RAJIV GANDHI COLLEGE OF ENGINEERING AND TECHNOLOGY

DEPARTMENT OF MANAGEMENT STUDIES

Course File

Subject code /
MBAH014 / Accounting for Branch MBA
Subject Managers
Subject
Mrs. Hemalatha. M Year / Sem I Year / I Sem
Teacher

RGCET Vision and Mission

VISION
 To be in the forefront of higher education in order to give India the high-caliber manpower
she needs

MISSION
 To provide quality collegiate education from undergraduate to post-doctoral programmes.
 To ensure a high standard of behaviour and discipline amongst the student community.
 To create a climate of joyful learning.
 To impart skills to students that will make them successful in their endeavors.
 To provide meaningful industrial education, research, and training at all levels.
 To offer a wide range and flexibility of options especially in the areas of non-formal and
continuing education.
 To set a high standard of professional conduct and ethics for faculty and students

Department Vision and Mission

VISION
• To create better managers of tomorrow by sharpening the managerial skills and
analytical talents of students for a successful future through modern pedagogical
methods.

MISSION
 • To impart qualities and skills to students for career growth and employment
opportunities.
• To provide meaningful industrial education, research, and training at all levels.
• To set a high standard of personal conduct and ethics for staff and students.

Name of the Faculty Member: Mrs. Hemalatha. M

College Name: RGCET
Department/Program: MBA
Course Name: Accounting for Managers
PROGRAMME EDUCATIONAL OBJECTIVES (PEOs)
Provide sound basic leadership understanding that will assist the learners to better
PEO 1
plan, make decisions and solve problems
PEO 2 Develop excellent communication, interpersonal and social skills
PEO 3 Strengthen the entrepreneurial, creative and innovative abilities
PEO 4 Instill research culture, curiosity for learning and innovation
PEO 5 Ensure high ethical standards in all circumstances
Apply relevant management tools and techniques in complex multi-disciplinary global
PEO 6
business situations for effective and efficient decision-making
PROGRAM OUTCOMES (POs)

Evolve as a good leader who will be able to handle the complexities in the business
PO 1
environment
PO 2 Mold into proactive leaders who are well prepared to face potential challenges
PO 3 Communicate fluently with all the stakeholders of the business for better networking
 PO 4 Frequently interact and maintain amiable status with the stakeholders and competitors
PO 5 Strive for the constant and stable development of business as well as oneself
Instill the importance of training and development as part and parcel of one’s business
PO 6
life
PO 7 Develop an eye for research so as to stay ahead in a highly competitive market
PO 8 Encourage creativity, out of the box thinking and discharge the same at the workplace
PO 9 Make ethics a part of the organizational culture
PO 10 Prioritize ethical well-being over the economic well-being of the organization
PO 11 Apply the theoretical knowledge in practical problem solving and decision making
PO 12 Implement a scientific approach to systematic and critical thinking
PROGRAM SPECIFIC OUTCOMES (PSOs)

PSO 1 Ability to lead and manage any particular organization/business

PSO 2 Interact frequently with stakeholders and share necessary information continuously
Train employees regularly to keep up with the constantly changing business
PSO 3
environment
Research and implement new methodologies as and when required keeping ethics in
PSO 4
mind
PSO 5 Always adopt scientific procedures while making decisions and solving problems
Syllabus

ACCOUNTING FOR MANAGERS

OBJECTIVES
• To acquaint the students with the fundamentals principles of financial, cost and management
accounting.
• To enable the students to prepare, analyse and interpret financial statements.
• To enable the students to take decisions using management accounting tools.

METHODOLOGY FOR COVERING SYLLABUS

1) Class Room teaching of each of the units followed by regular exercises and surprise tests.
2) One practical assignment on ‘Accounting for SBEs” and its presentation by students.
3) Case Study - Analysis of Company Annual Report & application of marginal costing 4) Training on
Tally Package

UNIT-I
Book-keeping and Accounting – Meaning – Definition – Objectives of Financial Accounting –
Branches of Accounting: Financial, Cost and Management Accounting – Accounting Concepts and
conventions – journal – Ledger – Trial Balance – Preparation of Final Accounts: Trading, Profit and
Loss Account and Balance Sheet (problems) – Accounting Standards – Groups interested in
Accounting Information – An Introduction to Tally Package – salient features – types of vouchers –
reports generated by Tally.
UNIT-II
Capital and Revenue Expenditure – Deferred Revenue Expenditure – Capital and Revenue Receipts –
Depreciation – Definition – Causes – Necessity of providing for depreciation – Methods of
Calculating Depreciation: Straight Line Method and Written Down Value Method – Problems.
UNIT-III
Financial Statements – Meaning – Types of financial Analysis – Techniques of Financial Analysis –
Ratio Analysis – Profitability Ratios – Coverage Ratios – Turnover Ratios – Financial Ratios – Ratios
to Financial Statement (problems) – uses and limitations of Ratio Analysis – Funds Flow Analysis
(simple problems) – uses and limitations – Cash Flow Analysis (simple problems) – uses and
limitations – Difference between funds flow and cash flow analysis.
UNIT-IV
Marginal costing – assumptions – Cost Volume Profit Analysis – Breakeven Analysis – Key Factor –
Profit Planning (problem) – Decisions involving Alternative Choices: Determination of sales mix,
exploring new markets and Make or Buy decisions (Problem for case study) 18
UNIT-V
Concept of cost – Elements of Cost – Cost Accounting – Objectives – Cost Sheet (Problems) –
classification of cost – Cost Unit and Cost Centre – Methods of Costing – Techniques of Costing.
TEXT BOOKS:
1. N. Vinayakam & B. Charumathi: Financial Accounting, S. Chand
2. S.N. Maheswari: Management Accounting, Sultan Chand

REFERENCES
1. Hingorani, Ramanathan & Grewal: Management Accounting, Sultan Chand
2. R.N. Anthony: Management Accounting – Text and cases, Irwin
3. B.K. Bhar: Cost Accounting, Academic Publishers
4. H.G. Guthman: Analysis of Financial Statements, Prentice Hall

WEB RESOURCES
1. www.accountingformanagement.com
2. http://www.business.com/directory/accounting/software/
3. www.icai.org
4. www.icsi.edu
5. www.icwai.org

ILLUSTRATED EXERCISES
1. Tally practical record and examination – 15 marks
2. Practical assignment on Accounting by Small Business Enterprises and presentation of the same in
the class – 5 marks
3. Submission of assignment on IFRS and accounting standards – 5 marks
4. Brain storming session on Emerging Trends in Accounting – 5 marks

AFM COURSE OBJECTIVES (COs)

Gain a comprehensive understanding of the principles, concepts, and conventions that form
CO 1 the foundation of accounting.
CO 2 Learn to prepare final accounts, including Trading, Profit and Loss Account, and Balance
 Sheet, ensuring adherence to accounting standards.
Understand the concept of depreciation, its causes, and the necessity of providing for it.
CO 3 Learn different methods of calculating depreciation.
Acquire knowledge of financial analysis techniques, including ratio analysis, funds flow
CO 4 analysis, and cash flow analysis.
Understand and apply tools like marginal costing, cost-volume-profit analysis, breakeven
CO 5 analysis, and profit planning in decision-making processes.
Gain insights into the concept of cost, cost accounting objectives, cost sheet preparation,
CO 6 classification of costs, and methods and techniques of costing.

COURSE OUTCOMES (COs)

Demonstrate a thorough understanding of fundamental accounting concepts, principles, and

CO 1 conventions.
Prepare comprehensive financial statements, including Trading, Profit and Loss Account,
CO 2 and Balance Sheet, adhering to accounting standards.
Differentiate between various types of expenditures (capital, revenue, deferred) and
CO 3 manage depreciation effectively.
Apply decision-making tools like marginal costing, cost-volume-profit analysis, and
CO 4 breakeven analysis to make informed business decisions.
Apply various financial analysis techniques, such as ratio analysis, funds flow analysis, and
CO 5 cash flow analysis, to interpret and assess the financial health of an organization.

Mapping of COs with POs and PSOs

P
PO PO PO PO PO PO PO PO PO PO PO PSO PSO PSO PSO PSO
O
2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5
1
CO
3 1 - - 1 - - - - - 2 - 2 1 - - -
1
CO
1 1 1 1 1 - - - - - 2 - 1 2 - - -
2
CO
1 1 1 1 - - - - - - 1 - 1 - - - -
3
CO
1 1 - - - - - - - - 1 - 1 - - - -
4
CO
1 1 - - - - - - - - 1 - 1 - - - -
5
1.
Avg 1 0.4 0.4 0.4 - - - - - 1.4 - 1.2 0.6 - - -
4

LECTURE SCHEDULE

RAJIV GANDHI COLLEGE OF ENGINEERING AND TECHNOLOGY

Pondicherry – 607402
Department of Management Studies
Master of Business Administration

Subject : Accounting for Managers / Elective / MBAH014

Faculty : Mrs. Hemalatha. M Year: 2023
Class : I MBA (I semester) Semester: Odd

Unit Lecture Topics Page No No. of Date of Completion

 Lecture
Required Actual
Hours
An Introduction to Tally Package – salient features
1
– types of vouchers – reports generated by Tally.
Branches of Accounting: Financial, Cost and
1 Management Accounting – Accounting Concepts T1 8 - 20 1
and conventions – journal – Ledger – Trial Balance Websites
journal –Ledger – Trial Balance 2
Preparation of Final Accounts: Trading, Profit and
4
Loss Account and Balance Sheet (problems)
Sub Total 7
Capital and Revenue Expenditure – Deferred
Revenue Expenditure – Capital and Revenue T1 40 - 48 2
Receipts
Depreciation – Definition – Causes – Necessity of
2 providing for depreciation – Methods of Calculating T1 180 - 211 3
Depreciation
Methods of Calculating Depreciation: Straight Line
T1 56 - 57 3
Method Problems.
Written Down Value Method – Problems. T2 40 3

Sub Total 11
Financial Statements – Meaning – Types of
T1
financial Analysis – Techniques of Financial 161 - 174
1
Analysis

Ratio Analysis – Profitability Ratios 2

T1
Coverage Ratios – Turnover Ratios 147 - 160
1

Financial Ratios T1 197 - 198 1

Ratios to Financial Statement (problems) – uses and

T1 199 - 202 5
limitations of Ratio Analysis

3
Funds Flow Analysis (simple problems) 3

T1 106-120

Fund Flow Analysis– uses and limitations – Cash

1
Flow Analysis
Cash Flow Analysis (simple problems) – uses and
limitations – Difference between funds flow and 3
cash flow analysis.
Cash Flow Analysis– uses and limitations – T2 56 - 69
Difference between funds flow and cash flow 1
analysis.
1

Sub Total 19

Marginal costing – assumptions 1

4 Cost Volume Profit Analysis labour.gov.in 2

Breakeven Analysis 2
 Key Factor – Profit Planning (problem) 3
Decisions involving Alternative Choices:
1
Determination of sales mix, exploring new markets
Make or Buy decisions (Problem for case study) 2

Sub Total 11

Concept of cost labour.gov.in 1

Elements of Cost 1

Cost Accounting – Objectives – 1

Cost Sheet (Problems) –. 5

5 classification of cost – 1

Cost Unit and Cost Centre 1

Methods of Costing – 1

Techniques of Costing 1

Sub Total 12

Grand Total 49

Text Title of the Book Author Publisher

T1 Financial Accounting T.S Reddy, A. Murthy Markham

T2 Management Accounting T.S Reddy, Y. Hari Prasad Reddy Markham

T3 Cost Accounting S.P.Jain, K. L. Marang Kalyani

S.No. Assignment title

1 Capital and Revenue Expenditure/ Capital and Revenue Receipts

2 Classifications of Ratio/Cash Flow and Fund Flow

Question Bank Unit Wise

UNIT-I
1. Fundamental Concepts:
 Define bookkeeping and accounting. How do they differ from each other?
 Explain the objectives of financial accounting.
 Discuss the branches of accounting and their respective roles.
2. Accounting Tools:
  What are the basic tools used in bookkeeping, and how do they contribute to
financial record-keeping?
 Describe the purpose and format of a journal. Provide an example of a journal
entry.
3. Final Accounts Preparation:
 Walk through the steps involved in preparing a Trading, Profit and Loss Account,
and Balance Sheet.
 Why is it essential to follow accounting standards during the preparation of
financial statements?
4. Tally Package:
 What are the salient features of the Tally Package?
 Explain the types of vouchers in Tally and their significance.
 Discuss the reports that can be generated using Tally.
5. Accounting Concepts:
 Elaborate on the accounting concepts and conventions. Provide examples for better
understanding.
 How do these concepts contribute to the reliability and consistency of financial
information?
6. Problems:
 Journalise the following transactions, post them into Ledger, balance the accounts and prepare a
Trial Balance :−
2017 (₹)
March 1 Shyam Sunder & Sons commenced business with cash 80,000
2 Purchased goods for cash 36,000
3 Machinery purchased for cash 4,000
4 Purchased goods from :
Raghu 22,000
Dilip 30,000
6 Returned goods to Raghu 4,000
8 Paid to Raghu, in full settlement of his account 17,500
10 Sold goods to Mahesh Chand & Co. for ₹ 32,000 at 5% trade discount
13 Received cash from Mahesh Chand & Co. 19,800
Discount allowed 200
15 Paid cash to Dilip 14,850
Discount received 150
20 Sold goods for cash 25,000
24 Sold goods for cash to Sudhir Ltd. 18,000
25 Paid for Rent 1,500
26 Received for Commission 2,000
28 Withdrew by Proprietor for his personal use 5,000
28 Purchased a fan for Proprietor's house 1,200

UNIT-II:
1. Capital and Revenue Expenditure:
a. Distinguish between capital and revenue expenditures. Provide examples for each.
b. Explain the concept of deferred revenue expenditure. How is it treated in financial
statements?
2. Capital and Revenue Receipts:
a. Define capital and revenue receipts. Provide examples of each.
b. Discuss the impact of capital and revenue receipts on the financial position of a
business.
3. Depreciation:
 a. Define depreciation. Why is it necessary to provide for depreciation in financial
accounting?
b. Explain the Straight Line Method of calculating depreciation. Provide a numerical
example.
c. Contrast the Straight Line Method with the Written Down Value Method in
calculating depreciation.

4. Depreciation Methods:
a. Discuss the Written Down Value Method for calculating depreciation. Provide a
numerical example.
b. Compare and contrast the advantages and disadvantages of the Straight Line
Method and the Written Down Value Method.
5. Application Exercise:
On 1st April, 2015, Shivam Enterprise purchased a second-hand machinery for ₹ 52,000 and
spent ₹ 2,000 on cartage, ₹ 3,000 on unloading, ₹ 2,000 on installation and ₹ 1,000 as
brokerage of the middle man. It was estimated that the machinery will have a scrap value of ₹
6,000 at the end of its useful life, which is 10 years. On 31st December 2015, repairs and
renewals amounted to ₹ 2,500 were paid. On 1st October, 2017, this machine was sold for ₹
30,600 and an amount of ₹ 600 was paid as commission to an agent. Calculate the amount of
annual depreciation and rate of depreciation. Also prepare the Machinery Account for first 3
years, assuming that firm follows financial year for accounting.

UNIT-III
1. Financial Analysis Techniques:
 Enumerate and describe different techniques of financial analysis.
 Why is financial analysis crucial for decision-making within an organization?
2. Ratio Analysis:
 What is ratio analysis, and why is it an important tool in financial analysis?
 Explain profitability ratios, and provide examples of such ratios.
3. Coverage and Turnover Ratios:
 Discuss coverage ratios and their significance in assessing financial risk.
 Explain turnover ratios and how they reflect operational efficiency.
4. Financial Ratios:
 Provide examples of financial ratios and explain their relevance in
evaluating overall financial health.
 How can a company use financial ratios to benchmark its performance
against industry standards?
5. Problems:
Liabilities Rs. Assets Rs.
Equity Share Capital 5,00,000 Land & Building 1,00,000
Preference share capital 2,00,000 Machinery 4,00,000
General Reserve 1,00,000 Furniture 50,000
Secured Loan 3,00,000 Inventory 3,00,000
Sundry Creditors 1,00,000 Sundry Debtors 3,00,000
Cash/Bank Balance 50,000
12,00,000 12,00,000
Calculate Following Ratios from the above balance sheet:
1. Current Ratio
2. Liquid Ratio
 3. Proprietary Ratio
4. Stock Working capital Ratio
5. Capital Gearing Ratio
6. Debt Equity Ratio
6. Funds Flow Analysis:
 Define funds flow analysis and discuss its uses in financial management.
 How does funds flow analysis differ from cash flow analysis?
7. Cash Flow Analysis:
 Define cash flow analysis and discuss its importance in assessing liquidity.
 Illustrate the difference between funds flow analysis and cash flow analysis.
UNIT-IV:
1. Marginal Costing:
 Define marginal costing and list its key assumptions.
 How does marginal costing contribute to decision-making in business?
2. Cost Volume Profit (CVP) Analysis:
 Explain the concept of Cost Volume Profit (CVP) analysis.
 How does CVP analysis assist in understanding the relationship between costs,
volume, and profit?
3. Breakeven Analysis:
 Define breakeven analysis and explain its significance in business planning.
 How is breakeven point calculated, and what does it represent?
4. Key Factor and Profit Planning:
 Discuss the concept of a key factor in CVP analysis and its role in profit planning.
 How can a business utilize key factor analysis to enhance its profitability?
5. Profit Planning (Problems):
 Given a set of data, perform a profit planning analysis using CVP concepts.
 Explain how changes in key factors can impact profit planning in a business
scenario.
Calculate (i) PVR, (ii) BEP, and (iii) Margin of Safety based on the following information:

 Sales = $100,000

 Total cost = $80,000

 Fixed cost = $20,000

 Net profit = 80,000

UNIT-V:
1. Concept of Cost:
 Define the concept of cost and explain its significance in business operations.
  Differentiate between direct costs and indirect costs, providing examples of each.
2. Elements of Cost:
 Identify and discuss the main elements of cost.
 How do the elements of cost contribute to the overall cost structure of a product
or service?
3. Cost Accounting Objectives:
 Enumerate the objectives of cost accounting.
 Explain how cost accounting aids in decision-making within an organization.
4. Cost Sheet:
 Define a cost sheet and explain its components.
 Create a cost sheet for a hypothetical product or service, including all relevant
costs.
5. Classification of Cost:
 Discuss the various classifications of costs, such as fixed costs, variable costs, and
semi-variable costs.
 Provide examples of each type of cost and explain their behavior in relation to
production levels.
6. Cost Unit and Cost Centre:
 Define cost unit and cost centre. How are they determined in different industries?
 Explain how the identification of cost units and cost centres contributes to
effective cost management.
7. Methods of Costing:
 Discuss different methods of costing, such as job costing, process costing, and
activity-based costing.
 Provide examples of industries where each method of costing is most applicable.
8. Techniques of Costing:
 Explain various techniques of costing, including standard costing and marginal
costing.
 How do these costing techniques contribute to cost control and decision-
making?
9. Cost Sheet (problems):
 Prepare a cost sheet for a manufacturing company with given data.
 Discuss how the information from the cost sheet can be utilized for pricing
decisions.
Cost Sheet with Overhead Allocation

A company produces a single product. The following information is available for the month of
February:

 Direct Materials Cost: $15,000

  Direct Labor Cost: $8,000
 Indirect Materials: $2,000
 Indirect Labor: $3,000
 Factory Rent: $4,000
 Units Produced: 500 units
 Units Sold: 400 units

Calculate the cost per unit considering both direct and indirect costs. Prepare a cost sheet.

10. Decision-Making Scenario:

 In a business scenario, explain how cost classifications, costing methods, and
costing techniques can influence strategic decisions.