Management Accounting

In the present complex business world, management accounting has become an integral part and useful tool of a management system. In fact, management accounting represents a happy blending of two older professions of ‘Management’ and ‘Accounting’, which leads to the success of a business concern through accounting control and managerial efficiency. The present text has been planned and designed to cope with the needs of B.Com. students and to present the subject in simple language and lucid style.

Salient features of the Management Accounting Book:

• The subject-matter has been arranged and systematized strictly according to course prescribed.
• In this revised edition chapters on RATIO ANALYSIS and FUNDS FLOW STATEMENT have been thoroughly revised and enlarged.
• Chapter of CASH FLOW STATEMENT has been written strictly as per AS-3 and AS-4 (Revised) Contingencies and Events Occurring after the Balance Sheet Date. The revised AS-4 prescribes that ‘proposed dividend’ will be treated as ‘Contingent liability’ instead of short-term provisions.
• Rate of Income Tax @ 25 percent on companies has been applied in all numerical questions as per amendment made by the Finance (No. 2) Bill, 2019.
• An important feature of a revised edition of this book is that all relevant chapters have been re-drafted as per revised format of Balance Sheet and Statement of Profit & Loss given in Schedule III of the Companies Act, 2013. In this context, a terminology has also been used as per new formats.
• The language and style of presentation are very simple and the subject-matter has been divided into various headings and sub-headings so as to give flow in studying this numerical subject.
• Both theoretical and numerical aspects of the subject have been given due importance. The numerical illustrations have been carefully graded with supporting theoretical background. At many places, explanatory notes have also been given to clarify the working of solution.
• Numerical illustrations and questions have been arranged in a systematic and scientific sequence from simple to complex.
• Illustrations and questions both have been arranged in an identical sequence so that students can easily solve the questions after understanding the illustration in the same order.
• In the selection of illustrations and questions priority has been given to university examination papers so that students may make practice according to that standard.
• Short answer and objective type questions (Theoretical & Numerical) have also been incorporated according to a new examination pattern of different universities.
• Standard but simple formulae have been used in different chapters and at the end of each chapter, all formulae relevant to that chapter have been given at one place.

Management Accounting Syllabus For B.Com. Part III of Babasaheb Bhimrao Ambedkar Bihar University, Muzaffarpur 

1. Management Accounting: Meaning and Nature, management Accounting as distinguished from Financial Accounting and Cost Accounting: Scope and limitations of Management Accounting.
2. Financial Statements : Concept, nature and limitations of financial statement.
3. Methods and techniques used in analysis financial statements comparative financial and operating statement-common size statement-Trend percentage or Trend Analysis.
4. Financial Ratios.
5. Statement of changes in financial position, Fund Flow and cash flow statements Meaning and distinction, their preparation.
6. Elementary idea of Variance Analysis and Break-Even Analysis

Management Accounting Book Contents

1. Management Accounting (An Introduction)
2. Financial Statements (Meaning, Type and Limitations)
3. Analysis and Interpretation of Financial Statements
4. Ratio Analysis
5. Funds Flow Statement
6. Cash Flow Statement (as per Accounting Standard–3)
7. Absorption Costing and Marginal Costing
8. Marginal Costing (as a tool for Decision Making)
9. Differential Costing
10. Cost-Volume-Profit Analysis (Break-Even Point)
11. Budget and Budgeting
12. Budgetary Control
13. Fixed and Flexible Budgeting
14. Cash Budget
15. Sales and Production Budget
16. Control Ratios
17. Zero Base Budgeting
18. Responsibility Accounting
19. Performance Budgeting
20. Standard Costing
21. Variance Analysis (Material & Labour Variance)
22. Overhead (Two-Way) Variance Analysis