BCA DCA2204 Principles of Financial Accounting and Management

Description

SESSION	NOV-DEC 2023
PROGRAM	BACHELOR of COMPUTER ApplicationS(BCA)
SEMESTER	IV
course CODE & NAME	DCA2204 – PRINCIPLES OF FINANCIAL ACCOUNTING AND MANAGEMENT

 

 

Set – 1

 

 

1.a Explain the double entry Accounting.

1. Explain entity concept and Matchingconcepts.

Ans 1.

1. Double entry Accounting

Double-entry accounting is a crucial system in the field of accounting, designed to ensure the accuracy and integrity of financial record-keeping. This system is based on a simple yet powerful principle: every financial transaction affects at least two different accounts. The essence of double-entry accounting lies in its ability to maintain a fundamental balance, as expressed in the accounting equation: Assets = Liabilities + Equity. This equation is the cornerstone of

 

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Q 2. Pass journal entries for the following transactions.

1. Mangesh started business with cash ₹ 2,00,000.
2. Purchased goods from Dhoni on credit ₹ 80,000.
3. Sold goods to Santoshfor cash ₹ 120,000.
4. Received Dividend ₹1,000 from RelianceIndustry.
5. Paidrentof ₹3,000to Rakesh.

Ans 2.

Introduction to Journal Entries

Journal entries are a fundamental component in the accounting process. They are the first step in the accounting cycle, acting as a chronological record of all financial transactions in an organization. Each entry typically involves a debit and a credit, ensuring the accounting equation (Assets = Liabilities + Equity) remains balanced. Let’s examine the journal entries for the specified transactions of a business.

Journal Entry for Business Initiation

 

 

 

3. a.Explain the concept of liquidity decision.
4. Explain the factors affecting financial planning.

Ans 3.

1. Liquidity Decision

Liquidity decision is a critical aspect of financial management that involves the process of managing a company’s cash flow and its ability to meet short-term obligations without incurring unacceptable losses. This concept revolves around the balance between liquidity and profitability, ensuring that the firm has enough liquid assets, like cash and marketable securities, to cover its immediate and short-term liabilities. The primary objective of liquidity management is to maintain a balance where the company has sufficient funds to meet its current liabilities

Set – 2

 

The following information is in respect of Material       

Re-order quantity = 6000 units

Re-order period = 4 – 6 weeks 

Maximum Consumption = 1600 units per week

Normal consumption = 1200 units per week

Minimum consumption = 1000 units per week 

Emergency Re- order period = 2 weeks 

Calculate: (a).Re-order level (b) Minimum Level (c) Maximum Level (d) Average stock level (e) Danger Level

Ans 4.

The calculations are based on the provided data: reorder quantity, reorder period, and various consumption rates.

1. Re-order Level

The reorder level is the point at which an order should be placed to replenish stock before it runs out

 

 

5. a. Explain factors affecting the composition of working capital.
6. Discuss the functional classification of cost

Ans 5.

1. Factors Affecting the Composition of Working Capital

Working capital, the lifeblood of a business, is the capital used in its day-to-day trading operations. It is calculated as the difference between a company’s current assets and current liabilities. The composition of working capital is crucial for efficient business operation and is

 

 

3. The summarized final accounts of two companies are as follows: 2.5*4

Balance Sheet

Liabilities	X Ltd Rs.	Y Ltd Rs.	Assets	X Ltd Rs.	Y Ltd Rs.
Share Capital Reserves 8% debentures	88,000 42,900 22,000	88,000 35,200 22,000	Fixed Assets Current Assets Less: Current Liabilities	1,21,000 1,25,400 93,500	96,800 1,03,400 55,000
	1,52,900	1,45,200		1,52,900	1,45,200

 

Revenue Statement for the year

Particulars	X Ltd (Rs.)	Y Ltd. (Rs.)
Sales Less: Cost of Sales Gross Profit Less: Operating Expenses Net Profit before Tax Less: Tax Profit after Tax	3,30,000 2,37,600 92,400 63,800 28,600 12,100 16,500	2,64,000 1,98,000 66,000 44,000 22,000 9,240 12,760

 

You are required to calculate the following ratios for X and Y Ltd.

(1) Current Ratio (2) Capital gearing ratio (3) Gross profit ratio (4) Net profit ratio

Ans 3.

To understand the financial performance and position of X Ltd. and Y Ltd., we will calculate and analyze four key financial ratios: the Current Ratio, Capital Gearing Ratio, Gross Profit Ratio, and Net Profit Ratio. These ratios provide valuable insights into the companies’ liquidity, financial