Total No. of Questions: 6 Total No. of Printed Pages:4 [4]

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1 [4] d) Interest debited by the bank on Jun 06 but no advice received 4000 e) Amount wrongly debited by the bank 400 f) Dividend collected by the bank not recorded in cash book 6000 g) Directly deposited by customer 000 Q.5 i. Write a note on Cost Concept. ii. What is Cost Accounting? Briefly explain different methods of Costing. OR ii. Following details are available for two successive years for a product. Particulars Year Year Sales Profit Calculate P/V ratio, Fixed Cost, BEP, Amount of Profit if Sales are Rs , Sales in Rs. when desired Profit is Rs and margin of safety for both the years. Q.6 i. What are the different objectives of Management Accounting? Explain any three. ii. From the following balance sheet of X Ltd., prepare Cash flow statement. Liabilities Assets Capital Building Profit & loss Plant Sundry Stock creditors Bills payable Debtors Cash at Bank Dividend paid during the year 00 is Rs The changes in building and plant value are due to depreciation. OR ii. From the given information of a company prepare the balance sheet. Receivable turnover ratio 4, payable turnover ratio 5, inventory turnover ratio 8, capital turnover ratio, fixed assets turnover ratio 8, gross profit ratio 5%, gross profit for the year Rs Reserve & surplus Rs. 8000, Closing stock was Rs. 000 more than opening stock. There is no long term loan or OD. ****** Total No. of Questions: 6 Total No. of Printed Pages:4 Enrollment No... Faculty of Management End Sem (Odd) Examination Dec-06 MS5CO0 Accounting for Managers Programme: MBA Branch/Specialisation: Management Duration: Hrs. Maximum Marks: 60 Note: All questions are compulsory. Internal choices, if any, are indicated. Q. i. Which of the following concept assume that business will last indefinitely? a) Business entity b) Going concern c) Periodicity d) Conservatism ii. The process of preparing the ledger is called a) Journalising b) Posting c) Balancing d) Totalling iii Management accounting involves a) Preparation of final statement b) Analysis and interpretation of data c) Recording of transaction d) Assisting the management in performing its function effectively iv Management accounting is highly sensitive to a) Management needs b) Investors needs c) Government needs d) Consumer needs v Bank reconciliation statement is a) A part of cash book b) A part of pass book c) A statement prepared by bank d) A statement prepared by customer vi In which of the following methods, the amount of depreciation remains the same throughout: a) Fixed Installment Method b) Diminishing Balance Method c) Fixed and Diminishing Balance Methods d) Neither Fixed nor Diminishing Balance Method vii Patent is a/an a) Current asset b) Intangible fixed asset c) Tangible fixed asset d) Investment viii Major objective of cost accounting is to ascertain a) Cost b) Profit c) Loss d) Planning ix cost consists of costs of direct material, direct labour and direct expenses. a) Fixed b) Variable c) Direct d) Prime PTO

2 x [] A business has assets of Rs and liability of Rs Capital is a) b) 5600 c) 5600 d) None of these Q. i. Define Accounting. Explain rules of debit and credit. ii. Pass the Journal entries for the following transactions: Jan 0, 05 Raj, the proprietor of the business brought in cash of Rs and furniture of Rs to start the business. Jan 0, 05 Purchased goods for Rs in cash. Jan, 05 Cheque received from Shyam of Rs and allowed him a discount of Rs. 00. Jan, 05 Purchased a Building of Rs in cash. Jan, 05 Sold goods to Ramesh for Rs at a trade discount of 0% and availed a cash discount of 5% on half of the bill amount by making the payment immediately. Jan 4, 05 Salary paid Rs Jan 8, 05 Goods given as free sample of Rs OR ii. Prepare a three column cash book from the following. Jan 0, 04 Cash in hand Rs and Bank O.D. Rs Jan 05, 04 Salary paid by cash Rs Jan 09, 04 Cash sales of goods worth Rs on 0% Trade discount and 5% Cash discount. Jan, 04 Deposited the amount of above sale in Bank a/c. Jan, 04 Purchased goods worth Rs. 000 and paid by Cheque. Jan 4, 04 Received a Cheque of Rs from Mr. X in full settlement of Rs. 450 and deposited in the bank on the same day. Jan 5, 04 Bank charged Rs. 80 as bank charges and interest credited Rs. 0. Q. i. What is trial balance? Write down different methods of preparation of trial balance. ii. What do you mean by final account? Explain the adjustments related to depreciation, bad debt, pre-paid expenses, outstanding expenses and accrued income in detail. OR ii. The following is the Trial Balance of Mr. Shyam as on Mar 05: Particulars Dr. (Rs.) Cr. (Rs.) Machinery Cash in hand 000 Cash at bank 680 Return Outwards 000 Return Inwards 60 Carriage on Purchases 4080 [] Sales 400 Purchase 80 Opening Stock 500 Building Carriage on sales 6400 Furniture 5000 General Expenses 6000 Insurance 00 Capital 000 Drawing 0490 Sundry Debtors 000 Sundry Creditors 600 Wages 040 Salary Total Taking into account the following adjustments, prepare Trading and Profit and Loss Accounts and also Balance Sheet on Mar 05.. Stock as on Mar 05 is Rs Machinery is to be and 0%.. Salaries for the month Mar 05 amounting to Rs were unpaid. 4. Insurance included a premium of Rs. 00 for the next year. 5. A provision for doubtful debts is to be created to the extent of 0% on sundry debtors. Q.4 i. What are the reasons for difference in cash book and pass book balances? ii. A company purchased a Machine on Jan, 0 for Rs and spend Rs. 000 on its installation. On Jul 04 company purchased another Machine for Rs and in Jul 05 it sold off st Machine for Rs and bought another for Rs On Jul 06 second Machine was sold for Rs Depreciation provided on machine at the rate of 0% P.A. on the original cost on Dec annually. In 04, the company changed method of depreciation and adopted the WDV method at the rate of 5% P.A. with retrospective effect. Prepare the Machinery account for 4 years commencing from the date of acquisition of machine. OR ii. Prepare a Bank reconciliation statement as on 0 Jun 06 from the information given below: a) Bank Balance as per cash book as on 0 Jun b) Cheques issued on 0 Jun 06 but not yet presented 4000 c) Cheque deposited but not yet credited by the bank 050 PTO

3 Model Solution / Scheme of Marking Q. i. Which of the following concept assume that business will last indefinitely? a) Business entity b) Going concern c) Periodicity d) Conservatism B ii. The process of preparing the ledger is called a) Journalising b) Posting c) Balancing d) Totalling B iii Management accounting involves a) Preparation of final statement b) Analysis and interpretation of data c) Recording of transaction d) Assisting the management in performing its function effectively B or D iv Management accounting is highly sensitive to a) Management needs b) Investors needs c) Government needs d) Consumer needs A v Bank reconciliation statement is a) A part of cash book b) A part of pass book c) A statement prepared by bank d) A statement prepared by customer D vi In which of the following methods, the amount of depreciation remains the same throughout: a) Fixed Installment Method b) Diminishing Balance Method c) Fixed and Diminishing Balance Methods d) Neither Fixed nor Diminishing Balance Method A vii Patent is a/an a) Current asset b) Intangible fixed asset c) Tangible fixed asset d) Investment B viii Major objective of cost accounting is to ascertain a) Cost b) Profit c) Loss d) Planning A ix cost consists of costs of direct material, direct labour and direct expenses. a) Fixed b) Variable c) Direct d) Prime D x. A business has assets of Rs and liability of Rs Capital is a) b) 5600 c) 5600 d) None of these B Q. i. Define Accounting. Explain rules of debit and credit. Definition Enumeration of three rules Explanation of each. Pass the Journal entries for the following transactions: Jan 0, 05 Raj, the proprietor of the business brought in cash of Rs and furniture of Rs to start the business. Jan 0, 05 Purchased goods for Rs in cash. Jan, 05 Cheque received from Shyam of Rs and allowed him a discount of Rs. 00. Jan, 05 Purchased a Building of Rs in cash. Jan, 05 Sold goods to Ramesh for Rs at a trade discount of 0% and allowed a cash discount of 5% on half of the bill amount by making the payment immediately

4 Jan 4, 05 Salary paid Rs Jan 8, 05 Goods given as free sample of Rs Every entry with narration marks and without narration 0.5 marks Date Particulars Debit Amt Credit Amt --5 Cash A/c Dr Furniture A/c Dr To Raj s Capital A/c or Capital A/c (Being the investment of cash and furniture by Raj to start the business) --5 Purchase A/c Dr To Cash 0000 (Being the purchase of goods on cash) --5 Bank A/c Dr Discount A/c Dr. 00 To Shyam 0000 (Being cheque received from Shyam Rs and allowed him discount of Rs. 00) --5 Building A/c Dr To Cash (Being building purchased in cash) --5 Ramesh A/c Dr To Sales 8000 (Being goods sold to Ramesh Rs at a trade discount of 0%) --5 Cash A/c Dr Discount A/c Dr. 450 To Ramesh 9000 (Being cash received for half of the bill amount and allowed 5% CD on thereof and balance amount is unpaid) OR --5 Cash A/c Dr Discount A/c Dr. 450 Ramesh A/c Dr To Sales 8000 (Being goods sold to Ramesh Rs at a trade discount of 0% and cash received for half of the bill amount and allowed 5% CD, balance amount is unpaid) 4--5 Salary A/c Dr To Cash/Bank 5000 (Being Salary paid by Cash/Cheque) 8--5 Free sample / Advertisement A/c Dr To Purchase A/c 5000 (being goods given as free sample) OR ii. Prepare a three column cash book from the following. Jan 0, 04 Cash in hand Rs and Bank O.D. Rs Jan 05, 04 Salary paid by cash Rs Jan 09, 04 Cash sales of goods worth Rs on 0% Trade discount and 5% Cash discount. Jan, 04 Deposited the amount of above sale in Bank a/c. Jan, 04 Purchased goods worth Rs. 000 and paid by Cheque. Jan 4, 04 Received a Cheque of Rs from Mr. X in full settlement of Rs. 450 and deposited in the bank on the same day. Jan 5, 04 Bank charged Rs. 80 as bank charges and interest credited Rs. 0.

5 Every correct transaction marks Date Particular L/F Dis Cash Bank Date Particular L/F Dis Cash Bank --4 To balance b/d By balance b/d To Sales A/c By Salary A/c To Cash A/c C By Bank A/c C By Purchase A/c To Mr. X To interest A/c By Bank Charges By balance c/d To balance b/d Q. i. What is trial balance? Write down different methods of preparation of trial balance. Meaning of trial balance Method Enumeration any two ii. What do you mean by final account? Explain the adjustments related to depreciation, bad debt, pre-paid expenses, outstanding expenses and accrued income in detail. Meaning of final account Explanation of each adjustment with example mark/ without example 0.5 each 5 OR iii. The following is the Trial Balance of Mr. Shyam as on Mar 05: Particulars Dr. (Rs.) Cr. (Rs.) Machinery Cash in hand 000 Cash at bank 680 Return Outwards 000 Return Inwards 60 Carriage on Purchases 4080 Sales 400 Purchase 80 Opening Stock 500 Building Carriage on sales 6400 Furniture 5000 General Expenses 6000 Insurance 00 Capital 000 Drawing 0490 Sundry Debtors 000 Sundry Creditors 600 Wages 040 Salary Total Taking into account the following adjustments, prepare Trading and Profit and Loss Accounts and also Balance Sheet on Mar 05.. Stock as on Mar 05 is Rs Machinery is to be and 0%.. Salaries for the month Mar 05 amounting to Rs were unpaid. 4. Insurance included a premium of Rs. 00 for the next year. 5. A provision for doubtful debts is to be created to the extent of 0% on sundry debtors. Each adjustment mark(total 5); Trading and Profit and Loss account preparation mark; Balance sheet marks

6 Trading and Profit and Loss Account of Mr. Shyam for the year ended --5 Rs. Rs. Rs. Rs. To Opening Stock 500 By Sales 400 To Purchases 80 Less: Return Less: Return By closing stock 400 To Carriage on Purchase 4080 To Wages 040 To Gross Profit tfd To Carriage on sale 6400 By Gross Profit b/d 00 To General Expenses 6000 To Insurance (00-00) 000 To Salary ( ) To Depreciation Machinery 5000 To Depreciation Furniture 000 To Provision for Debts 00 To Net Profit 40 Balance Sheet of Mr. Shyamas on --5 Liabilities Rs. Assets Rs. Capital 000 Building Add: Net Profit 40 Machinery Less: Drawing Less: Depreciation Furniture 5000 Less: Depreciation Sundry Creditors 600 Sundry Debtors 000 Less: Outstanding Salary 4500 Closing Stock 400 Cash in Hand 000 Cash in Bank 680 Prepaid Insurance Q.4 i. What are the reasons for difference in cash book and pass book balances? Minimum three reason each mark ii. A company purchased a Machine on Jan, 0 for Rs and spend Rs. 000 on its installation. On Jul 04 company purchased another Machine for Rs and in Jul 05 it sold off st Machine for Rs and bought another for Rs On Jul 06 second Machine was sold for Rs Depreciation provided on machine at the rate of 0% P.A. on the original cost on Dec annually. In 04, the company changed method of depreciation and adopted the WDV method at the rate of 5% P.A. with retrospective effect. Prepare the Machinery account for 4 years commencing from the date of acquisition of machine.

7 Machinery Account Date Particular Amt Date Particular Amt -- To Bank/Cash (a) By Depreciation 5000 ( ) By Balance c/d To Balance b/d (a) By Depreciation (a) To Bank (b) 0000 By P & L (Change in method) 500 By Depreciation (b) 500 By Balance (a) 65 By Balance (b) To Balance b/d (a) By Depreciation (a) 09 To Balance b/d (b) 8500 By Bank To Bank/Cash (c) 5000 By P & L (a) By Depreciation (b) 5 By Depreciation (c) 85 By Balance (b) 55 By Balance (c) To Balance (b) By Depreciation (b) 9 To Balance (c) 5 By Bank 000 By P & L (b) By Depreciation (c) 469 By Balance (c) OR ii. Prepare a Bank reconciliation statement as on 0 Jun 06 from the information given below: a) Bank Balance as per cash book as on 0 Jun b) Cheques issued on 0 Jun 06 but not yet presented 4000 c) Cheque deposited but not yet credited by the bank 050 d) Interest debited by the bank on Jun 06 but no advice received 4000 e) Amount wrongly debited by the bank 400 f) Dividend collected by the bank not recorded in cash book 6000 g) Directly deposited by customer 000 One mark each for correct transaction Bank Reconciliation Statement as on Balance as per cash book (Dr.) Cheques issued on 0 Jun 06 but not yet presented Cheque deposited but not yet credited by the bank Interest debited by the bank on Jun 06 but no advice received Amount wrongly debited by the bank Dividend collected by the bank not recorded in cash book Directly deposited by customer 000 Balance as per passbook (Cr.) 850 Q.5 i. Write a note on Cost Concept. Meaning of Cost concept Explanation ii. What is Cost Accounting? Briefly explain different methods of Costing. Meaning and explanation of Cost Accounting Any five methods (one mark each) 5

8 OR ii. Following details are available for two successive years for a product. Particulars Year Year Sales Profit Calculate P/V ratio, Fixed Cost, BEP, Amount of Profit if Sales are Rs , Sales in Rs. when desired Profit is Rs and margin of safety for both the years. One mark each for both correct (formula and answer) and 0.5 each if only formula is correct P/V ratio = (Change in Profit / Change in Sales)*00 = (6000/0000)*00 =0% Fixed Cost = Sales x PV ratio Profit = 0000*0% = 8000 BEP = Fixed cost / PV ratio = 8000 / 0% = Amount of Profit if Sales are Rs Profit = Sales * PV ratio * Fixed cost = 00000*0%*8000 = 4000 Sales in Rs. when desired Profit is Rs Sales = (Fixed cost + Desired Profit) / PV ratio = ( ) / 0% = 0000 Margin of safety MOS I year = Actual Sales BE Sales = = MOS II year = = 0000 Q.6 i. What are the different objectives of Management Accounting? Explain any three. One mark for each objective ii. From the following balance sheet of X Ltd., prepare Cash flow statement. Liabilities Assets Capital Building Profit & loss Plant Sundry creditors Stock Bills payable Debtors Cash at Bank Dividend paid during the year 00 is Rs The changes in building and plant value are due to depreciation. Format of Cash flow statement Operating Activity Investing Activity Finance Activity Cash flow statement of X Ltd. Particular Amount. Cash flow from operating activity Difference between opening and closing balance of P & L (4500) ( ) Add: Depreciation on building 0000 Depreciation on Plant 5000 Dividend Paid 0000 Decrease in Debtors 5000 Decrease in Stock 4000 Less: Decrease in creditors (4500) Decrease in Bills Payable (000) Cash flow from operating activity 4000

9 . Cash flow from investing activity NIL. Cash flow from finance activity (0000) 4. Net Increase / Decrease in Cash and Cash Equivalent 4000 Add: Cash and Cash equivalent at the beginning Cash and Cash equivalent at the end of period 4000 OR ii. From the given information of a company prepare the balance sheet. Receivable turnover ratio 4, payable turnover ratio 5, inventory turnover ratio 8, capital turnover ratio, fixed assets turnover ratio 8, gross profit ratio 5%, gross profit for the year Rs Reserve & surplus Rs. 8000, Closing stock was Rs. 000 more than opening stock. There is no long term loan or OD. One mark for each item of balance sheet GP Ratio = (GP / Sales) * 00 ; 5 = (40000 / Sales) * 00; Sales = COGS = Sales GP = = 0000 Receivable turnover Ratio = Total Sales / Receivables; 4 = / Receivables; Receivables = Inventory Turnover Ratio = COGS / Average Stock; 8 = 0000 / Average Stock; Average Stock = 5000 Average Stock = (Opening Stock + Closing Stock) / ; 5000 = (X + (000+X)) / ; X = 4500 i.e. Opening Stock and Closing Stock = 5500 COGS = Opening stock + Purchase Closing Stock; 0000 = 4500+Purchase- 5500; Purchase = 000 Creditor Turnover Ratio = Purchase / Creditors; 5 = 000/Creditors; Creditors = 400 Fixed Asset Turnover Ratio = Sales / Fixed Assets; Fixed Assets = 0000 Capital Turnover Ratio = Sales / Capital; Capital = Balance Sheet Liabilities Rs. Assets Rs. Capital Fixed Assets 0000 Reserve and Surplus 8000 Debtors Creditors 400 Closing Stock 5500 Cash(Balancing Figure)