M.Com. (Semester III) (CBCS) Examination Mar/Apr-2018
MANAGEMENT ACCOUNTING (Paper III)
Time: 2½ Hours
Max. Marks: 70
Instructions: All questions are compulsory. Figures to the right indicate full marks.
Q.1
Choose the correct answer among the alternatives given for each question.
14
Sale of long term investment indicates
Sources of funds
Application of funds
Change in current assets
None
Balance sheet shows financial position of the business for a particular
Day
Year
Period
Month
Financial statements reports to the end users information.
Quantitative
Factual financial
Market
Economic
Accounting assist the management to carry out the function.
Management
Financial
Cost
None
is considered to be the eye and brain of management.
Chief
Cost
Management
Financial
Management Accounting is meant for
Management
Financial Accountant
Shareholders
Stakeholders
working capital is required to be kept always on hand.
Minimum
Maximum
Large
Essential
Current asset less current liabilities means working capital.
Net
Variable
Gross
Fixed
Operating profit to sales gives ratio.
Gross Profit
Operating profit
Net profit
Notional Profit
10) Turnover ratio helps management in
Managing resources
Managing debts
Evaluating performance
None
11) Cash flow statement is based on
Accrual basis of accounting
Cash basis of accounting
and
None
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SLR-CX-40
12) Increase in a fixed asset due to purchase is
Source of funds
Use of funds
Application of funds
None
13) Stock in the beginning results in the
Application of funds
Sources of funds
No flow of funds
None
14) Stock at the end results in the
Application of funds
Sources of funds
No flow of funds
None
Q.2
Write short note on:
14
Objectives of management accounting.
Cash flow statement.
Q.3
From the following information prepare statement showing working capital requirements.
07
Budgeted Sales
Rs. 2,60,000 p.a.
Analysis of one rupee of sales
Rs.
Raw material
0.30
Direct Labour
0.40
Overhead
0.20
0.90
Profit
0.10
Sales
1.00
It is assumed that:
Raw material is carried in stock for 3 weeks and finished goods for 2 weeks
Factory processing will take 3 weeks
Suppliers will give five weeks credit
Customers will require 8 weeks credit. It may be assumed that production and overheads accrue evenly throughout the year.
The current assets and current liabilities of your company as at 30.06.2017 were Rs. 16 lakhs and Rs. 8 lakhs respectively. Calculate the effect of purchase of new machinery for Rs. 5 lakhs on cash on delivery.
07
Q.4
Following are the Balance Sheets of as at 31st March 2016 and 31st March 2017.
14
2015-16
2016-17
Liabilities:
Share Capital: 10,000 share of Rs. 10 each
1,00,000
1,00,000
Profit and loss a/c
6,000
8,000
Bank over draft
16,000
50,000
Loan against mortgage of Building

20,000
Sundry creditors
20,000
60,000
1,42,000
2,38,000
Assets:
Land and building
30,000
60,000
Plant and machinery 50,000
60,000
Depreciation up to date 12,000
38,000
18,000
42,000
Vehicle 11,500
12,400
Depreciation 5,500
6,000
8,400
4,000
Stock
22,000
72,000
Debtors
46,000
60,000
1,42,000
2,38,000
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SLR-CX-40
During the year 2016-17 the company purchased a building for Rs. 30,000 out of which amount or Rs. 10,000 was paid cash and for the rest, building was mortgaged to the seller. During the year 2016-17 a dividend of 10% was distributed to the shareholders.
On 1st April 2016 a Vehicle which originally cost Rs. 2,000 and showing book value of Rs. 1000 was sold for Rs. 1600.
You are required to prepare a statement of Cash Flow for the year 2016-17 showing particulars of your working details.
OR
What is the basic purpose in compiling a statement of sources and application of funds? Explain four sources of funds and four applications of funds.
14
Q.5
From the following Balance sheet of Raj Limited compute:
Debt Equity ratio
Funded debt to total capitalization ratio
Fixed Assets to net worth ratio
Current assets to proprietors fund ratio
14
Balance sheet
Liabilities
Rs.
Assets
Rs.
Equity share capital
3,00,000
Goodwill
90,000
preference Share capital
1,50,000
Land and building
1,00,000
Reserve fund
50,000
Plant and Machinery
2,50,000
Profit and loss A/c
20,000
Equipment
60,000
Share premium
10,000
Furniture and fitting
80,000
Debenture
2,00,000
S. Debtors 1,00,000
mortgage loan
60,000
Less: Dep. 10,000
90,000
Sundry creditors
80,000
Bills Receivable
1,00,000
Income tax provision
20,000
Stock in hand
1,20,000
Depreciation Fund
50,000
Cash balance
45,500
Prepaid insurance
1,500
Preliminary expenses
2,000
Discount on issue of debentures
1,000
9,40,000
9,40,000
OR
Explain the term management accounting. Distinguish between management accounting and financial accounting.