KARPAGAM INSTITUTE OF TECHNOLOGY

MCA CONTINUOUS ASSESSMENT INTERNAL TEST- I

REGULATIONS 2009 I SEMESTER (2011-2014)
MC9215 ACCOUNTING AND FINANCIAL MANAGEMENT
TIME : H!"#$ M%&'M%#($ : 100

PART A
ANS)ER ALL *UESTIONS (10 & 2 + 20 MARKS)
1. Define the term accounting?
2. What is single entry and double entry system?
3. Explain the rules of accounting?
4. What is trial balance
5. What is meant by final accounts?
. Define ratio analysis?
!. "ention the types of sol#ency or financial ratios
$. What is cash flo% statement?
&. What is optimum capital structure?
1'. What is di#idend policy?
PART ,
ANS)ER ALL THE FOLLO)ING (5 & 1- + .0 MARKS)
11 (%) Explain (ccounting concepts and con#entions?
O#
(/)Define traditional and modern accounting. Explain the ob)ecti#es* ad#antages and limitations of
(ccounting?
12 (%) +repare the final accounts for ,am traders on "arch 1&
-ash in hand 1''
.alary 35''
Wages 1!5&'
Withdra%al 532'
1
,ent and rates 2!&'
+urchases 32$$&'
-arriage in%ards $&1'
Disc 2!2'
/an0 charges 1'4'
/ad debts 3'
1oan gi#en 25''
+lant and machine !&'
2ixture and fittings 11''
3orses and cart &5'
4n#estment ''
Debtors 14$'
.toc0 in trade 53'''
5eneral expenses !5'
.ales returns !!'
Due to ban0 131!'
+urchase returns 12'
4nterest recei#ed 33'
capital !1!4'
-reditors 413'
4nterest on loan 12'
sales 3!!5!'
A00121!3%4 I35!#6%21!3
16 Depreciation 7 1'8 is to be %ritten off plant and machinery *fixture and fitting* horses and carts
26 58 interest to be charged on %ithdra%al
36 ,ent and rates are paid to 3' 9une 1&
46 .toc0 on 31 march 1& %as ,s 12!'
O#
(/) +repare the final accounts for 9ohn traders on 31
st
Dec 2''
.ales 5'''
.ales return 5''
:pening .toc0 $'''
+urchases 2&'''
+urchases return 3''
Direct %ages 5'''
Direct expenses 5'''
-arriage in%ards 4'''
-apital at the beginning 3''''
Dra%ings 5'''
2
Debtors 1''''
-reditors 12'''
Discount allo%ed 1''
Discount recei#ed 5''
.alaries 3'''
4nterest paid 4''
2urniture 3'''
/uildings 2''''
+lant ; machinery 2''''
-ash in hand 1'''
/ills payable 2''
Existing bad ; doubtful debts 5''
/ad debts 3''
-losing stoc0 $'''
1 (%) <he
follo%ing is the
balance sheet of
=>? ltd as on 1
st

march 1&$
L1%/141217
$

R$'
A$$72$ R$'
E@uity .hare
-apital
2*''*''' 1and ;
/uildings
1*5'*'''
+ref. .hare
-apital
2*''*''' +lant ;
"achinery
2*5'*'''
5eneral
,eser#e
$'*''' 2urniture ;
fittings
5'*'''
+rofit and loss
aAc
4'*''' .toc0 1*5'*'''
128
Debentures
2*2'*''' Debtors !'*'''
-reditors 1*''*''' /ills
,ecei#able
$'*'''
/ills +ayable 5'*''' -ash in ban0 1*''*'''
-ash in hand 4'*'''
$*&'*''' $*&'*'''
C%48"4%27:
a6 -urrent ,atio d6+roprietary ratio
b6 Buic0 ratio e62ixed asset ratio
3
A00121!3%4 I35!#6%21!3
1. :utstanding salaries ,s.5''
2. 4nterest on capital at 1'8 +.(
3. Depreciation on plant ; machinery at 1'8 and buildings at 58 +.(
4. +repaid of 4nterest ,s.1''
5. +ro#ision for bad and doubtful debts at 1'8 on debtors
c6 DebtCe@uity ratio f6-apital gearing ratio
O#
(/) 2rom the follo%ing information* calculate
a6 5ross +rofit ,atio d6Det +rofit ratio
b6 :perating ratio e6(dministrati#e Expenses
c6 :perating +rofit ratio f6 .elling ; Distribution Expenses
.ales ,..*''*'''* -ost of goods sold ,.*4*''*'''
:perating Expenses ,s.1*2'*'''* Don E :perating 4ncome ,s 12*'''
Don :perating Expenses ,s.4''' * (dministrati#e expenses ,s.4'*'''*.elling ; Distribution
expenses ,s.25*'''
14 (%) What is -apital .tructure. Explain the factors determining the capital .tructure
O#
(/) What is di#idend policy. Explain the types of di#idend policy its ad#antages and limitations
15 (%) What is %or0ing capital. Explain the factors affecting %or0ing capital
O#
(/) -ost
.heet of
=>?
-ompany pro#ides the follo%ing particularsF
4
+articulars ,s.
,a%Cmaterials $'
Direct labour 3'
:#erhead '
<otal cost 1!'
+rofit 3'
.elling price 2''
<he follo%ing future particulars are a#ailable F
,a% material in stoc0* on a#erage one month * "aterials are in process on an a#erage of half a
month * finished goods in stoc0 on an a#erage of one month.
-redit allo%ed by suppliers in one month * credit allo%ed to debtors is t%o months* a#erage timeC
lag in payment is 1 G %ee0s * o#erhead expenses is one month. :ne fourth of the output is sold
against cash. -ash in hand and at ban0 is expected to be ,s.3*5*'''.
>ou are re@uired to prepare a statement sho%ing the %or0ing capital needed to finance a le#el of
acti#ity of 1*'4*''' units of production.
>ou may assume that production is carried on e#enly throughout the year* and %ages and
o#erheads accrue similarly HW4+ at 5'8 completion stage6
5