Management Accounting

In the present complex business world, management accounting has become an integral part and useful tool for 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. VI Semester 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 the new syllabus prescribed for B.Com. (General & Hons.) VIth Semester.
• 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 the ‘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) Act, 2019.
• An important feature of the revised edition of this book is that all relevant chapters have been re-drafted as per the 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. In many places, explanatory notes have also been given to clarify the working of the 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 in one place.

Management Accounting Syllabus For B.Com. Semester VI of Chaudhary Devi Lal University, Sirsa

Unit-I : Introduction: Meaning, nature, significance and scope, rules and techniques of management accounting; the difference between cost accounting and management accounting, cost control, cost reduction, cost management.

Budgeting and budgetary control: the concept of budget and budgetary control objectives, merits, and limitations, budget administration, functional budgets, fixed and flexible budgets, zero base budget, program and performance budgets. Ratio analysis

Unit-II: Standard costing and variance analysis: concept and significance; advantages, limitations and applications, variance analysis – material, labor.

Marginal Costing: Absorption versus variable costing – distinctive features and income determination; cost-volume-profit analysis: break-even analysis-algebraic and graphic methods; contribution; P/V ratio, break-even-point; margin of safety: angle of incidence; determination of cost indifference point.

Unit-III: Responsibility Accounting: Concept, significance, types of responsibility centers, divisional performance measurement – financial measures. Funds flow statement Cash flow statement

Management Accounting Book Contents

1. Management Accounting: Nature, Scope, and Significance
2. Cost Control and Cost Reduction
3. Cost Management
4. Budgeting and Budgetary Control
5. Zero Base Budget
6. Program and Performance Budgeting
7. Standard Costing
8. Variance Analysis: Material and Labour Variance
9. Absorption and Marginal (Variable) Costing
10. Cost-Volume-Profit Analysis (Break-Even Analysis)
11. Responsibility Accounting
12. Ratio Analysis
13. Funds Flow Statement
14. Cash Flow Statement (as Per Accounting Standard-3)