of the following suggestions will improve the Current Ratio ?
(a) To pay a Current Liability.
(b) To Sell a Motor Car at a slight loss.
(c) To borrow money for a short time on a interest bearing promissory note.
(d) To purchase stock for cash.
Fill in the Blanks:
6. Management Accounting is concerned with …………… of Data
7. Liquid Ratio is also known as……………..
8. Gross capital employed =.....................
9. Issue of Capital for Cash will ………….. Working Capital.
10. Difference between sales and marginal cost of sales is called ………..
(10 x 1 = 10 marks)
Part II (Short Answer Questions)
Answer any eight out of the ten questions in two or three sentences. Each question carries 2 marks.
11. Define Management Accounting.
12. What are Financial Statements?
13. What is a comparative income statement?
14. Following information is available for a Concern: Current Ratio 3.5, Liquid Ratio 2.5,
Working Capital Rs. 1,00,000.
Find the value of:
(a) Current Assets.
(b) Current Liabilities.
(c) Value of Inventory.
15. List any four sources fund.
16. List any four transactions which results in cash outflow in a business.
17. What is contribution?
18. What is the Angle of Incidence?
19. Find the value of current assets when Current Ratio is 2.4 and Working Capital is Rs.
1,40,000.
20. From the following calculate Debtors Turnover Ratio:
(a) Annual credit sales Rs. 25,000.
(b) Returns inwards Rs. 1,000.
(c) Debtors Rs. 3,000.
(d) Bills receivables Rs. 1,000.
(8 x 2 = 16 marks)
Part III (Short Essay Questions)
Answer any six out of the eight questions in about 200 words.
Each question carries 4 marks.
21. Discuss the various steps required for the Installation of Management Accounting
System in an organisation.
22. List and explain Financial Statements usually prepared by business organisations.
23. From the following data prepare a Comparative Income Statement and comment on
profitability of the concern:
Particulars 2018 2019
Rs. in (000) Rs. in (000)
Net sales 785 900
Cost of goods sold 450 500
Opération expenses:
General and administrative expenses 70 72
Selling expenses 80 90
Non operating expenses:
Interest paid 25 30
Income tax 70 80
24. Calculate Net Working Capital:
(a) Current Ratio 2.5
(b) Liquid Ratio 1.75
(c) Stock Rs. 1,50,000
25. Following are the extracts from the Balance Sheet of ABC & Co Ltd. as on 31st December 2015 and 2016. Compute Fund from Operations :
Particulars 2015 2016
Rs. Rs.
Profit and Loss appropriation account 45,000 60,000
General reserve 30,000 37,500
Goodwill 15,000 7,500
Preliminary expenses 9,000 6,000
Provision for depreciation on machinery 15,000 18,000
26. Define Cash Flow Statement and explain different types of cash flows.
27. The management of a company finds that while the cost of making a component part is Rs. 15, the same is available in the market at Rs. 13 with an assurance to continuous supply. The cost information for production is as follows:
Rs.
(1) Material 3.50
(ii) Direct labour 5.50
(iii) Other variable expenses 3.00
(iv) Fixed expenses 3.00
Total 15.00
Give a suggestion whether to make or buy this part. Give also your views in case the supplier reduces the price form Rs. 13 to Rs. 11.
28. What is meant by Capital Gearing Ratio? How it is calculated?
(6 x 4 = 24 marks)
Part IV (Essay Questions)
Answer any two out of the three questions in about 800 words.
Each question carries 15 marks.
29. Management of the ABC Limited considered that product N one of its three main lines is not as profitable as the other two with the result no particular efforts are being made to push its sales.
The selling price and cost of the three products are:
Product Selling Direct Direct Labour
Price Material Dept. X Dept. Y Dept. Z
R 70 12 8 3 3
N 60 8 3 8 3
V 66 10 3 3 8
Overhead rates for each department per Rupee of Direct Labour are as follows:
Dept. X Dept. Y Dept. Z
Variable overhead 1.25 0.50 1.0
Fixed overhead 1.25 2.0 1.50
Total 2.50 2.50 2.50
What advice would give to the management about the Profitability of the Product? Give Reasons.
30. From the following Balance Sheets of Deva Limited as on 31st December 2012 and 2013, prepare:
(a) Schedule Of Changes in Working Capital.
(b) Fund Flow Statement.
Balance Sheet
Liabilities 2012 2013 Assets 2012 2013
Rs. Rs. Rs. Rs.
Sundry creditors 10,00,000 10,30,000 cash 16,00,000 17,76,000
Bills Payable 2,00,000 2,50,000 Sundry debtors 4,00,000 7,40,000
Debentures 8,80,000 8,80,00 stock of goods 6,00,000 6,88,000
Provision for Land 1,60,000 1,60,000
Depreciation 2,00,000 1,12,000 Building 8,00,000 6,40,000
Reserves and surplus 6,00,000 7,80,000 plant and
Share capital 14,00,000 17,14,0000 machinery 6,00,000 6,80,000
Debenture
Discount 80,000 72,000
Patents 40,000 36,000
42,80,000 47,92,000 42,80,000 47,92,000
Additional information: (i) Net profit for the year 2013 is Rs. 4,00,000.
(ii) Dividend paid-Rs. 80,000
(iii) Depreciation charged-Rs. 32,000.
(iv) The company issued equity shares for Rs. 2,00,000 bonus shares of Rs. 1,40,000
(v) A building was sold for-Rs. 56,000 the cost and book value being-Rs. 1,60,000 and Rs. 40,000 respectively.
31. What is Management Accounting? Explain the Scope of Management Accounting.
(2 x 15 30 marks)
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