Income from business-2

1. Management Accounting SCDL By Prof. AUGUSTIN AMALADAS M.COM ., AICWA.,PGDFM.,B.Ed.

2. Structure of the syllubusChapter-1 Financial accounting 1. Introduction 2. Basic Accounting 3. Process of accounting 4. BRS 5. Rectification of Errors Final accounts

3. Cost Accounting 6. CONCEPTS 7. ELEMENTS OF COST 8. MATERIAL 9. LABOUR 9. OVER HEADS 10. MARGINAL COSTING techniques 11. BUDGETARY CONTROL 12.STANDARD COSTING TECHNIQUES 13. UNIFORM COSTING CONTROL

4. Management accounting Costs and Budgeting

5. FLOW OF CASH/SHORT TERM AND LONG TERM information Accounts payable RAW mATERIAL ADR Long term loans Preference Shares Bad debts Accounts receivable Debtors Work in progress information Overheads Labour Equity shares CASH GDR information Information

6. FLOW OF CASH - LONG TERM ADR Long term loans Preference Shares Equity shares CASH Short term GDR land furniture investments goodwill building Patent rights Know how Copy right

7. FLOW OF CASH-SHORT TERM information Accounts payable RAW mATERIAL Bad debts Accounts receivable Debtors Work in progress information Overheads Labour information Information Discounting bills creditors Cash credit Bank overdraft Sale of investments Bad debts Bad debts Issue of long term funds Sale of fixed assets Bank overdraft cash cash

8. Accounting Labour laws marketing Costing technical technology political production statistical Share market MANAGEMENT ACCOUNTS INFORMATION INFORMATION INFORMATION INFORMATION INFORMATION

12. Differences between cost accounting/Management Accounting/financial accounting 1.Collection Analysis and decision making 2.Management 3.Future 4.Non-statutory 5.Using various techniques 6.Supply the required information To correct persons on time 1.Estimation and control 2.Internal 3. Future 4. Not allorganisations 5.Costing records 6.Cost audit once in two years 1.Recording 2.Outsiders 3.Past 4.Statutory 5.Preparation of profit/lossA/c And balance sheet 6.Audit& reporting Management Accounts Cost Accounts Financial Accounts

13. Users of information organisation shareholders public Benefactors government banks Debenture holders Loan vendor Preference shareholders creditors debtors customers dividend liquidity Dividend/value in the share market Interest/return of capital Interest/return of capital Timely payment Timely supply Good product Less pollution Good name tax

14. Techniques in management accounting Management Accounting Cost accounting Mathematics operation research statistics Ratios Financial accounts Budgetary control Cash flow statement FFS Trend percentages Marginal costing Variance analysis Comparitive statement Common size statements

36. Terms(page-20) Debentures Equity shares Preference shares Trade discount Cash discount Debit note Credit note Creditors Balance sheet Accounts receivable Accounts payable Assets Liabilities Capital Drawings Debtors depreciation Polio Brought forward(B/f) Trail balance Account Debit Credit Journal Ledger Narration casting

37. Terms used in costing Factory over heads Office and administration overheads Administration section Stationary, salaries to accounts staff, postage, internet, bank charges, audit, administration expenses, depreciation Indirect material Indirect labour Indirect expenses + Total cost Factory Consumable stores, cotton waste ,oil Wages to storekeeper, foremen, works manager’s salary, repairs to factory building, insurance to machinery factory lighting Indirect material Indirect labour Indirect expenses + Works cost Factory Raw material; cost per unit can be identified, in the individual cost centre; Engaged in manufacturing process Hire charges of machinery-direct expenses Direct material Direct labour Direct expenses Prime cost

38. Selling and distribution Sales department Packing material, samples,salaries to sales personnel,commission to sales manager, warehouse charges,advertisement,repairs to distribution van, discount to customers Indirect material Indirect labour Indirect overheads Cost of sales+ Profit Sales

82. Problem:6 page-139 700 400 2700 400 1100 2700 400 a.Machinery Dr. To Purchases a/c To Wages a/c b.Suspese a/c Dr. to Mohan a/c Cash a/cDr. To Mohan amount amount particulars

83. 700 900 600 17000 1200 700 900 600 18200 Mohan a/c Dr. To sales susp. c. Suspensea/c ToYogesh a/c d.Furniture a/cdr To P/L a/c e.Machi.a/cdr. To Purchases To trade exp. particulars

84. Life education Thomas Cooper –Dictionary

87. The bottom line is that the organization is out "hard" or "real" money.[1 Examples: · Hardware and software purchases · Professional services · Maintenance · Labor · Medical benefits · Insurance · Internet Service Provider fees · Wide area network fees

103. Treatment of period and product costs Product code Period code Manufacturing cost Non manufacturing costs Recorded as an asset In the balance sheet And becomes an Expense in the P/L A/C When the product Is sold Recorded as an Expense in the P/L A/c In the current Accounting year sold unsold

106. Variable, fixed, semi variable and semi fixed. direct material, direct labour and direct expenses. Both fixed and variable elements in the costs. Variable costs Semi variable cost Supervisors’ salary, leasing charges for cars, depreciation on building In the long run all costs are variable. Fixed cost

109. Red Car, Inc. Cost of Goods Manufactured Schedule For the Year Ended December 31, 20X0 Direct materials used Beginning raw materials inventory Add: Cost of raw materials purchased Total raw materials available Less: Ending raw materials inventory Total raw materials usedDirect laborManufacturing overhead Indirect materials Indirect labor Depreciation—factory building Depreciation—factory equipment Insurance—factory Property taxes—factory Total manufacturing overheadTotal manufacturing costsAdd: Beginning work-in-process inventoryLess: Ending work-in-process inventoryCost of goods manufactured