Accounting for Managers

Time: Three Hours Maximum: 75 marks

Part A: - (10 * 1 = 10 marks)

Answer all questions:

Write a short note on the following:

1. Accountancy
2. Personal Account
3. Single Entry system
4. Journal
5. Cost
6. Profit
7. Management Accounting
8. Ratio
9. Selling
10. Product

Part B :- (5 * 5 = 25 marks)

Answer all questions, choosing either (a) or (b)

11 a) What are the differences between accounting and book keeping?

Or
b) Briefly explain rules of accounting.

12 a) Briefly explain the merits and demerits of single entry system.

Or
b) What are the reasons for depreciation? Explain.

13 a) What are the classifications of costs? Explain.

Or
b) List out the importance of Activity based costing

14 a) Briefly explain the objectives of management accounting.

Or
b) Briefly explain the costs concepts of decision making.

15 a) What are the objectives of seller process further decision?

Or
b) What are the factors influencing the plant shut decision?
 Part C: (5 * 8 = 40 marks)

Answer all questions, choosing either (a) or (b):

16 (a) Explain the fundamental concepts of accounting?

Or
(b) What are the various classifications of accounts? Explain.

17 (a) Statement of financial position of Mr. Anup is given below:

Liabilities 1.1.05 31.12.05 Assets 1.1.05 31.12.05

Rs. Rs Rs. Rs.

Accounts 25,000 Cash 40,000 30,000

payable 29,000 6,15,000 Debtors 20,000 17,000

Capital 7,39,000 Stock 8,000 13,000

Building 1,00,000 80,000

Other fixed 6,00,000 5,00,000

assets
_______ ________ _______ ________
7,68,000 6,40,000 7,68,000 6,40,000

Additional Information :

(i) There were no drawings :

(ii) There were no purchases or sale of either building or other fixed assets.

Prepare a statement of cash flow:

Or

b) A company purchased 3 years lease on January 1, 2000 for Rs. 25000. It decided to
provide for the replacement of the lease at the end of 3 years by setting up a
depreciation fund. It is expected that investments will fetch interest at 5 %. Table
shows that an annual payment of Re.1 at 5 % compound interest in 3 years
accumulates Rs. 31,525. Investments are made to the nearest rupee. On Jan 1, 2002,
the investments are sold for Rs. 15,250.

Give lease account and depreciation fund account.

 18 a) From the following data, calculate :

(i) P/V ratio

(ii) Profit when sales are Rs.20,000
(iii) New Breakeven point if selling price is reduced by 20 %

Fixed expenses Rs. 4000

Break even sales Rs. 10,000

Or

b) From the following information of product No. 888, calculate :

(i) Material Cost Variance

(ii) Material Price Variance
(iii) Material Usage Variance
(iv) Material Mix Variance
(v) Material sub-usage variance

Material Std. Quantity Sp. Actual quantity AP

Kg Rs. Kg Rs.

X 20 5 24 4
Y 16 4 14 4.50
Z 12 3 10 3.25
48 48

19 a) Explain the factors influencing the pricing and special order pricing decision.

Or
From the following details find out:
(i) Current Assets
(ii) Current Liabilities
(iii) Liquid Assets
(iv) Stock amount ratio 2.5, liquid ratio 1.5 , working capital Rs. 90,000.

20 (a) Explain the variables incorporated in make / buy decision

Or
(b) What are the factors influencing the plant shut down decision? Explain.