PROGRAMME MASTER OF BUSINESS ADMINISTRATION (MBA)

SEMESTER I

COURSE CODE & NAME DMBA104 – FINANCIAL AND MANAGEMENT ACCOUNTING

Section A
Multiple Choice Questions (2 Marks each)
[Please answer all the questions]

1. The rule of debit and credit as regards………… should be ‘debit the receiver and credit the giver’.
a) Personal Account
b) Real Account
c) Nominal Account
d) Capital Account

2. The accounting process concerned with recording of financial information is mainly called as-
a) Auditing
b) Bookkeeping
c) Analyzing
d) Reporting

3. Which of the following is the first step of accounting cycle?

a) Preparation of voucher
b) Preparation of ledger
c) Recording of journal entries
d) Identifying the transactions

4. Subsidiary book prepared to record bills drawn or promissory notes received is called as-
a) Bills receivable book
b) Bills payable book
c) Purchase return book
d) Sales return book

5. Trial balance checks the accuracy of

a) Balance sheet
b) Trading account
c) Cash flow statement
d) Ledger accounts

6. Consider the following statements with respect to profit and loss account and identify true
statements.
1. Fright and octroi gets debited in the P&L account.
2. The insurance prepaid amount gets credited in the P&L account.
3. Royalty received gets credited in the P&L account.
4. The audit fee gets debited in the P&L account.
a) Statement 1, 2 and 3 are true.
b) Statement 2, 3 and 4 are true.
c) Statement 1,2 and 4 are true.
d) Statement 1, 3 and 4 are true.

7. Which traditional tool of management accounting helps in critical evaluation of the changes in
working capital?
a) Ratio analysis
b) Fund flow analysis
c) Cash flow analysis
d) Marginal costing

8. Cash Flow Analysis helps us to understand whether the __________ and __________ decision taken
by the company during the year are appropriate or not.
a) Investing and operating
b) Investing and financing
c) Single competition level, multiple competition level
d) Standard competition level, flexible competition level

9. In a flexible budget, classification of expenses is done on the basis of-

a) Administrative, selling and factory expenses
b) Direct, indirect expenses
c) Past and current expenses
d) Fixed, semi variable and variable expenses

10. Which of the below are characteristics of break even point?

a) Point at which firm is on no profit no loss
b) Total revenue= Total cost
c) Contribution= Fixed cost
d) All of the above
 Section B
SHORT ANSWERS (5 Marks each)
[Please answer Any Four questions ]

a) Enumerate any three accounting principles with appropriate examples.

b) Explain fund flow analysis. How important it is to analyze the flow of fund in a business?
c) Discuss the importance of costing and also describe any two methods of both job costing and process
costing.
d) Prepare Trial Balance from the following information:
Capital Rs.20,800; Rent Outstanding Rs.1,420; Amount due to Vinod Rs.15,000; Drawings Rs.2,800;
Goodwill Rs.12,000; Interest Received Rs.2,000; Discount Received Rs.1,580; Amount due from David
Rs.26,000.
e) Enter the following transactions in the Cash book with Cash and Bank Columns: -
2016 Rs.
June 1 Cash in Hand 800
Cash at Bank 5,700
June 7 Received a cheque from Bharti 3,250
June 9 Deposited the above cheque into bank
June 12 Paid to Bhavna by cheque 2,425
June 15 Bharti’s cheque returned dishonoured
June 20 Withdrew from bank for office use 250
June 25 Cheque received from Panna Lal 1,200
June 28 Panna Lal’s cheque was endorsed in favour of Kamal
June 30 Paid Income Tax by cheque 150
June 30 Bank Charges 30

f) Pass journal entries for following transactions:

(1) January 1: Business started with capital of Rs. 80000
(2) January 2: Cash purchases of Rs. 1500
(3) January 3: Cash sales of Rs. 1000
(4) January 8: Goods purchased from Ram of Rs. 3000
(5) January 12: Goods sold to Shyam worth Rs. 1500
(6) January 16: Paid to Ram Rs. 3000
(7) January 25: Received from Shyam Rs. 1000
(8) January 30: Wages paid Rs. 5000
(9) January 31: Rent paid for shop Rs. 2000

Section C
LONG ANSWERS (10 Marks each)
[Please answer Any Three questions]

1. The account of ABC manufactures ltd. for the year ended 31st December 2010 show the following:
Stocks of materials on 1/1/2010 6,720
Materials purchased 1,50,000
Materials returned to suppliers 2,000
Direct labour 50,000
 Direct expenses 20,000
Factory expenses 15,300
Office & admn. expenses 8,000
Selling & distribution expenses 7,900
Stocks of materials on 31/12/2010 7,720
Profit 10,000
Find out
(a) Material Consumed

(b) Prime Cost

(c) Works Cost

(d) Cost of Production

(e) Total Cost and

(f) Sales.

2. On the basis of balances obtained from the ledger of Mohan Lal for the year ended 31March 2007,
prepare his Trading and Profit & Loss A/c and balance sheet as on above date.
Rs.
Proprietor's Capital Account 1,19,400
Proprietor's Drawings Account 10,550
Bills Receivable 9,500
Plant and Machinery 28,800
Wages 40,970
Salaries 11,000
Sundry Debtors 62,000
Sundry Creditors 59,630
Loan (Credit) 20,000
Return Inward 2,780
Purchases 2,56,590
Sales 3,56,430
Commission Received 5,640
Discount Allowed 5,870
Rent & Taxes 5,620
Stock on 1st April, 2006 89,680
Travelling Expenses 1,880
Insurance 400
Cash 530
Bank 18,970
Repairs 3,370
Bad Debts 3,620
Fixture and Fittings 8,970
Additional Information:
Closing Stock Rs 1,28,960

3. Elaborate different dimensions of balance score card. How does the Balanced Scorecard help in
improving performance?
4. From the following data, prepare a common size statement on Mini ltd.:
Particulars 31st March 2014 31st March 2013
Share Capital 1,50,000 1,20,000
Reserve & Surplus 30,000 30,000
Trade Payables 20,000 40,000
Fixed Tangible Assets 2,00,000 1,90,000