Management accounting

Cover......Page 1 Management Accounting......Page 4 Copyright......Page 5 Contents......Page 8 Preface......Page 16 Definition of Management Accounting......Page 18 Scope of Management Accounting......Page 19 Objectives of Management Accounting......Page 20 Role or Functions of Management Accounting......Page 21 Utility of Management Accounting......Page 22 Limitations of Management Accounting......Page 23 Tools and Techniques of Management Accounting......Page 24 Management Accounting and Financial Accounting......Page 25 Chapter Review Summary......Page 26 Chapter Review Quiz......Page 27 Exercise......Page 28 Characteristics of Financial Statements......Page 29 Income Statement or Profit & Loss Account......Page 30 Statement of Changes in Financial Position......Page 31 Relationship Between Income Statement and Balance Sheet......Page 32 Objectives of Financial Statement Analysis......Page 33 Traditional Approach to Financial Statement Analysis......Page 34 Types of Financial Statement Analysis......Page 35 Techniques/Tools of Financial Statement Analysis......Page 36 Concept of Comparative Financial Statement Analysis......Page 37 Concept of Common-size Financial Statement Analysis......Page 38 Disadvantages of Common-size Statement......Page 39 Disadvantages of Trend Analysis......Page 40 Worked-out Problems......Page 41 Chapter Review Quiz......Page 65 Exercise......Page 66 What is a Ratio?......Page 74 Role or Importance of Ratio Analysis......Page 75 Limitations of Ratio Analysis......Page 76 Different Kinds of Ratios or Classification of Ratios......Page 77 Computation of Proprietors’ Fund, Capital Employed, Working Capital......Page 78 Balance Sheet Ratios......Page 82 Revenue Statement Ratio......Page 85 Mixed or Composite Ratio......Page 88 DU Pont Analysis......Page 92 Ratios to be used in Determining Solvency, Performance, Managerial Efficiency etc. of an Enterprise......Page 93 Different Ratios at Glance......Page 94 Worked-out Problems......Page 96 Chapter Review Summary......Page 194 Chapter Review Quiz......Page 195 Exercise......Page 196 Difference Between Cash and Fund......Page 216 Uses of Cash Flow Statement......Page 217 Limitations of Cash Flow Statement......Page 218 Differences Between Cash Flow Statement and Fund Flow Statement......Page 219 Cash Flow Statement as Prescribed in AS-3......Page 220 Cash Flows from Investing Activities......Page 221 Cash Flows from Financing Activities......Page 222 Proforma of Cash Flow Statement under Indirect Method......Page 223 Fundamental Differences Between Cash Flow Statement as per AS-3 and Traditional Method......Page 224 Worked-out Problems......Page 225 Chapter Review Summary......Page 331 Chapter Review Quiz......Page 332 Exercise......Page 334 Generally Accepted Concept of Fund......Page 358 Limitations of Fund Flow Statement......Page 359 What is Fund from Operation?......Page 360 Direct Approach of Computation of Fund from Operation......Page 361 Is Depreciation a Source of Fund?......Page 363 Distinction between Fund Flow Statement and Cash Flow Statement......Page 364 Worked-out Problems......Page 365 Chapter Review Summary......Page 422 Chapter Review Quiz......Page 423 Exercise......Page 424 Need for Working Capital......Page 437 Classification of Working Capital on the Basis of Concept......Page 438 Sources of Temporary Working Capital......Page 439 Working Capital or Operating Cycle......Page 440 Procedure for Estimation/Forecasting of Working Capital......Page 441 Different Approaches of Estimation/Forecasting of Working Capital......Page 442 Worked-out Problems......Page 444 Chapter Review Summary......Page 476 Exercise......Page 477 Budgetary Control......Page 484 Limitations of Budgetary Control......Page 485 Zero-Based Budgeting......Page 486 Classification on the Basis of Period......Page 487 Classification on the Basis of Function or Coverage......Page 488 Worked-out Problems......Page 490 Chapter Review Summary......Page 538 Chapter Review Quiz......Page 539 Exercise......Page 540 Features of Standard Costing......Page 554 Advantages of Standard Costing......Page 555 Comparison between Standard Costing and Budgetary Control......Page 556 Purposes of Variance Analysis......Page 557 Material Variances......Page 558 Labour Variances......Page 560 Variable Overhead Variances......Page 561 Fixed Overhead Variances......Page 563 Sales Value Variances......Page 565 Sales Margin (Profit) Variances......Page 566 Formulae of Various Variances at a Glance......Page 568 Worked-out Problems......Page 573 Chapter Review Summary......Page 619 Chapter Review Quiz......Page 620 Exercise......Page 621 Features of Absorption Costing......Page 632 Variable Costing......Page 633 Limitations of Variable Costing......Page 634 Income Determination under Absorption Costing and Variable Costing......Page 635 Distinction between Absorption Costing and Variable Costing......Page 636 Worked-out Problems......Page 637 Chapter Review Summary......Page 644 Chapter Review Quiz......Page 645 Exercise......Page 646 Concept of Marginal Cost......Page 649 Advantages of Marginal Costing......Page 650 Objectives of CVP Analysis......Page 651 Elements of CVP Analysis......Page 652 Presentation of BE Chart......Page 657 Mathematical Representation of CVP Analysis......Page 658 Different Formulae of CVP Analysis at a Glance......Page 659 Worked-out Problems......Page 661 Chapter Review Summary......Page 706 Chapter Review Quiz......Page 708 Exercise......Page 709 Cost Concepts in Decision Making......Page 720 Concept of Relevant Cost and Relevant Revenue......Page 721 Concept of Key or Limiting Factor......Page 722 Make or Buy Decision......Page 723 Worked-out Problems......Page 724 Chapter Review Summary......Page 749 Exercise......Page 750 Features of Capital Budgeting......Page 760 Types of Capital Budgeting Decisions......Page 761 Concept of Discounted Cash Flow......Page 762 Non-discounted Techniques......Page 763 Discounted Cash Flow Techniques......Page 764 Worked-out Problems......Page 766 Chapter Review Summary......Page 784 Chapter Review Quiz......Page 785 Exercise......Page 786 Meaning and Concept of Responsibility Accounting......Page 792 Advantages or Benefits or Purposes of Responsibility Accounting......Page 793 Profit Centre......Page 794 Responsibility Reporting......Page 795 Chapter Review Summary......Page 796 Exercise......Page 797 Appendix......Page 800 Management Accounting is a comprehensive textbook with a focus on the essentials, designed to help students understand the basic concepts and practice underlying management accounting in a systematic manner. A balanced approach between theoretical and numerical aspects of the subject has been adopted to ensure ease and clarity in learning. The lucid writing, contents and organization of the chapters make the book eminently suitable for the undergraduate students of various Indian Universities