BINAYAK ACADEMY

F M: 100

FMA

TIME: 3 Hr.

GROUP-A
1. From the following alternatives, choose and write serially the correct answer along
with its serial number against each bit:
[ 1 x 15 = 15 ]
a. Financial accounts record only:
i) Actual figures
ii) Budgeted figures iii) Standard figures
iv) Forecasted figures
b. The use of management accounting is:
i) Compulsory
ii) Optional
iii) Obligatory
iv) All of the above
c. Financial statement provides a summary of:
i) Assets
ii) Liabilities
iii) Cost
iv) Accounts
d. Financial statements are:
i) Estimated facts
ii) Anticipated facts
iii) Recorded facts
iv) None of these
e. Outstanding salary account is a
i) Personal account
ii) Real account
iii) Nominal account
iv) None of these
f. The accepted standard for current ratio is:
i) 2:1
ii) 1:1
iii) 3:1
iv) 1:2
g. One of the source of working capital is:
i) Debenture
ii) Equity share
iii) Trade credit
iv) Term loans
h. Financial statements are:
i) Interim report
ii) Final report
iii) Primary report iv) Secondary report
i. Management accounting is used to communicate with:
i) Share holders
ii) Outside agencies
iii) Both
iv) None of these
j. Preparation of financial statement is necessary under:
i) Income tax law
ii) Company law
iii) Both
iv) None of these
k. Dividend Payout Ratio is:
i)PAT Capital,
ii)DPS EPS,
iii) Pref. Dividend PAT,
iv) Pref. Dividend Equity Dividend.
l.________ is a statement of sources and applications of fund.
i)Income statement
ii)Funds flow statement
iii) Balance sheet
iv) All of the above
m. ___________ is a non trading income.
i)Appreciation in the value of fixed asset
ii)Provision for taxation
iii) interim dividend
iv) Amortisation of intangible asset
n. Contingent working capital is a _______ type of capital
i)Variable Working Capital
ii) Fixed Working Capital
iii) Gross Working Capital
iv) Net Working Capital
o. Which ratios are considered as most impotant for inter firm comparison:
i)Liquidity ratio
ii) Coverage ratio
iii) Composite ratio
iv) Primary ratio

2. Answer all the question

[ 1 x 15 = 15]

a. The oldest branch of accounting is ___________

b. __________ accounting was originated during industrial revolution.
c. Working capital is also known as _____________ capital.
d. ___________ has to be filed up under the provision of different tax laws.
e. ____________ enable the firm to maximise sales.
f. The effectiveness of managerial decision depends upon the __________ of the data presented
in financial and cost accounting.
g. Office expenses are analysed under ____________ accounting system.

h. The statement which is prepared under ________ concept is called cash flow statement.

State whether true or false.

i. Management accounting helps to take quick decision.
j. There is a possibility of psychological resistance from the existing employees due to
installation of management accounting.
k. Management accounting can be used for internal audit also.
l. Planning and forecasting helps financial accounting for future decision making.
m. Ratio Analysis is the only technique of analysis of financial statements.
n. Ratio Analysis provides the solution to the financial problems.
o. In Common Size Statements, each item is expressed as a percentage of some common items
(total).

GROUP-B
3. Explain the following within 3 sentences each (Any eleven)
[ 2 x 11 = 22 ]
Short Notes
a. Cash credit
b. Contingent liability
c. Capital Expenditure
d. Horizontal Analysis e. Secondary Ratio
f. Interim dividend
g. General reserve
h. Tax administration
i. Goodwill
j. What is trend analysis?
k. What are the uses of fund
l. What do you mean by analysis of financial statement?
m.Why is position statement prepared?
n.Define cost accounting.
4. Answer any six of the following questions.
[ 3 x 6 = 18 ]
a. What is internal audit?
b. Give three characteristics of ideal financial statement.
c. What is the need for calculating turnover ratio?
d. Describe the term Capital employed.

e. What do you mean by common size income statement?

f. What do you mean by schedule of changes in working capital?
g. State the rules of funds flow.
h. From the following information calculate net working capital requirement of Ramona
Garments.
Estimated annual sales = Rs. 650000
Gross profit ratio 25%
Average stock holding period 4 weeks
Average debt collection period 5 weeks
Average creditors payment period 6 weeks
Average cash balance required Rs. 19000
Average outstanding expenses expected Rs 7125
Provision for contingencies is to be maintained by 15 percent

GROUP-C
Answer any four of the following questions.
5.

[ 7.5 x 4 = 30 ]

Discuss the managerial and operative functions of Personal

Management.

6. What is working capital? Explain the factors affecting working capital requirements.
7. Discuss the objectives which can be achieved by the help of management accounting.

8. The following data supplied to you from the financial analysis report of a limited company.
Current ratio= 2.5
Liquid ratio = 1.8
Absolute liquid ratio = 1.2
Debt equity ratio = 1:2.5
Total quick asset = Rs. 540000
Total long term debt = Rs. 400000 Short term investment = Rs. 150000
Invetories = Rs. 150000
Prepaid expenses = Rs. 60000
Deferred Advertisement = Rs. 150000
7000 equity shares of Rs. 100 each fully paid up

Preference share capital = Nil

You are required to show the balance sheet of the company with maximum possible
financial information.
9.

Financial ratio analysis are conduced by four groups of analysts: managers, equity investors,
long-term creditors, and short-term creditors. What is the primary emphasis of each of these groups
in evaluating ratios?
10. From the following are the comparative Balance Sheet of Gupta & Co., you are required to
prepare (a) Schedule of Changes in Working Capital (b) Fund Flow Statement and (c) Fund From
Operations.
Balance Sheet
Liabilities
2002
2003
Assets
2002
2003
Rs.
Rs.
Rs.
Rs.
Share Capital
90,000 1,00,000
Goodwill
12,000
10,000
General Reserve
14,000
18,000
Buildings
40,000
36,000
Profit & Loss Alc
19,500
12,000
Machinery
37,000
36,000
Provision for Taxation 16,000
17,000
Stock
30,000
25,400
Sundry Creditors
8,000
5,400
Sundry Debtors
20,000
22,200
Bills Payable
6,200
1,300
Cash at Bank
6,600
15,200
Provision for Doubtful

Debts

1,900
2,100
Investments
10,000
1,55,600 1,55,800
1,55,600
Additional Information
(1) Depreciation charged on Machinery was Rs. 4000 and on building Rs. 4000.
(2) Interim Dividend paid during 2003 was Rs. 7500.
(3) Provision of Rs. 5000 was made for taxation during the 2003.

11,000
1,55,800

All The Best