S.No.

1504 19UBA08/
19UBX09
(For the candidates admitted from 2019–2020 onwards)

B.B.A./B.B.A. (CA) DEGREE EXAMINATION,

JANUARY 2022.

Fourth Semester

MANAGEMENT ACCOUNTING

Time : Three hours Maximum : 75 marks

PART A — (15 × 1 = 15 marks)

Answer ALL questions.
Choose the correct answers :

1. The primary goal of management accounting is

–––––––––––––.
(a) Interpret the financial data
(b) Record all business transaction
(c) Provide information for planning
(d) Provide the costing information

2. The application of management accounting is

______________________.
(a) Compulsory (b) Optional
(c) Obligatory (d) Reliable
3. Management accounting deals with
________________.

(a) Determination of cost

(b) Determination of profit

(c) Determination of bad debts

(d) Determination of quantitative value

4. Difference between current asset and current

liabilities is known as ____________.

(a) Working Liability

(b) Capital fluctuation

(c) Working capital

(d) Capital fund

5. Building sold on credit is ___________.

(a) Source of fund

(b) Application of fund

(c) Liability of fund

(d) Sources of fund

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6. Net profit earned plus non working capital
expenses is equal to _______________.
(a) Fund provided by operation
(b) Application of fund
(c) Sinking fund
(d) Net value fund
7. The cash flow statement classify cash flow from
__________________
(a) Operating activities
(b) Investing activities
(c) Financing activities
(d) All the above
8. Cash flow statement is a part of
__________________
(a) Financial statement
(b) Marginal statement
(c) Costing statement
(d) Standard statement
9. Cash flow statement is useful for ______________.
(a) Short term financing
(b) Long term financing
(c) Fixed term financing
(d) Account term financing
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10. ____________ is defined as the indicated quotient
of two mathematical expression.
(a) Costing (b) Working capital
(c) Ratio analysis (d) Auditing

11. Turn over ratio helps management in

__________________.
(a) Managing resources
(b) Managing debts
(c) Evaluating performance
(d) Credit facilities

12. Long term solvency ratio is the same

as__________________.
(a) Current ratio
(b) Acid test ratio
(c) Operating ratio
(d) Debt-equity ratio

13. Sales budget is a _____________

(a) Functional budget
(b) Master budget
(c) Expenditure budget
(d) Cash budget

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14. The difference between fixed and variable cost
is___________.
(a) Expenditure ratio
(b) Budgeting
(c) Flexible budget
(d) Marginal value

15. _____________ is the summary budget for the

entire company.
(a) Master budget (b) Budget manual
(c) Budget period (d) Flexible budget

PART B — (2  5 = 10 marks)

Answer any TWO questions.

16. Differentiate between management accounting

and cost accounting.

17. Prepare a Statement of changes in Working

Capital from the following Balance Sheets of Ram
Seth Company:
Balance Sheet as on 31st December
Liabilities 2009 2010 Assets 2009 2010
Rs. Rs. Rs. Rs.
Equity 5,00,000 5,00,000 Fixed 6,00,000 7,00,000
Capital Assets
Debentures 3,70,000 4,50,000 Long-term 2,00,000 1,00,000
Investments

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Tax 77,000 43,000 Work-in- 80,000 90,000
Payable progress
Creditors 96,000 1,92,000 Stocks 1,50,000 2,25,000
Interest 37,000 45,000 Debtors 70,000 1,40,000
Payable
Dividend 50,000 35,000 Cash 30,000 10,000
Payable
11,30,000 12,65,000 11,30,000 12,65,000

18. Discuss the uses of cash flow statement.

19. Calculate debt-equity ratio from the following:

Rs.
Total Assets 2,60,000
Total Debt 1,80,000
Current Liabilities 20,000

20. From the following particulars, prepare a

Production Budget of a Company for the year
ended June 30, 2010.
Product Sales (Units) (as per Estimated Stock
sales Budgets) (units)
1 July 31 June
2009 2010
A 1,50,000 14,000 15,000
B 1,00,000 5,000 14,500
C 70,000 8,000 8,000

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 PART C — (5  10 = 50 marks)
Answer ALL questions, choosing either (a) or (b).

21. (a) Determine the objectives of Management

Accounting.
Or
(b) Differentiate Management Accounting from
Financial Accounting.

22. (a) From the following information relating to

A Ltd., prepare Funds Flow Statement:
Particulars 2009 2010 Particulars 2009 2010
Rs. Rs. Rs. Rs.
Share Capital 300 400 Cash 30 90
Reserve 100 50 Accounts Receivable 105 150
Retained Earnings 30 60 Inventories 150 195
Accounts Payable 45 135 Fixed Assets 190 210
475 645 475 645

Additional information:
(i) The company issued bonus shares for
Rs. 50,000 and for cash Rs. 50,000.
(ii) Depreciation written off during the year
Rs. 15,000.
Or

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 (b) Ramco Cements presents the following
information and you are required to calculate
funds from operations.
Profit and Loss Account
Rs. Rs.
To Operation 1,00,000 By gross 2,00,000
Expenses profit
To Depreciation 40,000 By Gain 20,000
on sale
of plant
To Loss on sale of 10,000
Building
To Advertisement 5,000
Suspense account
To Discount Allowed 500
To Discount on Issue 500
of shares written off
To Goodwill written 12,000
off
To Net Profit 52,000
2,20,000 2,20,000

23. (a) Compare cash flow with fund flow

statements.
Or

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 (b) Calculate Cash from Operating Activities
from the following:
Rs.
Net Loss after Adjustment 1,40,000
Depreciation 32,000
Preliminary Expenses Written off 10,000
Goodwill Written off 12,000
Provision for Doubtful Debts 8,000
Commission accrued 16,000
Dividend Received 26,000
Outstanding Wages 12,000

24. (a) From the data, calculate:

(i) Gross Profit Ratio
(ii) Net Profit Ratio
(iii) Return on Total Assets
(iv) Inventory Turnover
(v) Working Capital Turnover
Sales Rs. 25,20,000
Cost of Sales Rs. 19,20,000
Net Profit Rs. 3,60,000
Inventory Rs. 8,00,000
Other Current Assets Rs. 7,60,000
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 Fixed Assets Rs. 14,40,000
Net Worth Rs. 15,00,000
Debt Rs. 9,00,000
Current Liabilities Rs. 5,00,000
Or
(b) From the data given below compute:
(i) Working Capital
(ii) Net Capital Employed
(iii) Current Ratio
(iv) Acid Test Ratio
(v) Debt-equity Ratio
CROMPTON LTD. as on 31st December
Liabilities Rs. Assets Rs.
Equity Share 25,000 Fixed Assets 30,000
Capital
Preference Share 5,000 Current Assets:
Capital
Reserves and 4,000 Stores 2,000
Surplus
Debentures 8,000 Sundry Debtors 1,000
Bank Loan 4,000 Cash 500
Sundry Creditors 1,000 Bank 2,500
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Proposed 1,000 Preliminary 8,000
Dividends Expenses
Provision for 2,000 Brokerage on 2,000
Taxation shares
Stock 4,000
50,000 50,000

25. (a) From the following forecasts of income and

expenditure prepare a cash budget for the
three months commencing 1st June, when the
bank balance was Rs. 1,00,000.
Sales Purchases Wages Factory Expenses Admin. And
Selling expenses
Rs. Rs. Rs. Rs. Rs.
April 80,000 41,000 5,600 3,900 10,000
May 76,500 40,500 5,400 4,200 14,000
June 78,500 38,500 5,400 5,100 15,000
July 90,000 37,000 4,800 5,100 17,000
August 95,000 35,000 4,700 6,000 13,000

A sales commission of 5 per cent on sales, due

two months after sales, is payable in addition
to selling expenses. Plant valued at
Rs. 65,000 will be purchased and paid for in
August, and the dividend for the last
financial year of Rs. 15,000 will be paid in
July. There is a two month credit period
allowed to customers and received from
suppliers.
Or

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(b) A company at present operating at
80% capacity produces and sells 40,000 units.
Below given are expenses per unit.
Per Unit
Rs.
Direct material 15
Direct Labour 10
Factory over head (30% fixed) 5
Office over head (60 % variable) 3
Selling over head (50% fixed) 2
Selling Price 45
Prepare a budget at 90% capacity.

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