Beruflich Dokumente
Kultur Dokumente
MANAGEMENT
(MBA-103)
MBA Semester-First
Scope Trading and Profit & Loss It aims at measuring the economic It is concerned with assisting
Account and Balance performance of the cost centers the management in its
sheet and provide suitable cost data to functions as well as evaluating
measure the economic the performance of the
performance of cost centers of cost management.
units.
Analysis of It indicates the position of It is concerned with collection, It can be applied for making
Performance the business as a whole in classification and analysis of cost the cost accounting more
the final accounts. data. purposeful and management
oriented
Legal It is compulsory for every Cost records are maintained There is no legal compulsion of
compulsion company on account of legal voluntarily to meet the the maintenance of
provision requirement of management management accounting
Cash basis
Actual cash receipts and payments
are recorded.
Credit transactions are not recorded.
Mixed basis
Combination of cash and accrual basis.
Personal Impersonal
Accounts Accounts
Journal entries
Ledger
Trial balance
Balance Sheet
Mukesh Arora, Assistant Professor,
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CBS-Landran
Accounting Principles
(Concepts & Conventions)
Accounting Conventions.
Meaning
All transactions of the business are recorded in
terms of money.
It provides a common unit of measurement.
Limitations
Market conditions, technological changes and
the efficiency of management would not be
disclosed in the accounts
Increase/
Year ending 31 Dec. Decrease Increase/D
(Amount) ecrease
Rs (%)
2006 (Rs) 2007(Rs)
ASSETS
Current Assets:
Cash in hand & at Bank 20,000 80,000 60,000 300
Bills Receivables 1,50,000 90,000 -60,000 -40
Sundry Debtors 2,00,000 2,50,000 50,000 25
Stock 2,50,000 3,50,000 1,00,000 40
Prepaid Expences 2,000 2,000
Total Current Assets 6,20,000 7,72,000 1,52,000 24.52
Fixed Assets:
Land & Buildings 3,70,000 2,70,000 - 1,00,000 -27.03
Plant & Machinery 4,00,000 6,00,000 2,00,000 50
Furniture 20,000 25,000 5,000 25
Other Fixed Assets 25,000 30,000 5,000 20
Total Fixed Assets 8,15,000 9,25,000 1,10,000 13.49
Total Assets 14,35,000 16,97,000 2,62,000 18.26
The Income statements of a concern are given for the year ending 31st
Dec, 2006 and 2007. Re-arrange the figures in a comparative form and
study the profitability position of the concern.
2006 2007
Rs.(000) Rs.(000)
Net Sales 785 900
Cost of Goods Sold 450 500
Operating Expenses:
General and Admn Expenses 70 72
selling Expenses 80 90
Non-operating Expenses:
Interest paid 25 30
Income-Tax 70 80
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CBS-Landran
Guidelines for Interpretation of
Income Statements
1. The amount of GP should be studied
The increase or decrease in sales should be compared with the increase or decrease
in CGS.
Increase/
Year ending 31 Dec. Decrease Increase/
(Amount) Decrease
Rs (%)
2006 (Rs) 2007(Rs)
Net Sales 785 900 115 14.65
Less: Cost of Goods Sold 450 500 50 11.11
Gross Profit 335 400 65 19.40
Operating Expenses:
General and Admn Expenses 70 72 2 2.86
selling Expenses 80 90 10 12.50
Total Operating Expenses 150 162 12 8.00
Operating Profit 185 238 53 28.65
Less: Non-operating Expenses:
Interest paid 25 30 5 20.00
Net Profit before Tax 160 208 48 30.00
Less: Income-Tax 70 80 10 14.29
Net Profit after-tax 90 128 38 42.22
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CBS-Landran
Common-Size Statement Analysis
Taking sales to be equal to 100, all other items in the income
statement of a year are expressed as percentages to the sales.
In case of balance sheet the total assets are made equal to
100 and all other assets are expressed in relative percentages.
The same is the case with liabilities with the total liabilities
being 100.
(Rs. In Lakhs)
Year Sales Stock Profit before Tax
2003 1,881 709 321
2004 2,340 781 435
2005 2,655 816 458
2006 3,021 944 527
2007 3,768 1,154 672
Stock 10000
Cost of sales
Working capital turnover ratio=
Average working capital
Net sales
Fixed assets turnover ratio=
Fixed assets
Net sales
Total assets turnover ratio=
Total assets
Payment of taxes.
Sale of property, plant,
Equipment, long-term
Investing Purchase of property,
investments.
Activities plant, equipment and
non-current investments.
Receipt from Interest
and dividends.
So, contribution is the excess of sales revenue over the variable cost.
Profit
M/S Ratio (in Rs.) = _________________________
P/V Ratio
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CBS-Landran
Applications of Marginal Costing or
Break Even Analysis
1. Cost Control
2. Profit Planning
3. Evaluation of Performance
4. Fixation of Selling Prices
5. Key/Limiting factor
6. Make or Buy decisions
7. Selection of a suitable product mix
8. Effect of change in price
9. Maintaining a desired level of profit
10. Alternative methods of production
11. Diversification of products
12. Closing down or suspending activities
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Advantages Of Marginal Costing
Marginal costing is aid to management in taking many
valuable decisions such as pricing, to make or buy, etc.
Simple to understand
Effective control over cost is possible.
Since fixed costs are avoided, it eliminates the difficult
work of allocating, apportioning, and absorbing
overhead.
Where a number of products are being manufactured
marginal costing facilitates the study of relative
profitability of different products.
*not in syllabus
Material
Material Price
Quantity/Usage
Variance
Variance
Material Mix
Variance
Material Yield
Variance
Budgetary Control
Introduction
General Features of Tally
Getting Started with Tally
Create Company
Company Info
Role of Buttons
The shortcut keys appear in button names in the button bar (right side of the Tally
screen). You can either click the button from the button bar or press the relevant
function key or character underlined/double-underlined.
The buttons have a function key before the button names ( Eg: F1: Select Cmp) which
means you need to press F1 key (Function Key) to select the 'Select Company' screen
The buttons have an underlined character ( Eg: F3:Cmp Info), which means you need
to press ALT + F3 to select the 'Company Info' screen.
Some buttons have a double-underlined character (Eg: As Voucher) which means you
need to press CTRL + V to select the 'Voucher' in voucher mode.
The shortcut keys available in Tally are listed in the below table: