Description

SESSION JUL – AUG 2024
PROGRAM MASTER OF BUSINESS ADMINISTRATION (MBA)
SEMESTER I
COURSE CODE & NAME DMBA110 FINANCIAL AND MANAGEMENT
ACCOUNTING

Assignment Set – 1

Q1. Explain the meaning and scope of Accounting. Along with that, discuss any five
Accounting concepts.
Ans 1.
Meaning of Accounting
Accounting is a systematic process of identifying, recording, classifying, summarizing,
interpreting, and communicating financial information. This financial information is crucial for
various stakeholders, including investors, creditors, management, and regulatory authorities,
as it enables them to make informed decisions. Often referred to as the language of business,
accounting provides a standardized method to measure and communicate financial
performance and position effectively.
Scope of Accounting
The scope of accounting is broad and encompasses several essential activities. It involves
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Q2. Writeashortnoteon thefollowing
A) Ledger
B) PurchaseBook
C) SalesBook
D) TrialBlanace
Ans 2.
A. Ledger A ledger is a principal book in accounting where all financial transactions related
to specific accounts are recorded in a systematic manner. It is derived from the journal, which
is the initial book of entry. The ledger classifies transactions into individual accounts, such as
cash, capital, revenue, and expenses, providing a clear and detailed picture of each account’s
activity. Each ledger account consists of two sides: the debit side and the credit side.
Transactions are posted from the journal to the respective ledger accounts, helping to monitor
account balances. For example, a sales transaction recorded in the journal will be transferred
Q3. Discuss the nature of Management Accounting along with its Functions and
Objectives.
Ans 3.
Nature of Management Accounting
Management accounting is a branch of accounting that focuses on providing financial and nonfinancial
information to internal stakeholders, primarily management, to support decisionmaking,
planning, and control. Unlike financial accounting, which is aimed at external
stakeholders, management accounting is future-oriented, flexible, and not bound by statutory
requirements. It integrates financial data with operational insights, enabling businesses to
Assignment Set – 2
Q4. Elaborate on the Attributes of Financial Statements. Discuss the Funds Flow
Statement and Differentiate Between Funds Flow Statement and Balance Sheet.
Ans 4.
Attributes of Financial Statements
Financial statements are critical documents that provide a comprehensive view of an
organization’s financial performance and position. They include the income statement, balance
sheet, cash flow statement, and notes to accounts. The primary attributes of financial statements
are:
Reliability: Ensures that the information presented is accurate and free from bias, derived from
verifiable data.
Relevance: Makes the information useful for decision-making, ensuring it addresses the needs
Q5. Describe the Various Sources of Cash. Explain the Three Elements of Cost.
Ans 5.
Various Sources of Cash
Cash is the lifeblood of any business, essential for meeting operational expenses, investing in
growth, and managing financial obligations. The sources of cash can be broadly categorized
into internal and external sources:
Operating Activities: Cash generated from the core operations of the business is the most
sustainable source. It includes revenue from sales, fees, or services rendered, adjusted for
operating expenses like salaries, utilities, and raw materials. Efficient operations ensure a
Q6.a.Explain in Detail the Advantages and Limitations of Standard Costing.
b. ABC Ltd. is preparing its Cash Budget for the First Quarter of 2024. Below are the
Expected Cash Inflows and Outflows:
 Opening Cash Balance (January 1, 2024): Rs. 10,000
 Sales Revenue (cash collected in the month of sale):
o January: Rs. 50,000
o February: Rs. 60,000
o March: Rs. 55,000
 Purchases (paid in the month following purchase):
o December 2023: Rs. 20,000
o January: Rs. 30,000
o February: Rs. 25,000
o March: Rs. 35,000
 Wages and Salaries:
o January: Rs. 8,000
o February: Rs. 10,000
o March: Rs. 9,000
 Overhead Expenses (paid in the same month):
o January: Rs. 5,000
o February: Rs. 6,000
o March: Rs. 5,500
 Other Cash Payments:
o Equipment Purchase in March: Rs. 15,000
The company aims to maintain a minimum cash balance of Rs. 5,000 at the end of each
month. If the cash balance falls below this amount, the company will borrow the needed
funds at the end of the month.
Prepare a Cash Budget for Each Month from January to March.
Ans 6.
a. Advantages of Standard Costing
 Cost Control: Standard costing sets benchmarks for costs, enabling businesses to
monitor deviations and take corrective actions. This promotes efficiency and cost
reduction.
 Performance Evaluation:By comparing actual costs with standard costs, businesses
can assess the performance of departments, processes, or employees, fostering