This document provides details about a sample assignment for the first semester of an MBA program. It includes 3 questions related to accounting and finance concepts. It discusses accounting as an information system, the roles of an accountant in planning and controlling a large organization, comparative balance sheets, cost and variance analysis, and cash management strategies. The document is a sample assignment that students would complete to demonstrate their understanding of key course concepts.

1. SAMPLE ASSIGNMENT FIRST SEMESTER
MS-04 JAN JUNE 2016
Course Code MS - 04
Course Title Accounting and Finance for Managers
Assignment Code MS-04/TMA/SEM - I/2016
Assignment Coverage All Blocks
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1. “Accountancy is an Information System”. Do you agree? Substantiate your answer with reasons. How does
an Accountant help in planning and controlling a large commercial organization? Explain.
I agree with the above statement because an information system is a -------------------------------------------------------------
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-------------------------------------------------------------------------------------------------. Although an AIS can be a manual system,
today most accounting information systems are computer-based.
Functions of an Accounting Information System
Accounting information systems have three basic functions:
 The first function of an ------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------from source documents,
recording the transactions in journals, and posting data from journals to ledgers.
 The second -------------------------------------------------------------------------------------------, including producing
managerial reports and financial statements.
 -------------------------------------------------------------------------------------------------------------------------.
Parts of an Accounting Information System
An accounting information system typically has six basic parts:
 ------------------------------------------------------------------------------------------------------------------- analysts
 Procedure and ----------------------------------------------------------------------------------------------, and processed
 Data including ----------------------------------------------------------------------- an AIS
 Software -------------------------------------------------------------------------------------------------------------------
 Information technology ----------------------------------------------------------------------------- AIS
 Internal -------------------------------------------------------------------------------------- protect data
The Reliability of Accounting Information Systems
Because an AIS stores and provides such valuable business information, reliability is vitally important. The
American Institute of CPAs (AICPA) and Canadian Institute of Chartered Accountants (CICA) have identified five
basic principles important to AIS reliability:
 Security - Access ---------------------------------------------------------------------------------------- authorized.
 Confidentiality - ------------------------------------------------------------------------------------------- disclosure.
 Privacy - The ------------------------------------------------------------------------------------------ an appropriate
manner.

3.  Processing integrity - The ------------------------------------------------------------------------------- authorization.
 Availability - The ------------------------------------------------------------------------------------------- obligations.
Accountant help in planning and controlling a large commercial organization
An accountant performs financial functions related to the collection, accuracy, recording, analysis and presentation
of a business, organization or company's financial operations. ------------------------------------------------------------------------
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--------------------------------------------------------------------------------------, who may present the company's financial data to
people within and outside of the business. Generally, the accountant can also deal with third parties, such as vendors,
customers and financial institutions.
Financial Data Management
The accounting structure of a company is an essential component to business operations. One of the primary roles of
an accountant usually involves the collection and maintenance of financial data, as it relates to a company or firm.
The accountant ensures that financial records are maintained in compliance with lawful and accepted procedures and
policies on the corporate level. ----------------------------------------------------------------------------------------------------------------
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---------------------------------------------- procedures.
Analysis And Advice
As analysts, accountants may perform certain types of analysis using financial data that is used to assist in making
business decisions. -------------------------------------------------------------------------------------------------------------------------------
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-------------------------------. Recommendations may also involve developing efficient resources and procedures, while
providing strategic recommendations for specific financial problems or situations.
Financial Report Preparation
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-----. Reports compiled may be used in connection with the continual support and management of budgetary forecast
activities. The financial reports may be used by a financial director or officer for the development, implementation
and operation of a company's financial software and systems, such as Hyperion, Excel and CODA Financial
Management.
Compliance
An accountant may also be responsible for ensuring that all financial reporting deadlines are met, internally and
externally. For example, --------------------------------------------------------------------------------------------------------------

4. -------------------------------------------------------------------------------------------------. The accountant also usually
coordinates the audit process by assisting with financial data preparation.
External Busines Affiliations
Often, accountants must work with financial professionals from the four major fields of the industry: public,
management, internal auditing and government accounting. ---------------------------------------------------------------------------
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-----------------------------------------------------------------------------------. Accountants may also work with government
officials who are examining and maintaining the financial records of the private business for whom an accountant is
employed, in connection with taxation and government regulations.
2. The following are the Balance Sheets of XYZ Ltd. for the years ending 31st December, 2014 & 2015.

5. Prepare the comparative balance sheet and study its financial position.
Comparative balance sheet-
Particulars (A) 2014 (B) 2015 (C)
Inc. or Dec. (D)
C.B.
Inc. or Dec. (D)
Percentage
A. Assets
------------------------- 240000 ------------ 10000 --------------
B. Instruments - - - -
C. ---------------------
Debtor 100000 125000 ------------- 25%
--------------------- -------------- 50000 ----------- ------------
---------------------- 20000 ------------0 --------------- -------------
Prepaid Exp. --------------- ------------ --------------- 20%
--------------------- --------------- 53000 ------------------ -----------
-------------------- 10000 ----------- --------------- --------------
-------------- 220000 ----------- ------------
Total (-------------------) -------------- ------------ ------------- 47.82
-------------------------
A. ----------------- 200000 -------------- 130000 --------------
Preferance Share Capital -------------- ---------------- -------------- -------------
---------------- 15000 --------------- -------------- 33%
-------------- ------------ 30000 --------------- ----------
Total --------------------- ------------ ----------------- ------------- ------------
Bank -------------------- 50000 ---------- 0 0
------------------- ------------ 50000 ----------- --------------
Proposed Dividend ------------ ------------ ----------- --------------
--------------------------------- -------------- 150000 ------------- -------------
Total -------------- 660000 ---------------- -------------

6. Financial position-
As we saw in the above balance sheet of -------------------------------------------------------------------------------------------
-------------------------------------------------------------------- This showing ----------------------------------------- position of
the company.
3. ABC Ltd. maintains their books of Cost Accounts under standard costing system in which the work-in-
progress is debited with actual costs and credited with standard costs.
The standard cost card for product X shows:
Based on Budgeted Factory overhead Rs. 7,500 and budgeted Labour hours 3,000.
The following cost and production data are available for the month of March, 1998 in respect of product X.
Cost data
1. Actual materials used in production 1,100 pcs @ Rs. 1.60
2. Analysis of pay Roll shows direct labour hrs. 2,700pcs @ Rs. 1.20
3. Factory overhead as per Factory O.H control account Rs. 7, 425
(to be charged to product X)
Production data
Units completed 950 units
Units in closing WIP 100 units 50% completed
Cost of units remaining work- in- progress Account is transferred to work- in- progress Inventory Account.
You are required to compute all possible variances.

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4. As a Manager what strategy you will adopt so that you are able to efficiently manage the cash in business?
In some ways, managing cash flow is the most important job of business managers. If at any time a company fails to pay an
obligation when it is due because of the lack of cash, the company is insolvent. -----------------------------------------------------------
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9. Cash management is particularly important for new and growing businesses---------------------------------------------------------------
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------------------------------------------------------------------------------------------. It is, somewhat ironically, easier to borrow money
when you have money. Finally, poor cash flow makes it difficult to hire and retain good employees.
It is only natural that major business expenses are incurred in the production of goods or the provision of services. -----------------
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----------------------------------------------------------------------------------------------------------------------------------------. These factors
make effective cash management an essential part of any business's financial planning. Cash is the lifeblood of a business.
Managing it efficiently is essential for success.
As a manager I will adopt following strategies to efficiently manage the cash in business-
When cash is received in exchange ---------------------------------------------------------------------------------------------------------------
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------------------------------------------, monitoring collections and disbursements, establishing effective billing and collection
measures, and adhering to budgetary restrictions.
CASH COLLECTION AND DISBURSEMENT
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Cash management attempts, among other things, to decrease the length and impact of these "float" periods. A collection receipt
point closer to the customer-;perhaps with an outside third-party vendor to receive, process, and deposit the payment (check)-;is
one way to speed up the collection. ---------------------------------------------------------------------------------------------------------------
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------------------------------------------. The most important element in ensuring good cash flow from customers, however, is
establishing strong billing and collection practices.
Once the money has been collected, then proceed to concentrate the cash into one center. The rationale for such a move is to
have complete control of the cash and to provide greater investment opportunities with larger sums of money available as
surplus. There are numerous mechanisms that can be employed to concentrate the cash, such as wire transfers, automated
clearinghouse (ACH) transfers, and checks. The tradeoff is between cost and time.
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10. , the Current ratio (current assets divided by current liabilities), the Quick ratio (current assets less inventory, divided by current
liabilities), and the Net Liquid Balance (cash plus marketable securities less short-term notes payable, divided by total assets).
The higher the number generated by the liquidity measure, the greater the liquidity-;and vice versa. However, there is a tradeoff
between liquidity and profitability which discourages firms from having excessive liquidity.
CASH MANAGEMENT IN TROUBLED TIMES
During downturns in the economy, declines in sales and poor cash management can spell the death knell to a small or startup
business. In tough times, such as the recession, banks may tighten up the revolving credit or short-term loans that businesses
often rely on to sort out cash management troubles. Some business owners resort to trying to keep their companies afloat by
raiding their personal finances -- mortgaging their homes, maxing out credit cards, and/or cashing in their 401(k)s.
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Even during economic boom times, many small businesses experience cash flow difficulties, especially during their first years of
operation. But entrepreneurs and managers can take steps to minimize the impact of such problems and help maintain the
continued viability of the business. I will suggest following steps to address temporary cash flow problems include:
 Create a -------------------------------------------------------------------------------------------------------------- term (1-2 years).
 Redouble efforts to ------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------…. If deliveries do not automatically trigger an invoice,
establish a set billing schedule, preferably weekly." Businesses should also include a payment due date.
 Offer small --------------------------------------------------------------------------------------------.
 ------------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------, but in certain cases, obtaining some cash-;even if your company is not at
fault in the dispute-;for products sold/services rendered may be required to pay basic expenses.
 Closely monitor and prioritize all cash disbursements.
 Contact creditors (------------------------------------------------------------------------------------------------------------------------
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-------------------------------------------------------. "Better credit terms translate into borrowing money interest-free," states
the Journal of Accountancy.
 Liquidate superfluous inventory.
 Assess ---------------------------------------------------------------------------- disabling the business, such as payroll or non-
strategic goods and/or services with small profit margins.
Other best practices include:
1. Using technology to shorten the cash conversion cycle- By -----------------------------------------------------------------------------
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11. ----------------------------------------------------------------------------proactive steps to resolve delinquent accounts or take advantage
of supplier discounts.
2. Optimizing your financial functions- There are a wide range of optimization techniques I can adopt to improve cash
management. For instance, effective accounts receivable practices include reducing error rates on invoices and adopting a
regular schedule to follow up on collections. Effective accounts payable practices include negotiating favourable terms and
rebates with suppliers, issuing purchase orders for new orders, using available volume rebates and trade spend initiatives, and
periodically benchmarking vendor contracts against industry standards.
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3. Making it visible – cash flow reporting- To truly foster a cash management culture, I need to actively track my cash flows.
Forecasting is a critical step in cash management and ultimately improving profitability. This involves looking at both income
and cash flow statements, and linking my cash flow forecasts to key working capital metrics from the balance sheet, such as DIO
(days inventory on-hand), --------------------------------------------------------------------------------------------------------------------------
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-------------------------------. Also be sure to integrate cash flow forecasting with your P&L statement and balance sheet so you can
track performance against a range of indicators.
When times are tight, cash management can be even more important, buying time with key stakeholders, reducing the likelihood
of covenant breaches and ----------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------ of information, and consider establishing a cash
committee to oversee this process and drive change through the organization.
4. Matching funding to your cash flow obligations- Every business has both short- and long-term cash flow obligations. Short-
term requirements encompass day-to-day operational expenses. Longer-term obligations typically refer to capital project
investments and term debt maturities. To become proficient at cash flow management, companies must match their various
sources of funding to their capital flows. This can ensure that an otherwise profitable business has access to the cash it needs to
meet its ongoing obligations.
5. Visit an organization of your choice and find out the investment appraisal methods that the organization
follows. Write a note on your visit.
Investment appraisal in action (A Syngenta Company case study)

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This will be a huge task. Most of the world’s cultivable land is already used for farming. Global warming may reduce the overall
amount of arable land. To avoid widespread hunger, more food will need to be produced from the land currently being farmed. It
is not surprising then that agricultural productivity is high on the global agenda
Meeting the challenge
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Syngenta’s mission is ‘bringing plant potential to life’. It uses the latest science and technology to develop products that help its
customers improve crop productivity. ------------------------------------------------------------------------------------------------------------
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---------------------------------------------environment requires intensive research and development (R&D). To protect its
investment, Syngenta obtains patents for its new products.
One of Syngenta’s best-selling products is Amritsar. -------------------------------------------------------------------------------------------
------------------------------------------------------------------------ This case study looks at how in 2008 Syngenta proposed an
investment in new manufacturing capacity that would allow it to increase production of Amritsar. It reviews the analyses that
helped the company decide whether to proceed with this investment.
Adding value
Business is about transforming ---------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------- profit. This is when the revenue from the sale of the outputs exceeds the
cost of the inputs. Profits are used to reward shareholders and can be reinvested in the business.
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Reasons for investment
All businesses incur capital costs when buying or creating assets. These include plant, equipment, brands and knowledge.
Spending money on capital assets is called investment. Although this is not essential expenditure in the short term, it is vital for
long-term success. If a firm fails to invest then its products could become out-of-date or it may lose business to competitors that

13. can deliver goods and services more efficiently. For example, in the last 20 years, every camera manufacturer has had to
introduce new products as digital technology has replaced film as the medium for capturing images. Manufacturers that didn’t
invest in new products went out of business. There are three broad motives for capital investment:
 ----------------------------------------------------------------------------
 Acquisition of additional assets to expand the business and increase output
 ------------------------------------------------------------------------------------
In practice, an investment often combines all three factors-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------- Amistar fungicide.
Investment appraisal
In 2008 -----------------------------------------------------------------------------------------------------------------------------------------------
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----------and a worthwhile investment.
Rationalising the investment
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Making informed decisions
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14. However, to make an informed decision, ---------------------------------------------------------------------------------------------------------
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---------------------------------------------------------------------This considers the short-term issue of funding the investment and the
longer-term financial implications, in this case over a ten-year period (2008–2017). To do this, the company needed detailed
financial data to assess whether the investment would produce value for shareholders.
Projected cash flows
An investment – or capital expenditure – involves a cash outflow in the present that is expected to yield greater cash inflow to
the future. To do this, managers need to produce the best available financial estimates of the cash inflows and outflows that
would result from the investment.
Payback
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As Table 1 shows, the ------------------------------------------------------------------------------------------------------------------------------
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---------------------------is earned during Year 2, as when this is added to the £80m earned in Year 1 cumulative earnings equal
£150m. It follows that payback will be achieved in Year 2:
The payback period is thus projected at 1 year, 4.5 months or 16.5 months.

15. This is a relatively short payback period. It is a useful pointer, but does not reflect the true value of the investment. The figure
provides no information about the cash flows after payback and gives no indication of overall profitability.
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This ----------------------------------------------------------------------------------------------------------------------------
Finally this average value can be expressed as a percentage of the original investment:
Opportunity cost
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Discounted cash flows
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interest rates for the next year are estimated to be 10% on average. Then, in a year’s time an investment of £1 would be worth:
------------------------------------------------------------------------------------------------------------------------ out what any sum in the
future would be worth today. Assuming opportunity costs of 10%, a £1 in one year’s time is worth:

16. --------------------------------------------------------------
This sequence can be extended for years into the future producing factors that can be used to convert future cash flows into their
present values (PV). For example, ----------------------------------------------------------------------------------------------------------------
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Present value
The present value of all the projected cash flows can be aggregated to give the net present value (NPV) for the whole
project. In this illustrative example, ------------------------------------------------------------------------------------------------
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Conclusion
On the basis of the investment appraisal, the Grange mouth expansion project was approved. The analysis suggested
that it will --------------------------------------------------------------------------------------------------------------------------------

17. ---------------------------------------------------------------------------------------------------------------------------- is now
supplying Amritsar to new customers in expanding markets.
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Bank Details
Bank Name ICICI Bank
Account no. 628101546792
Account Type SAVING A/C
Account Holder Name DHARAMENDRA KUMAR SINGH
IFSC code & branch address IFSC Code- ICIC0006281 Branch- HAZRAT
GANJ, LUCKNOW
Note- Bank Transaction charges – No extra charge in case of Cash deposit
Bank Name STATE BANK OF INDIA
Account no. 31436792295
Account Type SAVING A/C
Account Holder Name DHARMENDRA KUMAR SINGH
IFSC code & branch address IFSC Code- SBIN0003085 Branch- TOWN
HALL, SHAHJAHANPUR (UP)
Note- Bank Transaction charges – Rs. 50/- applicable for cash deposit/ATM /Cheque payment in SBI A/C.
(Rs. 50/- extra on total amount).
DHARMENDRA KUMAR SINGH