Directorate of Online Education

SESSION JAN/FEB 2023

PROGRAM MASTER OF BUSINESS ADMINISTRATION (MBA)
SEMESTER I
COURSE CODE & NAME DMBA104 – FINANCIAL AND MANAGEMENT
ACCOUNTING
CREDITS 4
NUMBER OF ASSIGNMENTS & 02
MARKS 30 Marks each

MBA assignment please Answer all questions. Kindly note that answers for 10 marks questions should
be approximately of 400 words. Each question is followed by evaluation scheme.

A. Explain any two of the following accounting concepts with illustration:

1. Business entity concept
2. Dual aspect concept
3. Matching concept

B. Write a detailed note on different types of subsidiary books and their importance in recording
accounting transactions. Also demonstrate specimen of any 2 types of subsidiary books.

C. The liquidity of a business firm is measured by its ability to satisfy its obligations as they become due.
Explain in detail the ratios used for this purpose.

D. Discuss the main features of marginal costing. Also, give a brief of contribution as a technique of
marginal costing.

E. Elaborate the concept of variance analysis? Briefly describe the concepts of material variance and
labour variance considering their different types

Q.N Assignment Set – 1 Marks Total Marks

o
Questions
1. Explain any two of the following accounting concepts with illustration: 5+5 10
1. Business entity concept
2. Dual aspect concept
3. Matching concept
2. With the help of given information prepare a statement of gross profit for 10 10
XYZ Ltd.

Particulars Rs.
Opening stock 10000
Credit purchase 25000
Cash purchase 15000
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Purchase return 2000
Other direct expenses 12000
Closing stock 6000
Cash sales 35000
Credit sales 65000
Wages 9000
Salaries 7000
Sales return 5000

3. Write a detailed note on different types of subsidiary books and their 6+4 10
importance in recording accounting transactions. Also demonstrate
specimen of any 2 types of subsidiary books.

Q.No Assignment Set – 2 Marks Total Marks

Questions
4. The liquidity of a business firm is measured by its ability to satisfy its 10 10
obligations as they become due. Explain in detail the ratios used for this
purpose.
5. Discuss the main features of marginal costing. Also, give a brief of 6+4 10
contribution as a technique of marginal costing.
6. Elaborate the concept of variance analysis? Briefly describe the concepts 2+4+4 10
of material variance and labour variance considering their different types.

A. Explain any two of the following accounting concepts with illustration:

 Business entity concept: The business entity concept states that a business is

a separate entity from its owners. This means that the business's assets and
liabilities are not the same as the owners' personal assets and liabilities. For
example, if a business owner takes money out of the business for personal use, this
is considered a withdrawal, not a distribution of profit.
 Dual aspect concept: The dual aspect concept states that every accounting
transaction has two effects on the financial statements. For example, if a business
buys inventory on credit, this will increase the asset account "inventory" and increase
the liability account "accounts payable."
 Matching concept: The matching concept states that expenses should be
matched with the revenues they generate. For example, if a business pays for
advertising in January, but the advertising runs in February, the expense should be
recorded in February.
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B. Write a detailed note on different types of subsidiary books and their importance
in recording accounting transactions. Also demonstrate specimen of any 2 types of
subsidiary books:

There are many different types of subsidiary books, each with its own purpose.
Some common types of subsidiary books include:

 Sales journal: The sales journal is used to record all sales transactions. This
helps to ensure that all sales are recorded and that the correct amount of sales tax is
collected.
 Purchase journal: The purchase journal is used to record all purchases of
goods and services. This helps to ensure that all purchases are recorded and that
the correct amount of accounts payable is accrued.
 Cash receipts journal: The cash receipts journal is used to record all cash
receipts. This helps to ensure that all cash is accounted for and that the correct
amount of income is recorded.
 Cash disbursements journal: The cash disbursements journal is used to
record all cash payments. This helps to ensure that all cash payments are accounted
for and that the correct amount of expenses is recorded.

Specimen of sales journal:

Date Account Debit Credit Description

2023-03-08 Accounts receivable 1,000 Sales Sold goods to custom

2023-03-10 Sales tax payable 75 Sales Collected sales tax o

2023-03-15 Cost of goods sold 500 Inventory Recorded cost of goo

Specimen of purchase journal:

Date Account Debit Credit Description

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2023-03-09 Inventory 500 Accounts payable Purchased inve

2023-03-11 Sales tax payable 35 Purchases Collected sales

2023-03-15 Accounts payable 535 Cash Paid for invento

C. The liquidity of a business firm is measured by its ability to satisfy its obligations
as they become due. Explain in detail the ratios used for this purpose.

There are many different ratios that can be used to measure a business's liquidity.
Some common liquidity ratios include:

 Current ratio: The current ratio is calculated by dividing current assets by

current liabilities. A current ratio of 2:1 or higher is generally considered to be good.
 Quick ratio: The quick ratio is calculated by dividing quick assets by current
liabilities. Quick assets are current assets minus inventory. A quick ratio of 1:1 or
higher is generally considered to be good.
 Acid-test ratio: The acid-test ratio is calculated by dividing cash and cash
equivalents by current liabilities. A ratio of 1:1 or higher is generally considered to be
good.

These ratios can be used to compare a business's liquidity to that of other

businesses in the same industry. They can also be used to track a business's
liquidity over time.

D. Discuss the main features of marginal costing. Also, give a brief of contribution as
a technique of marginal costing.

Marginal costing is a costing method that focuses on the costs of the goods that are
sold. It is based on the concept that only the costs of the goods that are sold should
be included in the cost of goods sold. The costs of the goods that are not sold are
called the period costs and are expensed in the period in which they are incurred.

The main features of marginal costing are:

 Only the variable costs of the goods that are sold are included in the cost of
goods sold.
 The fixed costs are expensed in the period in which they are incurred.
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 The contribution margin is the difference between the selling price and the
variable cost

Sure, here is the answer to question E:

E. Elaborate the concept of variance analysis? Briefly describe the

concepts of material variance and labour variance considering their
different type

Variance analysis is a technique used to compare actual costs to budgeted

costs. The difference between the actual costs and the budgeted costs is
called the variance. Variance analysis can be used to identify areas where
costs are out of control and to take corrective action.

There are two types of variances:

 Material variances: Material variances are variances that are

significant enough to affect the profitability of a business. Material
variances should be investigated and corrective action should be taken to
prevent them from happening again.
 Non-material variances: Non-material variances are variances that
are not significant enough to affect the profitability of a business. Non-
material variances can be ignored or investigated, depending on the
circumstances.

There are three types of labour variances:

 Direct labour rate variance: The direct labour rate variance is the

difference between the actual rate paid to direct labour and the budgeted
rate. The direct labour rate variance can be caused by changes in the
wage rate or by changes in the mix of direct labour hours.
 Direct labour efficiency variance: The direct labour efficiency variance
is the difference between the actual hours worked and the budgeted
hours. The direct labour efficiency variance can be caused by changes in
productivity or by changes in the mix of direct labour tasks.
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 Total labour variance: The total labour variance is the sum of the
direct labour rate variance and the direct labour efficiency variance.

Variance analysis can be a valuable tool for businesses to improve their

profitability. By identifying and investigating variances, businesses can
identify areas where costs are out of control and take corrective action to
prevent them from happening again.