MANAGEMENT ACCOUNTING

Course Description:

Management is increasingly adopting latest financial tools in making strategic decisions. Though the
uncertainty in business environment is increasing, the available data for making decision is also
increasing at an extremely high rate. The learner should also be able to analyse and judge the financial
statements of listed companies and make decisions accordingly. Costing, budgeting, variance analysis,
cost volume profit analysis are some tools, which help managers to make sound decisions backed by
actual data.

PART-I

PRE-REQUISITES:

Introduction to Accounting and Final Accounts of Sole Proprietor & Corporation

(a) Meaning, Objectives, Advantages, Users of accounting Concepts and Conventions
(b) Double entry system, Accounting Equations
(c) Journal Entries, Ledger and Trial Balance
(d) Depreciation Accounting
(e) Preparation of final accounts of Sole proprietor and Corporations according to Schedule III of
Companies act 2013

MODULE – I (4 HOURS)

Content:

1. Different adjustment entries like Closing stock, outstanding expenses, prepaid expenses,
outstanding income. (Session-1)

2. Pre- received income, provision for bad and doubtful debts, Appropriation of Goods.
(Session-2)
Learning Objective:
(a) To understand the meaning and nature of Trial balance
(b) To understand how to prepare trial balance
(c) To have thorough understanding of format of final accounts of sole proprietor.
(d) To understand need for Adjustment Entries and different adjustment entries

MODULE – II (8 HOURS)

Content:

1. Preparation of final accounts of Sole Proprietor firm with adjustment entries

(Session-3)
2. Practice of final accounts of Sole Proprietor firm with adjustment entries, with various
numerical problems (A) (Session-4)

3. Practice of final accounts of Sole Proprietor firm with adjustment entries, with various
numerical problems (B) (Session-5)

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4. Practice of final accounts of Sole Proprietor firm with adjustment entries, with various
numerical problems(C ) (Session-6)

Learning Objective:
(a) To have thorough understanding of format of final accounts of sole proprietor.
(b) To understand need for Adjustment Entries and different adjustment entries

MODULE – III (4 HOURS)

Content:

1. Depreciation – Meaning, importance , (Incorporating the latest amendments for calculation

of depreciation) Methods of depreciation – SLM (Session-7)

2. Methods of depreciation – WDV (Session-8)

Learning Objective:

To understand various types of depreciation methods and to find out profit / loss from sale of an
asset, based on two methods – SLM and WDV.

MODULE – IV (8 HOURS)
Content:
1. Company Final Accounts – Meaning, Format as per schedule III of companies act 2013
(Incorporating the latest amendments) (Session-9)
2. Preparation of statement of Income Statement with Trial Balance, Preparation of Balance sheet
from Trial Balance (Session-10)

3. Practice Problems of Company’s Final Accounts (Balance Sheet & Income Statement from
Trial balance, without adjustments) (Session-11)
4. Understanding of company final account with an example of any listed company’s latest annual
report (Case study) (Session-12)

Learning Objective:
(a) To understand Schedule III format for preparation of final accounts of Companies.
(b) To prepare company final accounts from the given trial balance.

Total (24 Hours)

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 PART-II

CONTENT:
UNIT-I

1. Cash flow statement of Corporation (9 Hours)

(a) Introduction to different types of accounting with focus on Management & Cost
Accounting (1.5 Hours)

(b) Introduction to Company’s Final Accounts & Annual Report with focus on Cash
Flow Statement according to Accounting Standard (1.5 Hours)

(c) Preparation and Analysis of Cash Flow Statements (6 Hours)

Analysis of Cash Flow Statement of a chosen company

Case Study Presentation –I

UNIT-II

2. Analysis of Financial Statements using Ratios (6 Hours)

(a) Financial Statement Analysis through various techniques like Common Size, Trend &
Ratio Analysis- importance and limitations (1.5 Hours)

(b) Calculation and interpretation of ratios (Profitability, solvency, liquidity, activity,

shareholders’ ratios), DuPont Analysis, Altman’s Z score for bankruptcy prediction
(3 Hours)
(c) Projected Balance Sheet & Profit and loss account from Ratios (1.5 Hour)

Case Study Presentation –II

ASSIGNMENT
UNIT -III

3. Cost accounting, Costing & Budgeting (6 Hours)

(a) Introduction of Costing, Cost Unit, Cost Centre, Elements of Cost (Material, Labour,
Overheads), Preparation of Cost Sheets and Projection/estimation of Cost/ Tender Quotations
(3 Hours)
(b) Budgets, Budgetary Cost Control (Fixed & Flexible Budget, Zero Based Budgeting)
& Variance Analysis (3 Hours)

Case Study Presentation –III

Class Test (20 Marks): (It covers from Topic/Unit no 1 to 3 of the syllabus)
UNIT-IV

4. Marginal Costing- Cost Volume Profit Analysis (6 Hours)

(a) Classification of cost into variable and fixed components, Meaning of Contribution,

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 Situations where preference given to Marginal Costing over Absorption Costing
(1.5 Hours)
(b) Profit Volume ratio, Breakeven Point, Margin of safety, graphical presentation
(4.5 Hours)
QUIZ & PRESENTATION

Case Study Presentation –IV

UNIT-V

5. Analysis for Decision Making (10.5 Hours)

Short Term Decision Making based on various Management Accounting Techniques (Differential
Costing, Marginal Costing & Relevant Costing) for the following situations/ cases

(a) Fixation of selling price (1.5 Hour)

(b) Make or buy decision (1.5 Hour)

(c) Export sales & Exploring new markets (1.5Hour)

(d) Product mix decisions (1.5 Hour)

(e) Decisions based on key factor & others (1.5 Hour)

(f) Recent Development e.g. Activity Based Costing, Balanced Score Card, Theory of
Constraints, Life Cycle Costing, Responsibility Accounting etc. (3 Hours)

Case Study Presentation –V

Total (24+37.5 Hours)

Text Book: (Part-I)
1. Basic Accounting -CA (Dr.) K.M. Bansal & Dr. Ritu Gupta - Taxman Publications Pvt Ltd.

Text Book: (Part-II)

1. Cost and Management Accounting, M N Arora – Himalaya Publishing House ISBN 978-93-
5262-071-5

Reference Book
1. Accounting: Texts and Cases by Anthony R, Hawkins D, Merchant K A, McGraw Hill, 13th
Indian Edition.
2. Management Accounting: Text, Problems and Cases by Khan & Jain, Tata McGraw Hill, 6th
Edition
3. Advanced Management Accounting: Text, Problems And Cases, 4/e - Jawaharlal , S Chand,
ISBN 9789352533084
4. Managerial Accounting: Tools for Business Decision Making, by Jerry J. Weygandt , Paul D.
Kimmel, Donald E. Kieso, 8e Wiley
5. Advanced Management Accounting – Robert S Kaplan and Anthony A. Atkinson, Third
edition, Pearson New International Edition 2014
6. Managerial Accounting, John Willey & Sons; James Jiambalvo (2009).
7. Cost & Management Accounting, 7th Edition, CI (Emia), Colin Drury (2011).
8. Cost Accounting- A Managerial Emphasis, Pearson Charles T. Horngren( 2012).

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