Name : ……………………………………………………………

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Roll No. : ………………………………………………………..
Invigilator’s Signature : ………………………………………..
CS/MCA/SEM-3/MBA (MCA)-302/2010-11
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2010-11
MANAGEMENT ACCOUNTING
Time Allotted : 3 Hours Full Marks : 70
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The figures in the margin indicate full marks.
Candidates are required to give their answers in their own words
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as far as practicable.
GROUP – A
( Multiple Choice Type Questions )
1. Choose the correct alternatives for any ten of the following :
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10 × 1 = 10
i) In computerized accounting package, the provision for
which of the accounts remain non-existent ?
a) Contra entry in cash book
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b) The column for journal folio

c) Suspense account
d) Contingent assets.
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ii) RONW is financial statement analysis process

represents
a) Return on Net Working Capital
a c.

b) Return on Net worth of a Company

c) Return on Operating Net Worth
d) Return on Obsolete Notional Worth ( of a sick
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iii) Crediting the Sales Account for the sale of Old Furniture
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used as an asset is

a) a compensating error

b) an error of omission
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c) an error of principle

d) none of these.
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iv) Contribution is the difference between

a) Sales and Fixed cost

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b) Sales and Variable cost

c) Sales and Cost of goods sold

d) None of these.

v) To test the liquidity of a concern which of the following

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ratio is useful ?

a) Acid test ratio

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b) Capital turnover ratio

c) Bad debt to sales ratio

d) Inventory turnover ratio.

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vi) Cash Account is a

a) Personal account b) Real account

c) Nominal account d) Contingent account.

a c.

vii) Goodwill is a

a) Fixed asset b) Current asset

c) Fictitious asset d) Wasting asset.

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 CS/MCA/SEM-3/MBA (MCA)-302/2010-11

viii) Excess of current assets over current liabilities is

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termed as

a) Total capital b) Floating capital

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c) Working capital d) Debt capital.

ix) Funds flow statement is a statement showing

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a) Changes in cash position
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b) Changes in assets and liabilities

c) Statement of sources and application of fund

d) Only changes in working capital.

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x) Stores ledger is maintained in

a) Store department
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b) Purchase department

c) Sales department
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d) Cost Accounting department.

a c.

xi) LIFO is a method of

a) Depreciation b) Cost analysis

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c) Inventory valuation d) Turnover.

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GROUP – B
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( Short Answer Type Questions )
Answer any three of the following. 3 × 5 = 15

2. Discuss some errors not disclosed by a Trial Balance.

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3. Calculate the Economic Order Quantity, Number of orders
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and Gap between two orders from the following particulars.

Annual consumption 12,800 units. Cost per unit Rs. 80.

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Ordering cost per order Rs. 200. Carrying cost 10% of

inventory value.
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4. Define “Flexible Budget”.

5. Distinguish between “Financial Accounting” and

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“Management Accounting”.

6. From the following particulars calculate Maximum stock

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level, Minimum stock level, Reorder level and Average stock

a c.

level. Maximum usage 3000 units. Minimum usage 2500

units, Normal usage 2700 units. Re-order quantity 15000

units. Re-ordering period (in weeks) 5 to 9.

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 CS/MCA/SEM-3/MBA (MCA)-302/2010-11

GROUP – C
( Long Answer Type Questions )
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Answer any three of the following. 3 × 15 = 45
7. a) Distinguish between Cash Budget and Flexible Budget.
b) Prepare the Fund Flow statement :
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Liabilities 2009 (Rs.) 2010 (Rs.) Assets 2009 (Rs.) 2010 (Rs.)

Equity Share Capital 1,20,000 1,50,000 Land & Building 1,20,000 1,14,000

General Reserve 20,000 30,000 Plant & Machinery 80,000 90,000

Profit & Loss 15,000 25,000 Stock 40,000 50,000

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10% Debenture 1,00,000 80,000 Debtors 30,000 60,000

Creditors 15,000 30,000 Bank 10,000 6,000

Provision for Tax 10,000 5,000

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Total 2,80,000 3,20,000 Total 2,80,000 3,20,000

Additional information :
i) During 2010, a dividend of Rs. 20,000 were paid.
ii) Depreciation on land and building was provided at
5% p.a and on plant & building @ 10% p.a
iii) Provision for taxation during the year was
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maintained as Rs. 8,000. 5 + 10

8. a) A factory is currently running at 50% capacity and
produces 5,000 units, at a cost of Rs. 90 per unit as per
details below :
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Material Rs. 50
Labour Rs. 15
Factory Overhead Rs. 15 (Rs. 6 fixed)
Administrative Overhead Rs. 10 (Rs. 5 fixed)
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The current selling price is Rs. 100 per unit.

At 60% level of capacity utilization material cost per
unit with the help of the following information increased
by 2% and selling price per unit falls by 5%.
a c.

Estimate profit of factory at 60% and 80% working and

offer your comments.
b) What do you mean by “Budget” ? State the difference
between Fixed Budget and Fluctuating Budget. What
are the advantages of Budget ? 7+2+3+3
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9. Prepare a Cash Budget for the coming period from the

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following data including the extent of bank facilities the
company will require at end of each month :
Month Sales (Rs.) Purchase (Rs.) Wages (Rs.)
February 1,80,000 1,24,800 12,000
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March 1,92,000 1,44,000 14,000
April 1,08,000 2,43,000 11,000
May 1,74,000 2,46,000 10,000
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June 1,26,000 2,68,000 15,000

Additional information :
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i) 50% of credit sales is realized in the month following the

sales and the remaining 50% in the second month
following.
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ii) Creditors are in the month following the month of

purchase.
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iii) Wages are paid in the current month.

iv) Cash at Bank on 1st April (estimated) Rs. 25,000.

10. Write short notes on any three of the following : 3×5

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a) Defined Revenue expenditure

b) Contingent liabilities
a c.

c) Liquidity ratio

d) Fiction assets

e) Contra entry.
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 CS/MCA/SEM-3/MBA (MCA)-302/2010-11

11. a) With help of the following information given below,

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prepare the Trading Account, Profit and Loss Account

and Balance Sheet of X Ltd :

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i) Gross Profit Ratio = 25%

ii) Net Profit/Sales = 20%

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iii) Sales/Inventory Ratio = 10

iv) Fixed Assets/Total Current Assets = 5/7

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v) Current Ratio = 1

vi) Fixed Assets/Share capital = 5/4

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vii) Fixed Assets = Rs. 10,00,000

viii) Closing Stock = Rs. 1,00,000.

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b) State the limitations of Ratio Analysis.

c) What are the main differences between Cash Flow

Statement and Fund Flow Statement ?

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a c.
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