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Subject Code: KMB103

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MBA
(SEM I) THEORY EXAMINATION 2021-22
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
Q no. Question Marks CO
a. To make accounts comparable we need one convention to be followed name 2 1
the convention and also explain the same.
b. “Closing stock is always valued at Cost price or Market price whichever is 2 1
less” as per which convention, explain the same.
c. Define Accounting Standards. 2 2
d. Describe Human Recourse Accounting. 2 2
e. Illustrate the treatment of Goods sold on Approval Basis in Final Accounts? 2 3
f. Illustrate the treatment of Loss by fire in Final Accounts? 2 3
g. List any four tools available for the analysis of financial statement. 2 4
h. What is the significance of Liquidity ratios? 2 4
i. Define the term negative working capital. 2 5
j. “Gross Working Capital and Net Working Capital means one and the same”. 2 5
Comment.
SECTION B
2. Attempt any three of the following:

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1.
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Q no. Question Marks CO

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a. Define accounting its objectives and Limitation. 10 1
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b. Describe the objectives and limitations of human resource accounting. 10 2

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c. What do you mean by Double Entry System? Explain the merits and demerits 10 3

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also.
d. Prepare the format of Common size Balance Sheet with imaginary figures. 17 10 4
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e. Define Working Capital and factors determining the need for working capital. 10 5
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SECTION C
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3. Attempt any one part of the following:

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Q no. Question Marks CO

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a. Discuss various accounting concepts in detail with examples. 10 1

b. On 1st January, 2018, machinery was purchased by X for Rs.80,000. On 1st 10 1
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July, 2019, additions were made to the extent of Rs.20,000. On 30th June, 2021
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machinery purchased on 1st January, 2018, was sold for Rs.26,000.

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Depreciation is charged at 10% per annum on original cost. Show the

Machinery Account for the years from 2018 to 2021 in the books of X. X
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closes the books on 31st December.

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4. Attempt any one part of the following:

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Q no. Question Marks CO

a. Describe the various methods of valuation of human assets. 10 2
b. Explain the objectives and need of forensic accounting. 10 2

5. Attempt any one part of the following:

Q no. Question Marks CO
a. From the following transactions prepare Journal Entries, Ledger & Trial 10 3
Balance:
i) Mr. Ram commenced business with cash Rs.1,80,000.
ii) Good Purchased from Mohan for Rs. 25,000 on credit.
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MBA
(SEM I) THEORY EXAMINATION 2021-22
FINANCIAL ACCOUNTING FOR MANAGERS

iii) Goods sold to Sunder for Rs.10,000 on credit.

iv) Paid to Mohan Rs. 10,000.
v) Machinery Purchased for Rs. 10,000.
b. The following is the Trial Balance of Mr. A on 31st December, 2018: 10 3
Particulars Debit Credit
Balance Balance
Rs. Rs.
Cash in Hand 1,080
Cash at Bank 5,260
Purchases 81,350
Sales 1,97,560
Returns Inward 1,360
Returns Outward 1,000
Wages 20,960
Fuel and Power 9,460
Carriage on Sales 6,400
Carriage on Purchases 4,080
Stock (1st January, 2018) 11,520
Building 60,000
Freehold Land 20,000
Machinery 40,000

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Salaries 30,000
Patents 15,000

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General Expenses 6,000

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Insurance 1,200

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Capital 1,42,000
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Drawings
Sundry Debtors
10,490
29,000
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Sundry Creditors 12,600
3,53,160 3,53,160
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Taking into account the following adjustments prepare Trading and Profit and
Loss Account and the Balance Sheet:
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i.Stock on hand on 31st December, 2018 is Rs.13,600.

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ii.Machinery is to be depreciated at the rate of 10% and patents at the rate of

10%.
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iii.Salaries for the month of December, 2004 amount Rs.2,000 were unpaid.
iv.Insurance include a premium of Rs.170 for 2019.
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v.Wages include a sum of Rs.3,000 spent on the erection of a scooter shed for
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employees.
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vi.A provision for Bad and Doubtful Debts is to be created to the extent of 5%
on Sundry Debtors.
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6. Attempt any one part of the following:

Q no. Question Marks CO
a. Suppose you are an investor and you want to invest the money into a company; 10 4
which ratios you will calculate and why?
b. From the information given below: 10 4
Net Sales 10,00,000
Cost of Goods Sold 6,00,000
Current Assets 4,00,000
Current Liabilities 2,80,000
Paid-up Share Capital 5,00,000
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Subject Code: KMB103
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MBA
(SEM I) THEORY EXAMINATION 2021-22
FINANCIAL ACCOUNTING FOR MANAGERS

13% Debentures 2,00,000

Calculate the following ratios:
i) Current ratio ii) Working Capital Turnover Ratio
iii) Debt-Equity Ratio iv) Proprietary Ratio & v) Gross Profit Ratio

7. Attempt any one part of the following:

Q no. Question Marks CO
a. Explain the various working capital financing policies in detail. 10 5
b. From the following Balance Sheets, prepare the Cash Flow Statement for the 10 5
year ended March 31, 2015:
Liabilities 31-3-19 31-3-20 Assets 31-3-19 31-3-20
Rs. Rs. Rs. Rs.
Share 2,00,000 2,50,000 Land and 2,00,000 1,90,000
Capital Buildings
General 50,000 60,000 Plant and 1,50,000 1,69,000
Reserve Machinery
Profit and 30,500 30,600 Stock 1,00,000 74,000
Loss A/c
Bank Loan 70,000 ..... Sundry 80,000 64,200
Debtors

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Sundry 1,50,000 1,35,200 Cash 500 600

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Creditors

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Provision 30,000 35,000 Bank ..... 8,000

5.
for Tax
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Goodwill ..... 5,000
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5,30,500 5,10,800 5,30,500 5,10,800

Additional Information:
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i. Depreciation charged on machine was Rs.4,000.
ii. Tax provision made during the year Rs. 19,000.
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iii. Interim dividend of Rs.8,000 was paid during the year

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