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Important Questions
in
Accounting and Financial Management

1. What is Profit centre?

2. Define the term ‘Costing’
3. Explain the meaning of ‘Prime Cost’.
4. (a) Define cost sheet. Explain the purpose of cost sheet.

5. Prepare a cost sheet from the following:

Direct materials Rs.50,000; Direct Wages Rs.15,000; Factory expenses Rs.5,000;
Office expenses Rs.1,000; Selling Expenses Rs.500
6. (a) What is material control? What are its objectives?

7. From the following particulars ascertain the amount of profit shown in profit and
loss account:
Profit shown as per cost books Rs.1,40,000; Depreciation shown excess in cost
books Rs.2,000; Interest on Investment received Rs.1,000; Provision made for
Income Tax Rs.40,000;Income received for share transfer Rs.150; Factory
overhead under recovered in cost books Rs.3,000; Office expenses under recorded
in financial books Rs.1,000.

8. What are the advantages and limitations of Cost accounting?

9. Explain the essentials of material control.
10. Define ‘Overheads’.
11. Explain the different methods of classifying overheads.
12. What is ‘Accounting Equation’?
13. What do you mean by Bank Reconciliation Statement?
14. What is Depreciation?
15. State any two methods of charging depreciation.
16. What is loss of stock’?
17. What is average clause in Fire Claims?
18. What is Prepaid Expenses?
19. What is Balance Sheet?
20. What is single entry system?
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21. Write a note on statement of affairs method.

22. Define ‘cost’.

23. Define the term ‘Costing’.
25. Write a note on ‘Tenders and Quotations’
26. Define ‘Cost Accounting’.
27.Explain about various accounting concepts and conventions
28 What do you mean by Reconciliation? .
29.Write a simple format of cost sheet.
30. What is the scope of Cost Accounting?
31. What is the need for Reconciliation of Profits by cost and financial accounts?
32. Define cost accounting. What are its objectives?
33. Define cost sheet. Explain the meaning and purposes of a cost sheet.
34. Difference between cost centre and profit centre.
35. Describe the reasons which cause difference between the profit disclosed by
cost and financial accounts.

36. Prepare cost sheet from the following particulars: Direct Materials Rs.1,00,000;
Direct wages Rs.25,000, Direct Expenses Rs.5,000; Factory Overheads Rs. 9,500;
Office and Administration Rs.3,000; Selling Overheads Rs.2500, Sales
Rs.1,89,500.
37. Explain various accounting conventions.
38.Discuss the objectives of Financial Management.
39.Prepare cost sheet from the following particulars: Direct Materials Rs.1,50,000;
Direct wages Rs52,000, Direct Expenses Rs.15,000; Factory Overheads Rs. 5900;
Office and Administration Rs.6,000; Selling Overheads Rs.5200, Sales
Rs.1,98,500.

40. Prepare Trading Account of Surya for the year ending 31.12.2006. From the
following
information: Opening Stock Rs.80000, Purchases Rs.860000, Freight Inward
Rs.52000, Wages Rs.24000, Sales Rs.1440000, Purchase Returns Rs.10000, Sales
Returns Rs.316000,Closing stock Rs.100000, Import Duty Rs.30000.
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40.From the following balances as at 31st December 2017 of a trader, prepare a

Trading and Profit & Loss A/c for the year 2017 and a Balance Sheet as on
that date:
Debit Balances: Salaries Rs.1500; Rent Rs.13000; Cash Rs.1000; Debtors
Rs.6000; Trade expenses Rs.6000; Purchases Rs.55000; Advances
Rs.2500o; Bank Balance Rs.6500.
Credit Balances: Creditors Rs.59000; Sales Rs.32000; Capital Rs.55000;
Loans Rs.15000.
Adjustments: The closing stock amounted to Rs.6500; One month’s Salary is
outstanding; one month’s rent has been paid in advance; Provide 5 per cent
for doubtful debts.

41.Prepare a flexible budget for the production and sale of 1200 units, 1600
units and 2000 units.
The following expenses for the production of 1000 units:

Particulars Per unit

Direct Materials 20
Direct wages 30
Administration expenses (Fixed) 20
Selling expenses (50% fixed) 10
Distribution expenses (25% fixed) 20
Total Cost 100

42.The expenses for the production of 5000 units in a factory are given as
follows:
Particulars Per unit
Materials 50
Labour 20
Variable Overhead 15
Fixed Overhead (Rs.50000) 10
Administration expenses (5% variable) 10
Selling expenses (20% fixed) 6
Distribution expenses (10% fixed) 5

Total Cost 116

You are required to prepare a budget for production of 7000 units.
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44. Define the term ‘Costing’

45. Prepare a Prime Cost from the following:
Direct materials Rs.50, 000; Direct Wages Rs.15,000; Factory expenses
Rs.5,000; Office expenses Rs.1,000; Selling Expenses Rs.500

46. Define cost sheet. Explain the purpose of cost sheet.

47. What are the objectives of Cost Accounting?

48. Distinguish between Financial Accounting and Cost Accounting.

49. What is accounting?

50. What is Double Entry System of Book-Keeping?
51. Define Trial Balance.
52. What is Ledger?
53. What do you mean by Outstanding Expenses? Give Two Examples
54. What are the different types of Accounts?
55. Mr. B & Bros started their business on 1 st April 2016 with Rs.50000
as their capital.
56. Following were the transactions.
2016 April 1 Paid into Bank Rs.20000;
April 2 purchased furniture from Modern Furniture Ltd., on credit Rs.3000;
April 6 sold goods on credit to sivakumar Rs.3500
April 8 Paid to Modern Furniture Ltd, cash Rs.2000
April 11 purchased goods from Mohan Rs.8800
April 15 Paid wages in cash Rs.200; journalize the above transaction

57. Prepare Trading Account of A for the year ending 31-12.-2016 from the
following information:
Opening Stock Rs.80000; Purchases Rs.860000; Freight Inward Rs.52000;
Wages Rs.24000; Sales Rs.1440000; Purchase Return Rs.10000; Sales
Return Rs.316000; Closing Stock Rs.100000, Import Duty Rs.30000.
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58. Draw up a trial balance, using imaginary accounts and figures.

59. What do you understand by accounting concepts and conventions?
60. From the following balances as at 31 st December 2017 of a trader, prepare
a Trading and Profit & Loss A/c for the year 2017 and a Balance Sheet
as on that date: Debit Balances: Salaries Rs.5500; Rent Rs.1300; Cash
Rs.1000; Debtors Rs.40000; Trade expenses Rs.600; Purchases Rs.25000;
Advances Rs.2500; Bank Balance Rs.5600. Credit Balances: Creditors
Rs.9500; Sales Rs.32000; Capital Rs.30000; Loans Rs.10000.
Adjustments: The closing stock amounted to Rs.9000; One month’s Salary is
outstanding; one month’s rent has been paid in advance; Provide 5 per cent
for doubtful debts.
61. Explain the concept of wealth in the concept of wealth maximization.
62. Write a note on time value of money.
63. What is pay-back period?
64. What is IRR?
65. Narrate about explicit cost.
66. Write the meaning of historical cost.
67. Write a note on informational content of dividend payment.
68. Note down the meaning transaction cost?
69. Write the meaning of net working capital.
70. Write the meaning of ordering cost.
71. Discuss the scope of Financial Management.
72. Explain the importance of Financial Management.
73. Explain the objectives of Financial Management.
74. What is capital budgeting? Explain its importance.
75. discuss different sources of finance.
76. Explain difference types of cost of capital.
77. Explain factors affecting dividend policy
78. Discuss the forms of dividends.
79. Discuss the factors affecting working capital requirement of a company.
80. Discuss the different motives for holding cash.
81. Discuss the objectives of Cash Management and Inventory Management.