Pondicherry University 2006 M.B.A ACCOUNTING FOR MANAGERS - Question Paper

Time: 3 hours Maximum: 100 marks

part A –(5 x six = 30 marks)
ans any 5 of the subsequent

1. discuss the accounting principles governing the preparation of Balance Sheet.
2. What is receipts and expenditure account? Does it differ in any way from income
account ? If so mention points of distinction.
3. Enumerate the methods of calculating depreciation.
4. “Costing is an aid to management”. Enumerate the main points in support of this
statement.
5. “The effect of a price reduction is always to decrease the P/V ratio an to raise the
BEP”. discuss.
6. Briefly define the all financial resources concept of funds flow.
7. What procedure would you adopt to study the liquidity of a business firm?
8. Who are all the parties interested in knowing accounting information?
part B – (5 x 10 = 50 marks)
ans any 5 of the subsequent
9. From the subsequent particulars you are needed to prepare a statement showing
(a) The cost of material consumed
(b) Prime Cost
(c) Work Cost
(d) Total Cost and
(e) Cost Of sales and profit
Rs
Stock of finished goods on 31.12.03 73,000
Stock of Raw –Materials on 31.12.03 35,000
Purchase of raw- materials 7,60,000
Productive wages 5,20,000
Stock of finished goods on 31.12.04 82,500
Stock of raw materials on 31.12.04 37,500
Sale of finished of goods 15,45,800
Works overhead charges 1,30,200
Offices and general charges 69,700
10. A company budgets a production of 5,00,000 units at a variable costs of Rs.20
every .The fixed costs are Rs.20,00,000.The Selling price is fixed to yield 25% on
cost. You are needed to compute :
(a) P/V ratio
(b) Break even point
If the selling price is decreased by 20 % obtain
(i) the effect of the price reduction on the BEP and P/V ratio
(ii) the number of units needed to be sold at the decreased selling price to find an
increase of 20% over the budgeted profit
11. From the subsequent info ,prepare a summarized balance sheet as on 31st
March
Rs
Working capital 1, 20,000
Reserves and surplus 80,000
Bank overdraft 20,000
Asset (fixed ) to proprietary ratio .75
Current ratio 2.5
Liquid ratio 1.5
12. A manufacturing company purchased on first January 2001 ,a 2nd hand plant
for Rs. 30,000 and immediately spent Rs 20,000 on overhauling it .On first July 2001,
additional machinery costing Rs. 25,000 was purchased .On first July 2003, the plant
purchased on first January 2001 became obsolete and was sold for Rs.10,000.On that
date a new machinery was purchased at a cost of Rs 60,000
Depreciation was given for annually on 31st December, at the rate of 10 %
per annum on the original cost of asset .In 2005 ,how ever the company changed
this method of providing depreciation and adopted the method of writing off 15% on
diminishing value.
Show the machinery account for the years 2001 to 2005 (both inclusive).
13. How Cost Accounting is various in techniques and procedures from financial
accounting and management accounting.
14. How is contribution in marginal costing important? discuss briefly its role in profit
maximisation and fixation of selling price decisions.
15. explain the importance of ratio analysis for inter-firm and intra-firm comparisons
including circumstances responsible for its limitations .If any.
16. discuss the accounting standards which are applicable to a company.

part C - (1X20=20 marks)

(Compulsory)
17. On 31st March 2004, the subsequent trial balance of R.Rama was taken out
.Prepare final accounts for the year after making the subsequent adjustments :
(a) Depreciation :5 % of plant and machinery and 10 % of fixtures and fittings
(b) Reserve for bad debts two ½ % on sundry debtors.
(c) Insurance unexpired on 31st March 2004 Rs. 70
(d) Outstanding wages Rs 800 and salaries Rs 350.
Trial Balance
Dr Balances Rs
Plant and Machinery 55,000
Fixtures and Fittings 1,720
Fuel and Power 542
Office Salaries 3,745
Lighting (factory) 392
Traveling expenses 925
Carriage on sales 960
Cash at Bank 2,245
Cash in Hand 68
Sundry debtors 47,800
Purchases 66,710
Wages 9,915
Rent and Rates 1,915
Offices expenses 2,778
Carriage on Purchases 897
Discount 422
Drawings account 6,820
Stock on 1.4.03 21,725
Manufacturing expenses 2,680
Sales returns 7,422
Insurance 570
Closing Stock 16,580
Cr. Balances Rs.
Rent outstanding 150
R. Rama’s Capital 93,230
Sales 1, 26,177
Sundry Creditors 22,680
Purchases returns 3,172
Bills payable 6,422

Earning:   Approval pending.