Professional Documents
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MB 0025 Page 1
Financial and Management Accounting
Index
Set -1
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Financial and Management Accounting
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Financial and Management Accounting
Q2. Hiran, a retailer, has prepared the following balance sheets for the years
ending 31st March 2004 and 2005:
Other data: The net profit for the year 2004 was Rs.40000. Hiran is paid a salary of Rs.16,000.
His drawings amounted to Rs.45,200. You are required to prepare a statement of changes in
financial position, on working capital basis.
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Financial and Management Accounting
Balances as on Effect on
4000
Trade and accrued expenses 24000 20000
16,000
Net Working Capital
Decrease in
Working(A-B)
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Financial and Management Accounting
Q3. Enter the following transactions in proper subsidiary book. Find out the
total of:
a) Purchase book b) sales book c) purchase return book d) sales return book.
a) Purchase book
Amount Rs.
Date Supplier Ledger Folio Inward Invoice
Dr
Purchase from
Jan 1 34000
Kartik
Purchase from
Jan 10 40000
vikas
Purchase from
Jan 12 102000
Naveen
Purchase from
Jan 15 100000
Brinda
Purchase from
Jan 25 45000
Anand
Total 321000
b) Sales Book
Supplier/ Outward
Date Ledger Folio Amount Rs.
Creditor Invoice
Good returned to
Jan 14 4000
kartik
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Financial and Management Accounting
Returned good to
Jan 22 2000
Naveen
Total 6000
d) Sales Return book
Customer/ Outward
Date Ledger Folio Amount Rs.
Debtors Invoice
Returned good
Jan 14 3000
by Vinay
Natraj returned
Jan 22 2000
goods
Total 5000
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Financial and Management Accounting
Q 4 a. On 01-04-2007 Mr. Gundu Rao stated business with Rs. 3, 00,000 cash
and opened a bank account with Rs. 1, 50,000. He purchased furniture for his
business for Rs. 25000. Goods were bought from selvaraj for Rs. 50000 on
credit. He sold goods for Rs. 27000 in cash and Rs. 30000 on credit. He paid
Rs. 2500 for business expenses during April month. Rs. 10000 was withdrawn
for office purpose form the back. Find out the closing balance of cash and
bank.
To capital
1/04/07 a/c of 300,000 1/04/07
Gundu Rao
By
To sales a/c 27000 25000
furniture
Cash
withdrawn
To bank C 10,000 10,000
for office
exp
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Financial and Management Accounting
Q 4b. Following are the extracts from the Trial Balance of a firm as on 31st
December 1998:
TRIAL BALANCE
Additional Information:
I. Salary for the month of December Rs.2000 has not yet been paid.
You are required to pass the necessary adjusting entries and show how the above items will
appear in the Firm’s Account
Entry:
Trial balance
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Financial and Management Accounting
Q5. From the following figures extracted from the book if Shri Govind, you
are required to prepare a Trading and Profit & Loss Account for the year
ended 31st March, 1999 and a Balance Sheet as on that date after making the
necessary adjustment.
2. A new machine was installed during the year costing Rs. 15,400, but it was not recorded in the
books as no payment was made for it. Wages Rs. 1,100 paid for its erection has been debited to
wages account.
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3. Depreciate: Plant and Machinery by 33 1/3 %
5. Of the Sundry Debtors Rs. 600 are bad and should be written off.
7. The manager is entitled to a commission of 10% of the net profits after charging such
commission.
Ans.
Trading A/c for the year ended 31st March, 1999:
Wages
35200
Less: erection 34100
1100
Factory
Lighting
1100
Gas & Fuel
2970
Freight
9900
To gross profit
transferred to
P& L A/c
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Financial and Management Accounting
Profit & Loss A/c for the year ended 31st March, 1999
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Financial and Management Accounting
Balance Sheet for the year ended 31st March, 1999
Shri govind’s
-13200 Cash in hand 2640
drawings
Plant &
Add net profit +80723 296323 99000+15400
Machinery
Less: Dep 38130 76270
Sundry Free hold
44000 66000
Creditors property
Bills Payable 5500 Less : Dep 5500 62700
Office
550
furniture
Less : Dep
4950
Loose tools
Sundry
29260 2200
Debtors
Less
provisions for 583
bad debts
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Financial and Management Accounting
1. The scope of budgetary control is wider. It is integrated plan of action, a coordinated plan
in respect of all functions of an enterprise the scope of standard costing, on the other
hand, is limited to the operating level. Here too, it is further linked to costs. Budgetary
control is extensive whereas standard costing is intensive in its application
2. Budgetary control deals with costs and revenues. But standard costing restricts only with
costs.
3. Budgetary control takes into account all activities such as production, sales, purchase3s,
finance, capital expenditure, personnel whereas standard costing is restricted to deal with
only costs.
4. Budgetary control targets are based on past actual adjusted to future trends. In standard
costing, standards are based on technical assessment.
5. At the approach level, budgeted targets work as the maximum limit of expenses above
which the actual expenditure should not normally exceed. Under standard costing,
standards are attainable level of performance.
6. Budget is projection of final accounts. Standard costs are projection of only cost
accounts.
7. Budgetary control emphasizes the forecasting aspect of the future operations. Standard
8. Costing scope and utility is limited to only operating level of the concern.
9. In budgetary control, the degree of variance analysis tends to be much less and variances
are not revealed through the accounts but are revealed in total. But in standard costing,
variances Financial and Management are analyzed in details according to their
originating causes and ar3e revealed through different accounts.
10. Budgetary control is possible even in parts of expenses according to the attitude of
management. A standard costing system can not be operated in parts. All items of
expenditure included in cost units are to be accounted for.
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