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    For Good Marks in IGNOU Exams Always Read Gullybaba Books

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    ansar shaik
    The document discusses topics related to accounting and finance for managers, including concepts like conservatism, differences between financial and management accounting, importance of cash flow statements, effects of accounting mistakes, computation of net worth, flexible versus fixed budgets, weighted average cost of capital, and explanatory notes on terms like trading on equity and internal rate of return. It also provides a case study with financial information for a company for the years 2017-2018 and requires preparation of statements of sources and application of funds and changes in working capital. Finally, it examines the differences between break-even charts and profit graphs.

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    For Good Marks in IGNOU Exams Always Read Gullybaba Books

    Uploaded by

    ansar shaik
    28 views4 pages
    The document discusses topics related to accounting and finance for managers, including concepts like conservatism, differences between financial and management accounting, importance of cash flow statements, effects of accounting mistakes, computation of net worth, flexible versus fixed budgets, weighted average cost of capital, and explanatory notes on terms like trading on equity and internal rate of return. It also provides a case study with financial information for a company for the years 2017-2018 and requires preparation of statements of sources and application of funds and changes in working capital. Finally, it examines the differences between break-even charts and profit graphs.

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    Ms 4 aasignment

    Original Title

    MS-4-J-19

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    The document discusses topics related to accounting and finance for managers, including concepts like conservatism, differences between financial and management accounting, importance of cash flow statements, effects of accounting mistakes, computation of net worth, flexible versus fixed budgets, weighted average cost of capital, and explanatory notes on terms like trading on equity and internal rate of return. It also provides a case study with financial information for a company for the years 2017-2018 and requires preparation of statements of sources and application of funds and changes in working capital. Finally, it examines the differences between break-even charts and profit graphs.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    28 views4 pages

    For Good Marks in IGNOU Exams Always Read Gullybaba Books

    Uploaded by

    ansar shaik
    The document discusses topics related to accounting and finance for managers, including concepts like conservatism, differences between financial and management accounting, importance of cash flow statements, effects of accounting mistakes, computation of net worth, flexible versus fixed budgets, weighted average cost of capital, and explanatory notes on terms like trading on equity and internal rate of return. It also provides a case study with financial information for a company for the years 2017-2018 and requires preparation of statements of sources and application of funds and changes in working capital. Finally, it examines the differences between break-even charts and profit graphs.

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    For Good Marks in IGNOU Exams always read Gullybaba Books

    MS-04: ACCOUNTING AND FINANCE FOR

    MANAGERS

    June, 2019

    Note : Attempt any five questions. All questions carry equal marks.
    Use of calculators is allowed.

    Section—A

    Q1. (a) What do you understand by the concept of conservatism? Why


    is it also called the concept of prudence? Why is it not applied as

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    strongly today as it used to be in the past? Discuss.

    (b) Distinguish between Financial Accounting and Management


    Accounting. Explain the purposes which they serve and
    interconnection between them.

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    Q2. Discuss the importance of cash and cash flow statement. How is
    the length of the cash cycle determined? How does the length of the
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    cash cycle affect the requirement of working capital of a firm? Discuss.

    Q3. (a) On 1st July 2018, a company purchased machinery for `50,000,
    but the accountant, by mistake, debited this amount to purchases of
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    stock-in-trade. The company charges depreciation at the rate of 10% on


    straight line method and pays tax at the rate of 30%.

    Assess the effect of the above mistake on the Net Profit after tax of the
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    company for the year 2018 — 19.

    (b) What do you understand by Net Worth of a company? Explain the


    items included therein and describe their significance to the company.
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    Q4. What do you understand by Flexible Budget? How does it differ


    from a Fixed Budget and a Rolling Budget? Explain the significance of
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    Flexible Budget in a business organisztion.

    Q5. What do you understand by Weighted Average Cost of Capital?


    How is it computed? Explain with an example. What is its significance
    in capital budgeting decisions? Explain.

    Q6. Write explanatory notes on the following:

    (a) Trading on Equity

    (b) Direct Labour Efficiency Variance


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    For Good Marks in IGNOU Exams always read Gullybaba Books

    (c) Internal Rate of Return Method

    (d) Current, Contingent and Accrued Liabilities

    Q7. The Balance Sheet of Pioneer Ltd. as at 31st March 2017 and 2018
    are given below:

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    For Good Marks in IGNOU Exams always read Gullybaba Books

    Particulars 31.3.2017 31.3.2018


    ` `
    Share Capital 6,00,000 8,00,000
    Capital Reserve – 20,000
    General Reserve 3,40,000 4,00,000
    Profit and Loss A/c 1,20,000 1,50,000
    Debentures 4,00,000 2,80,000
    Current Liabilities 2,40,000 2,60,000
    Provision for Income 1,80,000 1,70,000
    Tax
    Proposed Dividend 60,000 72,000
    Unpaid Dividend – 8,000

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    19,40,000 21,60,000
    Fixed Assets (At cost)
    16,00,000 19,00,000
    Less: Depreciation
    4,60,000 5,80,000
    11,40,000 13,20,000

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    Trade Investments 2,00,00 1,60,000
    Current Assets 5,60,000 6,60,000
    Preliminary 40,000 20,000
    Expenses
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    19,40,000 21,60,000
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    During the year 2017 — 18 the company:

    (a) Sold one machine for `50,000, the cost of which was `1,00,000 and
    depreciation provided on it was `40,000.
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    (b) Provided `1,80,000 as depreciation.

    (c) Redeemed 30% of the Debentures @ `105.


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    (d) Sold some Trade Investments at a profit of `20,000, which was


    credited to Capital Reserve.
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    (e) Decided to value stock at cost, whereas previously the practice was
    to value stock at cost less 10%. The stock according to books on
    31.3.2017 was `1,08,000. The stock on 31.3.2018 was correctly valued at
    `1,05,000.

    (f) Decided to write off Fixed Assets costing `28,000 on which


    deprecation amounting to `20,000 has been provided.

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    For Good Marks in IGNOU Exams always read Gullybaba Books

    You are required to prepare the Statement of Sources and Application


    of Funds during 2017 — 18 and the Statement of Changes in Working
    Capital.

    Q8. "Though the Break-Even Chart and Profit Graph intend to show
    the same information, they seem to differ from each other." Examine
    this statement and explain the meaning and significance of Break-Even
    Chart and Profit Graph.

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