DBB2107 MANAGEMENT ACCOUNTING JULY – AUGUST 2025

Description

SESSION	July – August 2025
PROGRAM	Bachelor OF BUSINESS ADMINISTRATION (BBA)
SEMESTER	3
course CODE & NAME	DBB2107 management ACCOUNTING

 

 

 

Assignment Set – 1

 

 

Q1. Write a note on:

1. Functions of Management Accounting
2. Difference between Management accounting and financial accounting 5+5

Ans 1.

1. Functions of Management Accounting

Providing Useful Information for Decision-Making

One of the primary functions of management accounting is to supply accurate, timely, and relevant financial information to managers. This includes cost data, profitability analysis, budget reports, and variance analysis. Managers use this information to make decisions related to production levels, pricing, investment, resource allocation, and cost optimisation.

Planning and Forecasting

Management accounting plays a major role in planning for the future. Through budgeting,

 

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Q2.Discuss the advantages and limitation of Ratio Analysis in financial decision-making.  5+5

Ans 2.

Advantages and Limitations of Ratio Analysis in Financial Decision-Making

Ratio analysis is a widely used analytical tool that helps evaluate a company’s financial performance by establishing relationships between different items in financial statements. It assists managers, investors, creditors, and analysts in making informed decisions regarding liquidity, profitability, solvency, and operational efficiency. However, like all analytical tools, ratio analysis has both strengths and inherent limitations, which must be understood for

 

 

Q3. Statement of Profit and Loss of XYZ Ltd.

Particulars	31st March 2023	31st March 2024
I.                    Revenue from Operation (Sales)	7,00,000	8,50,000
II.                  Other Income	30,000	30,000
III.                Total Revenue(I+II)	7,30,000	8,80,000
IV.               Expenses a.      Material Consumed   b.      Manufacturing Expenses   c.       Other Expenses	3,30,000   1,20,000     1,20,000	4,20,000   1,30,000     1,30,000
Total	5,70,000	6,80,000
V.                 Profit Before Tax (III-IV)	1,60,000	2,00,000
VI.               Tax @ 50%	80000	1,00,000
VII.             Profit After Tax (V-VI)	80,000	1,00,000

 

1. Prepare a Common Size Statement of Profit and Loss?
2. As a management accountant, you must write an interpretation of the common size statement of profit and loss.

Ans 3.

(a) Common Size Statement of Profit and Loss of XYZ Ltd.

(Base: Revenue from Operations / Sales = 100%)

Year 2022–23: Sales = ₹7,00,000

Year 2023–24: Sales = ₹8,50,000

Particulars

2022–23 Amount (₹)

2022–23 % of Sales

2023–24 Amount (₹)

2023–24 % of Sales

 

 

 

 

Assignment Set – 2

 

 

Q4. What do you mean by Cash Flow Statement. How Cash Flow Statement is different from Fund flow Statement.      4+6     

Ans 4.

Cash Flow Statement and Difference Between Cash Flow & Fund Flow Statement

Cash Flow Statement

A Cash Flow Statement is a financial statement that summarises the cash inflows and cash outflows of a business during a specific accounting period. It shows how cash is generated from operating activities, how it is used or raised through investing and financing activities, and how the overall cash position changes between the beginning and end of the period. The primary purpose of this statement is to analyse the liquidity position of the firm and assess its ability to generate cash for meeting obligations, paying dividends, and financing expansion. It

 

Q5. XYZ company expects the following net cash inflows for the next five years: Rs 20,000, Rs.25,000, Rs.30,000, Rs.35,000, and Rs.40,000 respectively from the Project. The initial investment of project is Rs.50,000.

Calculate:

1. Payback period
2. Post payback profitability
3. Net present value when the discount rate is 10%. 3+3+4 10

Ans 5.

Payback Period, Post-Payback Profitability & NPV

Given:

Initial Investment = ₹50,000

Annual cash inflows (Years 1–5):

20,000; 25,000; 30,000; 35,000; 40,000

Discount rate = 10%

 

 

Q6. Write a note on :

1. Human resource accounting
2. Divisional Performance analysis in private sector organizations 5+5

Ans 6.

(a) Human Resource Accounting

Human Resource Accounting (HRA) refers to the process of identifying, measuring, and reporting the value of human resources in financial terms. Modern organisations increasingly recognise that employees—through their knowledge, skills, experience, and innovative capability—are vital contributors to long-term growth. Unlike physical assets that depreciate over time, human assets appreciate in value when effectively trained and developed. The purpose of HRA is to provide management with more meaningful information about the cost