VALLIAMMAI ENGINEERING COLLEGE
DEPARTMENT OF MANAGEMENT STUDIES
BA7106-ACCOUNTING FOR MANAGEMENT QUESTION BANK
Year and Semester
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I I SEMESTER (ODD)
BA7106 ACCOUNTING FOR MANAGEMENT
1) L. SUJATHA 2) M.GANESAN @ KANAGARAJ
Unit - I - Part - A Question
Define Accounting.
Compare trade discount and cash discount.
How do you show your understanding about cost concept?
Categorize the forms of assets and liabilities.
Discuss Accounting Rules.
Interpret the usage of Financial Accounting.
What is Inflation Accounting?
Compare Tangible assets and Intangible Assets.
Identify any four accounting conventions.
What do you think about GAAP?
How is adjustments applied to solve final accounts?
How would you evaluate the need for human resource accounting?
Define Accounting cycle.
Compare gross profit and net profit.
Give some example for usage of management accounting.
How would you deal closing stock in final accounts?
What is Balance Sheet?
Classify any four concepts of Accounting.
Define Trail Balance.
What is meant by Journal?
Level
BTL 1
BTL 2
BTL 3
BTL 4
BTL 5
BTL 6
BTL 1
BTL 2
BTL 3
BTL 4
BTL 5
BTL 6
BTL 1
BTL 2
BTL 3
BTL 4
BTL 1
BTL 2
BTL 1
BTL 1
Unit - I - Part - B Question
How would you prepare trail balances from the following ledger balances:
Details
Rs.
Details
Rs.
Opening stock
30000
Purhcases
300000
Closing stock
14000
Debtors
120000
Cash
3000
Discount allowed
3400
Bank
5600
Creditors
90000
Sales
420000 Salaries
42000
Rent
9000
Postage
5600
Taxes
1500
Machinery
120000
Drawings
20000
Capital
152000
Purchases Returns
6000
Salaries Returns
9000
How would you explain various accounting principles, concepts and
conventions?
Examine the need for accounting for human resources and the approaches
to its valuation.
Discover from the following are the balances extracted from the books of
Deepak as on 31st December 2015. Prepare Final accounts as on the date.
Details
Rs.
Details
Rs.
Capital
20000
Drawings
5000
Cash on hand
5000
Cash at Bank
8000
Level
BTL 1
BTL 2
BTL 3
BTL 4
VALLIAMMAI ENGINEERING COLLEGE
DEPARTMENT OF MANAGEMENT STUDIES
BA7106-ACCOUNTING FOR MANAGEMENT QUESTION BANK
Buildings
20000
Machinery
Stock on 1.1.2015
3000
Sundry Debtors
Sundry Creditors
6000
Repairs
Commission Paid
700
Wages
Rent and Rates
300
Insurance Premium
Purchases
60000
Sales
Purchases Returns
750
Sales Returns
Furniture and
1600
Carriage
Fixtures
Loan to Ram
1000
Telephone Charges
Discount Allowed
50
Salaries
Baddebts
350
Discount earned
Categorize the different methods of valuation of inventories.
Journalize the following Transactions:
Date
Details
01.01.2015
Bought goods on credit from Raju
02.01.2015
Goods Returned by Murthy
03.01.2015
Paid Carriage
04.01.2015
Received cash from Govind
05.01.2015
Paid Insurance Charges
06.01.2015
Sale of type writer
07.01.2015
Sold goods to Hari
08.01.2015
Commission received in cash
6000
8000
400
1700
300
96000
400
200
250
600
100
BTL 5
Rs.
200
25
50
500
50
250
150
200
BTL 6
What are the functions of Financial Accounting explain in detail?
BTL 1
Compare profit and loss account and balance sheet using an illustration.
Construct a Ac c o u n t i n g plan for activities to be carried out by
managers in recent times highlighting the current trends.
Analyze the inflation accounting in detail.
BTL 2
10
List the main branches of accounting with their significances.
BTL 1
11.
Accounting is the Language of business.Elucidate
12.
Explain the steps in the process of accounting in detail.
13.
From the following trail balance, prepare trading, profit & loss account for
the year ended 31-12-2015 and a Balance sheet as on that date:
Debit
Rs.
Credit
Rs.
Purchases
11870
Capital
8000
Debtors
7580
Bad debts recovered
250
Return inwards
450
Creditors
1250
Bank deposit
2750
Return outwards
350
Rent
360
Bank overdraft
1570
Salaries
850
Sales
14690
Travelling expenses
300
Bills payable
1350
Cash
210
Stock
2450
Discount allowed
40
8
9
BTL 3
BTL 4
VALLIAMMAI ENGINEERING COLLEGE
DEPARTMENT OF MANAGEMENT STUDIES
BA7106-ACCOUNTING FOR MANAGEMENT QUESTION BANK
14.
Drawings
600
TOTAL
27460
TOTAL
27460
Adjustments:
The closing stock on 31-12-2015 was Rs.4200
Write off Rs.80 as bad debts and create a reserve for bad debts at 5% on
sundry debtors
3 months rent is outstanding.
The following balances were extracted from the books of Prasad on 31st
March 1994.
Details
Rs.
Details
Rs.
Capital
50,000
Creditors
5,000
Drawings
4,000
Bad debts
1100
General Expenses
5,000
Loan
15760
Buildings
22,000
Sales
130720
Machinery
18,680
Purchases
94000
Stock
32,400
Motor Car
4000
Power
4,480
Reserve Fund (Cr.)
1800
Taxes & Insurance
2630
Commission (Cr.)
2640
Wages
14400
Car Expenses
3600
Debtors
12560
Bills Payable
6700
Bank Overdraft
6600
Cash
160
Charity
210
Stock on 31st March 1994 was valued at Rs.47,000. Prepare the final
Accounts for the year ended on 31st march 1994
Q.No
Unit - I - Part - C Questions
1
What is the nature of Accounting? In what ways accounting information is
useful to creditors, Investors and employees of a business enterprise?
2
Journalize the following transactions and post them into ledger.
Date
(March
2016)
Details
Level
BTL 1
Rs.
1
Ali commenced business with cash
10000
2
Paid into Bank
8000
3
Bought goods for cash
500
4
Bought Furniture for office
400
5
Drew from Bank cash for office use
1000
6
Goods sold to Khan
600
7
Bought goods from Ali
400
8
Paid trade expenses
100
9
Paid to ali on account
400
10
Received cash from Khan
600
11
Paid Rent
200
12
Cash sales
12000
From the following particulars of Mrs.S prepare a trading and profit and
loss account and Balance sheet for the year ending 31st march 2016.
Particulars
Debit (Rs.)
Credit
(Rs.)
Capital
750000
BTL 2
BTL 3
VALLIAMMAI ENGINEERING COLLEGE
DEPARTMENT OF MANAGEMENT STUDIES
BA7106-ACCOUNTING FOR MANAGEMENT QUESTION BANK
cash
40000
buildings
400000
Salary
110000
Rent & Taxes
21000
Opening Stock
120000
Machinery
120000
Drawings
40000
Purchases
500000
Sales
750000
Carriage inwards
5000
Fuel, Gas
37000
Sundry Debtors
250000
Sundry Creditors
120000
Bills Receivables
53000
Dividend Received
28000
Loan
60000
Bad debts
2000
Advertisement
16000
Reserves
6000
TOTAL
1714000
1714000
ADJUSTMENTS:
Closing stock Rs.140000
Write off Rs.10,000 depreciation
Salaries outstanding is Rs.10000
Rs.1,000 of advertisement relates to the next accounting year
Transfer Rs.4000 to reserves.
From the following trail balance of Ravi, prepare trading and profit and loss
account for the year ended December 31st 2015 and a balance sheet as on
that date:
Particulars
Debit (Rs.)
Credit (Rs.)
Capital
40,000
Sales
25,000
Purchases
15000
Salaries
2000
Rent
1500
Insurance
300
Drawings
5000
Machinery
28,000
Bank Balance
4500
Cash
2000
Stock 1-1-2016
5200
Debtors
2500
Creditors
1,000
TOTAL
66,000
66,000
Adjustments Required:
Stock on 31-12-2015 Rs.4900
Salaries Unpaid Rs.300
Rent paid in advance Rs.200
Insurance prepaid Rs.90
BTL 4
VALLIAMMAI ENGINEERING COLLEGE
DEPARTMENT OF MANAGEMENT STUDIES
BA7106-ACCOUNTING FOR MANAGEMENT QUESTION BANK
VALLIAMMAI ENGINEERING COLLEGE
DEPARTMENT OF MANAGEMENT STUDIES
BA7106-ACCOUNTING FOR MANAGEMENT QUESTION BANK
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Unit - II - Part - A Question
What is a company?
Differentiate Profit and loss account and Profit and loss appropriation
account.
How would you show your understanding of Buy back of shares?
List any two methods of alteration of share capital.
Can you assess the value or importance of Shares?
Interpret the need for capital reduction.
Define company accounts. What are its characteristics?
How would you explain forfeiture of shares?
Give an imaginary profit and loss appropriation account of a limited
company.
How do you analyze interim dividend?
What are the components of final accounts of Joint stock company?
What do you meant by Dividend?
What is your opinion of Goodwill?
What are the methods of valuation of shares of a company?
How company final accounts are prepared?
List the factors to be considered for valuating the goodwill
Can you make a distinction between failure mode and failure effects?
What is ESOP?
Compare between the capital reduction scheme and a reorganization
scheme for reconstruction.
Analyze the rules in provision on buy back of shares.
Define Share.
Level
BTL 1
BTL 2
BTL 3
BTL 4
BTL 5
BTL 6
BTL 1
BTL 2
BTL 3
BTL 4
BTL 1
BTL 1
BTL 2
BTL 3
BTL 4
BTL 5
BTL 6
BTL 1
BTL 2
BTL 3
BTL 1
Unit - II - Part - B Question
What is preferential allotment and explain its procedure?
A limited company issued 10, 000 equity shares of Rs. 10 each payable as
under Rs.2 on application, Rs.5 on allotment, Rs. 3 on final call. The pubic
applied for 8000 shares which were allotted. All the money due on shares was
received except the final call on 100 shares. These shares were forfeited and reissued at Rs. 8 per share. Show the Journal Entries in the books of the
company.
A limited company issued 10000 equity shares of Rs.10 each, payable Re.1 on
application, Rs.2 on allotment, Rs.3 on first call. All shares were subscribed
and amounts duly received. Pass entries in the books of the company.
Mona Earth Mover Ltd. Decided to issue 12,000 shares of Rs.100 each payable
at Rs.30 on application, Rs.40 on allotment, Rs.20 on first call and balance on
second and final call. Applications are received for 13,000 shares. The
directors decided to reject application of 1000 shares and their application
money being refunded in full. The allotment money is duly received on all the
shares, and all sums due on calls are received except on 100 shares.
Record the transactions in the books of Mona earth mover ltd.
Level
BTL 1
BTL 2
BTL 3
BTL 4
VALLIAMMAI ENGINEERING COLLEGE
DEPARTMENT OF MANAGEMENT STUDIES
BA7106-ACCOUNTING FOR MANAGEMENT QUESTION BANK
BTL 5
BTL 6
Define a company and state its essential characteristics.
BTL 1
What is a preference share? Describe the different types of preference shares.
BTL 2
10
11
12
13
14
Q.No.
1.
2.
Discuss the employees stock option scheme and its financial implications to
the company.
Eastern company Ltd. Issued 40,000 shares of Rs.10 each to the public for the
subscription of its share capital, payable at Rs.4 on application, Rs.3 on
allotment and the balance on 1st and final call. Applications were received for
40,000 shares. The company made the allotment to the applicants in full. All
the amounts due on allotment and first and final call were duly received. Give
the journal entries in the books of the company.
Explain the terms Over subscription and under-subscription. How are they
dealt with in accounting records?
Explain in brief the main categories in which the share capital of a company is
divided.
Discuss the process for the allotment of shares of a company in case of over
subscription.
Discuss the provisions relating to Buy-back of securities under the companies
Act, 1956.
Cronic Limited issued 10,000 equity shares of Rs.10 each payable at Rs.2.50
on application, Rs.3 on allotment, Rs.2 on first call, and the balance of Rs.2.50
on the final call. All the shares were fully subscribed and paid except of a
shareholder having 100 shares who could not pay for the final call. Give
journal entries to record these transactions.
Rohit and company issued 30,000 shares of Rs.10 each payable Rs.3 on
application, Rs.3 on allotment and Rs.2 on first call after two months. All
money due on allotment was received, but when the first call was made a
shareholder having 400 shares did not pay the first call and a shareholder of
300 shares paid the money for the second and final call of Rs.2 which had not
been made as yet.
Give the necessary journal entries in the books of the company.
Describe the provisions of law relating to Calls in Arrears and Calls in
advance
Unit - II - Part - C Question
A Ltd. Offered 100,000 equity shares of nominal value of Rs.10 each for public
subscription at Rs.12. The amount payable on the shares were shares were on
application Rs.450; on allotment (including premium)Rs.4.50; on first and final
call Rs.3.00 The actual subscription was only for 90,000 shares. All money
payable by shareholders was received from sudhakar who had taken 1,000
shares but failed to pay the final call. His shares were forfeited and reissued to
Prabhakar at Rs.6 each. Show journal entries in the books of the company in
respect of the above (including cash transactions).
Mohan company Ltd., was incorporated on 30th June 2005 to take over the
business of K.Mohan as from 1st January 2015. The financial accounts for the
year ended 31st December 2015.
Particulars
Rs.
Rs.
Sales:
January to June
120,000
BTL 3
BTL 4
BTL 1
Level
VALLIAMMAI ENGINEERING COLLEGE
DEPARTMENT OF MANAGEMENT STUDIES
BA7106-ACCOUNTING FOR MANAGEMENT QUESTION BANK
July to December
180,000
Total
Less: Purchases:
January to June
July to December
3,00,000
75000
120,000
195,000
1,05,000
3.
4.
Gross Profit
Less: Salaries
15000
Selling expenses
3000
Depreciation
1500
Directors remuneration
750
Debenture Interest
90
Administration Expenses(Rent, Rates etc.)
4500
24840
Balance
80,160
You are request to prepare a statement apportioning the balance of profit
between the periods prior to after incorporation and show the profit and loss
appropriation account for the year ended 31st December 2015.
Poornima Ltd., incorporated in April 1, 2008, with a capital of Rs.50,000 in
equity shares of Rs.10 each took over the running business of poornima as
from January 1, 2008. The purchase price Rs.20,000 was settled on July 1,
2008, together with interest at 10% per annum by fully paid shares for
Rs.17500 and the balance by cheque.
To companys Trial Balance as on December 31, 2008, was as below:
Particulars
Rs.
Rs.
Cash and Bank balances (Cash Rs. 180)
4,860
Share capital
22,500
Land and Buildings
8,000
Fixtures
750
Cycles
1000
Salaries
1200
Purchases
48500
Sales
45000
Debtors and Creditors
4500
3000
Rent from tenants
600
Rent, Rates and taxes
300
Building upkeep
150
Directors fees
720
Sundry charges
120
Interest to vendor
1000
Total
71,100
71,100
Prepare the final accounts for the year ending December 31, 2008, considering
the following additional details:
Stock at end Rs.14,000
Bad debts Rs.200 (including Rs.50 on debtors taken over from vendor) to be
written off.
Sales above include sales up to april, 1, 2008, Rs.7500.
Provide for doubtful debts.Rs.250
Depreciate Buildings 5% and cycles 20%
A Ltd. Was registered with an authorized capital of Rs.6,00,000 in equity
shares of Rs.10 each. The following is its trail balance on 31st March 2008.
VALLIAMMAI ENGINEERING COLLEGE
DEPARTMENT OF MANAGEMENT STUDIES
BA7106-ACCOUNTING FOR MANAGEMENT QUESTION BANK
Particulars
a)
b)
c)
d)
e)
f)
Q.No
Debit (Rs.)
Credit
(Rs.)
Goodwill
25,000
Cash
750
Bank
39,900
Purchases
185000
Preliminary expenses
5000
Share capital
400000
12% Debentures
300000
P & L A/C (Cr.)
26250
Calls in arrears
7500
Premises
300000
Plant and machineries
330000
Interim Dividend
39250
Sales
415000
Stock (1.4.2007)
75000
Furniture & Fixtures
7200
Sundry Debtors
87000
Wages
84865
General Expenses
6835
Freight and carriage
13115
Salaries
14500
Directors Fees
5725
Bad debts
2110
Debentures interest paid
18000
Bills payable
37000
Sundry creditors
40000
General reserve
25000
Provision for bad debts
3500
Total
1246750
1246750
Prepare Profit and Loss account, Profit and Loss appropriation A/C and
balancesheet in proper form after making the following adjustments:
Depreciate Plant and machinery by 15%
Write off Rs.500 from preliminary expenses
Provide for 6 months interest on debentures
Leave bad and doubtful debts provision at 5% on sundry debtors
Provide for income tax at 50%
Stock on 31-3-2008 was Rs.95,000
Unit - III - Part - A Question
Level
VALLIAMMAI ENGINEERING COLLEGE
DEPARTMENT OF MANAGEMENT STUDIES
1
2
3
4
5
6
7
8
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Q.No
1
2
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6
7
BA7106-ACCOUNTING FOR MANAGEMENT QUESTION BANK
What are financial statements?
List out various sources and applications of cash.
How would you show your understanding of debt equity ratio?
List any two objectives of financial statements?
Can you assess the value or importance of funds flow statement?
Differentiate between cash flow and funds flow statements.
What does cash flow analysis mean?
How would you explain funds flow statement?
How the various activities are classified (as per AS-3 revised) while
preparing cash flow statement?
What are the components of flow of fund?
Can you identify the uses of cash flow statement?
What is your opinion of Profitability Ratios?
Can you recall the significance of Ratio analysis?
Outline the scope of Ratio Analysis.
How would you show your understanding of Cash inflow and cash
outflow?
Can you make a distinction between cash equivalents and cash flows?
Define Current ratio.
What is the main idea of operating ratio?
What are the benefits of schedule of changes in working capital?
Can you list the types of working capital
BTL 1
BTL 2
BTL 3
BTL 4
BTL 5
BTL 6
BTL 1
BTL 2
Unit - III - Part - B Question
What are the essential attributes of financial statements?
Explain the format of cash flow statement.
Describe the procedure for the preparation of a cash flow statement.
Explain the terms funds, funds flow and funds flow statement.
Discuss briefly the various methods of classification of ratios.
Evaluate the common sized balance sheet and income statement.
Level
BTL 1
BTL 2
BTL 3
BTL 4
BTL 5
BTL 6
Explain the various ways of presentation of financial statements.
BTL 1
From the following details, prepare the balance sheet of the firm
concerned:
Stock velocity
6
Capital turnover ratio
2
Fixed assets turnover ratio
4
Gross profit ratio
20%
Debt collection period
2 months
Creditors payment period
73 days
The gross profit was Rs.60,000 closing stock was Rs.5000 in excess of the
opening stock.
Illustrate the preparation of schedule of changes in working capital.
Discuss the procedure for the preparation of funds flow statement.
BTL 3
BTL 4
BTL 5
BTL 6
BTL 1
BTL 2
BTL 3
BTL 4
BTL 1
BTL 2
BTL 1
BTL 1
BTL 2
BTL 3
BTL 4
VALLIAMMAI ENGINEERING COLLEGE
DEPARTMENT OF MANAGEMENT STUDIES
BA7106-ACCOUNTING FOR MANAGEMENT QUESTION BANK
10
11
12
From the following figures, prepare a funds flow statement.
Liabilities 31-1231-12Assets
31-1231-122001
2002
2001
2002
Creditors 319000
365000
Cash
130000
40000
Provision -----200000
Debtors
100000
160000
for
dividend
Long term -------535000
Stock
235000
255000
loan
Equity
3600000 4000000 Land and 540000
1020000
capital
Buildings
Surplus
100000
129000
Plant and 2804000 3544000
Machinery
Furniture
210000
210000
Total
4019000 5229000 Total
4019000 5229000
Following are the condensed balance sheets of subha Ltd.
Particulars
1997 (Rs.)
1998 (Rs.)
Equity share capital
400000
400000
Reserves and surplus
282000
346000
Depreciation Reserve
20000
28000
Secured loans
40000
60000
Creditors for goods
129000
106000
Outstanding expenses
17000
3000
Total
888000
943000
Plant and Equipment (Cost)
570000
600000
Inventories
196000
226000
Debtors
79000
57000
Cash at Bank
43000
60000
Total
888000
943000
You are required to work out the figures of funds from operation and cash
from operations
A summary of the financial position of Mr.x for the year 1996 and 1997 is
given as follows:
Liabilities 1996
1997
Assets
1996
1997
Capital
70000
83000
cash
7000
13000
Creditors 10000
12000
Debtors
20000
18000
Stock
40000
52000
Fixed
13000
12000
assets
Total
80000
95000
Total
80000
95000
There were no drawings or sale of fixed assets during the year. Prepare a
cash flow statement.
13
Explain the various techniques of funds reporting.
14
From the following particulars prepare a funds flow statement for the year
ended 31st December 2001.
Particulars
Rs.
Net profit before writing off goodwill
21500
Depreciation written off on fixed assets
3500
BTL 1
VALLIAMMAI ENGINEERING COLLEGE
DEPARTMENT OF MANAGEMENT STUDIES
BA7106-ACCOUNTING FOR MANAGEMENT QUESTION BANK
Goodwill written off from profits
Dividends paid
Shares issued for cash
Purchase of machinery
Increase in working capital
5000
7000
10000
20000
8000
