Printed Pages: 03 Sub Code: KMB103

Paper Id: 270103 Roll No.

MBA
(SEM 1) THEORY EXAMINATION 2018-19
FINANCIAL ACCOUNTING FOR MANAGERS
Time: 3 Hours Total Marks: 100
Note: 1. Attempt all Sections. If require any missing data; then choose suitably.

SECTION A

1. Attempt all questions in brief. 2 x 10 = 20

a. What is Book-Keeping?
b. What do you understand by trade discount and cash discount?
c. What is an open entry? Give an example.
d. Explain Convention of Conservatism.
e. What are Accounting Standards?
f. Define IFRS.
g. What is Profit and Loss Appropriation Account?
h. Define Trend Analysis.
i. What do you understand by working capital?
j. What is the difference between Gross Profit and Net Profit Ratio?
SECTION B

2. Attempt any three of the following: 10 x 3 = 30

a. What is an accounting equation? Explain various elements of accounting
equation with example.
b. Explain the process of issuing various accounting standard in India.
c. What are final accounts? Explain their usefulness to various users of
accounting information.
d. Discuss various market capitalisation ratios. Also explain uses of these ratios.
e. “Cash flow analysis helps in short-term planning by the management.”
Elaborate.

SECTION C
3. Attempt any one part of the following: 10 x 1 = 10
(a) “Accounting concepts acts as guidelines to accountant in preparing the
accounts.” Explain the statement in the light of various accounting concepts.
(b) What is depreciation? Explain various reasons and uses of charging
depreciation.
4. Attempt any one part of the following: 10 x 1 = 10
(a) What are international Accounting standards? How can we match them with
Indian Accounting Standards?
(b) Explain the concept of Human resources Accounting. Discuss the importance
of Human Resource Accounting.
5. Attempt any one part of the following: 10 x 1 = 10
(a) Journalize the following transactions, of April, 2018. in the books of Mr. Sunil.
1. Assets: Furniture Rs. 10,000; Machinery Rs. 12,000; Stock of goods Rs.
5,000; Cash in hand Rs. 75,000; Cash at bank Rs. 10,000; Ramesh & Co. (owe)

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 Rs. 1,000 and the amount due from Suresh Rs. 2,000.
Liabilities: Amount due to Rama Rs. 4,500;
Amount due to Chatterjee Rs. 5,000;
Amount due to Mukherjee Rs. 5,000.
3. Bought goods of the list price of Rs. 15,000 from Sohan less 10% trade
& 2% cash discount and paid 50% at the same time.
5. Purchased goods for Rs. 2,00,000
9. Paid life insurance preimum Rs. 1000
15. Salary due to clerk Rs. 100
19. Paid salaries by cheque Rs. 100
22. Provide depreciation on Machinery @ 10% for one month.
28. Received commission Rs. 3000
30. Ramesh & Co. became insolvent, nothing could be recovered from his
estate
31. Paid municipal taxes Rs. 100

(b) The following Trial Balance is extracted from the books of a merchant on 31 st
December, 2007:

Particulars Amount Rs. Amount Rs.

Furniture and Fittings 2,000
Motor Vehicles 18,250
Buildings 8,500
Capital Account 28,858
Bad Debts 125
Provision for Bad Debts 200
Sundry Debtors and
Creditors 3,800 2,500
Stock on January 1, 2007 4,460
Purchase and Sales 6,475 16,450
Bank Overdraft 2,850
Sales and Purchase Returns 200 125
Advertising 450
Interest (On Bank Overdraft) 118
Commission 375
Cash 650
Taxes and Insurance 2,250
General Expenses 780
Salaries 3,300

51,358 51,358

6. Attempt any one part of the following: 10 x 1 = 10

(a) What is Ratio Analysis? Explain its usefulness and limitations.

(b) From the following particulars extracted from the financial statements of XYZ & Co.,
compute the current turnover ratio, liquid ratio, inventory ratio, debtor’s turnover
ratio and creditor’s turnover ratio.

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 Amount Amount
Particulars (Rs.) Particulars (Rs.)
Opening Stock 47,000 Sundry debtors 42,000
Closing stock 10,000 Cash 53,000
Sales less returns 2,52,000 Bank 8,000
Provision for bad debts 2,000 Bills receivables 15,000
Sundry creditors 32,000 Provision for taxation 15,000
Loose tools 4,000 Bills payable 29,000
Purchases 1,80,000 Marketable securities 8,000

7. Attempt any one part of the following: 10 x 1 = 10

(a) What are Funds? Discuss Various factors that determine the level of working capital in a
firm.
(b) Balance Sheets of X and Y on 1.1.2017 and 31.12.2017 were as follows:
Balance Sheet
Liabilities 1.1.17 31.12.17 Assets 31.12.17
Amount Amount 1.1.17 Amount
(Rs.) (Rs.) Amount (Rs.) (Rs.)
Creditors 40,000 44,000 Cash 10,000 7,000
Mrs. X's loan 25,000 - Debtors 30,000 50,000
Loan from
bank 40,000 50,000 Stock 35,000 25,000
Capital 1,25,000 1,53,000 Machinery 80,000 55,000
Land 40,000 50,000
Building 35,000 60,000
2,30,000 2,47,000 2,30,000 2,47,000
During the year, a machine costing Rs. 10,000 (accumulated depreciation Rs. 3,000)
was sold for Rs. 5,000. The provision for depreciation against machinery, as on
1.1.2017 was Rs. 25,000, and on 31.12.2017 it was Rs. 40,000. Net profit for the year
2017 amounted to Rs. 45,000. You are required to prepare a cash flow statement.

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 KMB103 CORRECTION M 15.12.2018
Note : Q. No. 5 (a) and 5 (b) should be read as follows:
5. Attempt any one part of the following: 10 x 1 = 10
(a) Journalize the following transactions, of April, 2018. In the books of Mr. Sunil.
1. Assets : Furniture Rs. 10,000; Machinery Rs. 12,000; Stock of goods Rs.
5,000; Cash in hand Rs. 75,000; Cash at bank Rs. 10,000; Ramesh & Co. Rs.
1,000 and the amount due from Suresh Rs. 2,000.
Liabilities : Amount due to Rama Rs. 4,500;
Amount due to Chatterjee Rs. 5,000;
Amount due to Mukherjee Rs. 5,000.
2. Bought goods of the list price of Rs. 15,000 from Sohan less 10% trade
& 2% cash discount and paid 50% at the same time.
3. Purchased goods for Rs. 2,00,000
4. Paid life insurance preimum Rs. 1000
5. Salary due to clerk Rs. 100
6. Paid salaries by cheque Rs. 100
7. Provide depreciation on Machinery @ 10% for one month.
8. Received commission Rs. 3000
9. Ramesh & Co. became insolvent, nothing could be recovered from him
10. Paid municipal taxes Rs. 100

(b) The following Trial Balance is extracted from the books of a merchant on 31st
December, 2007. Prepare Final Account.

Particulars Amount Rs. Amount Rs.

Furniture and Fittings 2,000
Motor Vehicles 18,250
Buildings 8,500
Capital Account 28,858
Bad Debts 125
Provision for Bad Debts 200
Sundry Debtors and
Creditors 3,800 2,500
Stock on January 1, 2007 4,460
Purchase and Sales 6,475 16,450
Bank Overdraft 2,850
Sales and Purchase Returns 200 125
Advertising 450
Interst (On Bank Overdraft) 118
Commission 375
Cash 650
Taxes and Insurance 2,250
General Expenses 780
Salaries 3,300

51,358 51,358

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