DECEMBER 2009 EXAMINATION
FM11
FINANCIAL & MANAGEMENT ACCOUNTING
Content
Time: Three Hours Maximum Marks: 100
NOTE : The paper is divided into two sections. Section A and Section B. There are seven questions in Section A.
Students are required to attempt any four questions from Section A. Question No. 8 (Section B) is compulsory. Each
question carries 20 Marks.
SECTION-A
1. (a) What do you mean by the term management accounting? Compare and contrast it with
Financial and Cost accounting. (12)
(b) Explain the uses of Management Accounting Information with examples. (8)
2. Explain the following terms and their significance:
(a) Absorption Costing
(b) Going concern concept
(c) Money measurement concept.
(d) Business entity concept
(e) Conservatism principle. (5+5+5+5)
3. (a) Explain the concept of true and fair value of final accounts with examples. (12)
(b) What are ‘assets’? Explain ‘long-term assets’, current assets, and long-term investments.
(8)
4. (a) What are the components of Cash Flow Statement as per AS-3? Explain with examples.
(10)
(b) Explain the Indirect Method of Cash flow statement with proforma. (10)
5. Explain the following ratios:
(a) Acid Test Ratio
(b) Debt Service Coverage ratio
(c) Stock turnover ratio
(d) Return on asset ratio. (5+5+5+5)
6. (a) What is traditional costing system? What are its limitations? (10)
(b) What is Activity Based Costing System? Differentiate it with activity-based management?
(10)
7. (a) What are the different types of functional budgets? Explain any two. (10) (b)
Explain the difference between fixed budget and flexible budget. (10)
SECTION-B
8. CASE STUDY
Agrawal Industries Ltd has a standard variable manufacturing cost of Rs.8 per unit produced. Fixed production costs
are Rs.1,10,000 per month (for standard volume of 11,000 units per month) and fixed selling and administrative
expenses are Rs.70,000 per month. The firm begins January with no inventories and had the following activity in
January, February and March:
January February March
Production (units) 12,000 10,000 11,000
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The selling price was Rs.30 per unit in each month.
You are required to prepare monthly income statements using both variable and absorption costing methods. You
are also required to account for the difference, if any, in the results reported under the two methods.
(20)
**************
Sales (units) 10,000 11,000 11,000
Page 2 of 2 DECEMBER 2009 EXAMINATION
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FM11
FINANCIAL & MANAGEMENT ACCOUNTING
Content
Time: Three Hours Maximum Marks: 100
NOTE : The paper is divided into two sections. Section A and Section B. There are seven questions in Section A.
Students are required to attempt any four questions from Section A. Question No. 8 (Section B) is compulsory. Each
question carries 20 Marks.
SECTION-A
1. (a) What do you mean by the term management accounting? Compare and contrast it with
Financial and Cost accounting. (12)
(b) Explain the uses of Management Accounting Information with examples. (8)
2. Explain the following terms and their significance:
(a) Absorption Costing
(b) Going concern concept
(c) Money measurement concept.
(d) Business entity concept
(e) Conservatism principle. (5+5+5+5)
3. (a) Explain the concept of true and fair value of final accounts with examples. (12)
(b) What are ‘assets’? Explain ‘long-term assets’, current assets, and long-term investments.
(8)
4. (a) What are the components of Cash Flow Statement as per AS-3? Explain with examples.
(10)
(b) Explain the Indirect Method of Cash flow statement with proforma. (10)
5. Explain the following ratios:
(a) Acid Test Ratio
(b) Debt Service Coverage ratio
(c) Stock turnover ratio
(d) Return on asset ratio. (5+5+5+5)
6. (a) What is traditional costing system? What are its limitations? (10)
(b) What is Activity Based Costing System? Differentiate it with activity-based management?
(10)
7. (a) What are the different types of functional budgets? Explain any two. (10) (b)
Explain the difference between fixed budget and flexible budget. (10)
SECTION-B
8. CASE STUDY
Agrawal Industries Ltd has a standard variable manufacturing cost of Rs.8 per unit produced. Fixed production costs
are Rs.1,10,000 per month (for standard volume of 11,000 units per month) and fixed selling and administrative
expenses are Rs.70,000 per month. The firm begins January with no inventories and had the following activity in
January, February and March:
January February March
Production (units) 12,000 10,000 11,000
Page 1 of 2 DECEMBER 2009 EXAMINATION
26-12-2012 file:///C:/Users/abdul/AppData/Local/Temp/Rar$EX00.968/PGDM%20DEC2009/FM11....
The selling price was Rs.30 per unit in each month.
You are required to prepare monthly income statements using both variable and absorption costing methods. You
are also required to account for the difference, if any, in the results reported under the two methods.
(20)
**************
Sales (units) 10,000 11,000 11,000
Page 2 of 2 DECEMBER 2009 EXAMINATION
26-12-2012 file:///C:/Users/abdul/AppData/Local/Temp/Rar$EX00.968/PGDM%20DEC2009/FM11....
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