This PPT will help the students appearing for NET SET examination to prepare for Unit Accounting and Finance

1. 1
NET/SET Workshop
Presentation by:
Dr Jyoti Thakur

2. 2
Pattern of Test
Session Paper Marks Duration
First I
60 out of which
50 questions are
to be attempted
50x2 = 100
1¼ Hours
First II
50 questions all of
which are
compulsory
50x2 = 100
1¼ Hours
Second
75 questions all of
which are
compulsory
75x2 = 150
2½ Hours

3. 3
QUALIFYING MARKS
CATEGORY
MINIMUM QUALIFYING MARKS
PAPER - I PAPER - II PAPER-III
General 40 (40%) 40 (40%) 75 (50%)
OBC 35 (35%) 35 (35%)
67.5 (45%) rounded
off to 68
PH/VH/SC/ST 35 (35%) 35 (35%) 60 (40%)

4. 4
Paper-II & Paper-III: Subject Related
• Compulsory objective type questions of 2
marks each.
• Mark the responses for questions on the
Optical Mark Reader (OMR) sheet.
• Use Blue/ Black ball point pen only.
• Calculators/ log tables not allowed.
• Paper-III Pattern Revised from June 2012.

5. 5
Unit II: Financial & Management Accounting
• Basic Accounting Concepts, Capital & Revenue,
Financial Statements.
• Partnership Accounts: Admission, Retirement,
Death, Dissolution & Cash Distribution.
• Advanced Company Accounts: Issue, Forfeiture &
Purchase of Business, Liquidation, Valuation of
Shares, Amalgamation, Absorption &
Reconstruction, Holding Company Accounts.
Contd…………

6. 6
Unit II: Financial & Management Accounting
• Cost & Management Accounting:
Ratio Analysis, Funds Flow Analysis,
Cash Flow Analysis, Marginal Costing
& Break Even Analysis, Standard
Costing, Budgetary Control, Costing
for Decision Making, Responsibility
Accounting.

7. Accounting Concepts and Conventions
Concepts
• Business Entity Concepts
• Money Measurement
Concept
• Cost Concept
• Going Concern Concept.
• Dual Asset Concept
• Realization Concept
• Accrual Concept
• Accounting Period
• Revenue Match Concept
Conventions:
• Consistency
• Disclosure
• Conservatism
• Materiality
7

8. Capital and Revenue
Receipts:
• Capital
• Revenue
Expenditure:
• Capital
• Revenue
• Deferred Revenue Expenditure
8

9. Analysis of Financial Statements
• Comparative Analysis.
• Common size Statements.
• Trend Analysis Percentage.
9

10. Partnership Accounts
• Admission of partner
• Retirement of Partner
• Death of Partner
• Dissolution of Partnership
• Interest on Drawings.
• Guarantee of profit.
10

11. Advanced Company Accounts
• Allotment
• Calls on shares
• Forfeiture of Shares.
• Pro-rata Allotment of shares
• Issue of shares at Premium, par and Discount
• Debenture and Redemption of Debentures.
11

12. Purchase of Business
• Purchase Consideration
– Net Payment method.
– Net Asset Method
– Lump-sum method
• Amalgamation
Absorption
External Reconstruction.
Alteration of Share Capital
Consolidation of Share
Subdivision of Shares.
12

13. Financial Analysis
• Ratio Analysis:
– Liquidity ratios
– Profitability Ratios.
– Equity Fund Related Ratios
– Efficiency Ratios.
– Returns on Investment Ratios.
• Fund Flow Statements
• Cash Flow Statements
13

14. Marginal Costing and BEP
• Marginal Cost Statement
S-V= C
P/V Ratio
BEP
Margin of Safety.
14

15. Standard Costing
• Material Variances
• Labour Variances.
15

16. Budgetory Control
• Fixed Budget.
• Flexible Budget
• Master Budget
• Functional Budget.
• Cash Budget.
• Zero Based Budgeting
16

17. Responsibility Accounting
• Responsibility Centre
– Cost Centre
– Revenue Centre
– Profit Centre
– Investment Centre
• Types of Reports
Statutory Report (Section 165)
Auditors Report
Annual Report
17

18. 18
REFERENCE BOOKS:
ACCOUNTING & FINANCE
1. S. N. Inamdar/ I.M. Pandey/ Khan & Jain/ Ravi Kishore,
Financial Management
2. Prasanna Chandra, Financial Management – Theory and
Practice, Tata McGraw–Hill Publishing Company India, Delhi
3. BSE Publications on Capital Market Studies
4. MFI Publications on Capital Market Studies
5. ICAI, Accounting Standards
6. Gupta/ shukla & Grewal, Advanced Accounting
7. M. N. Arora, Cost and Management Accounting
8. Ravi Kishore, Management Accounting

19. REFERENCE BOOKS : NET
• Paper 1: Upkar/ Pragati Publication
• Paper 2: Upkar/ Pragati/ Subject
related references
• Paper 3: Upkar/ Pragati/ Subject
related references
19

20. 20

21. 21
Amount spent on advertising
campaign the benefit of which is
likely to last for 3 to 4 years is:
A. Capital expenditure
B. Revenue expenditure
C. Deferred revenue expenditure
D. Deferred capital expenditure

22. 22
Amount spent on advertising
campaign the benefit of which is
likely to last for 3 to 4 years is:
A. Capital expenditure
B. Revenue expenditure
C. Deferred revenue expenditure
D. Deferred capital expenditure

23. 23
Cash flows arising from Dividend
paid in the case of a financial
enterprise is a cash flow from:
A. Operating activities
B. Financing activities
C. Both (A) & (B)
D. Investing activities

24. 24
Cash flows arising from interest
paid in the case of a financial
enterprise is a cash flow from:
A. Operating activities
B. Financing activities
C. Both (A) & (B)
D. Investing activities

25. 25
What do you mean by “cash
equivalents”?
A. Bank balance
B. Short term highly liquid securities
C. Investments
D. Investment in Debentures

26. 26
What do you mean by “cash
equivalents”?
A. Bank balance
B. Short term highly liquid securities
C. Investments
D. Investment in Debentures

27. 27
Which of the following is an
efficiency ratio?
A. Price Earning ratio
B. Debt Equity ratio
C. Acid Test ratio
D. Average Collection period

28. 28
Which of the following is an
efficiency ratio?
A. Price Earning ratio
B. Debt Equity ratio
C. Acid Test ratio
D. Average Collection period

29. 29
True or False
1. Common size statements are used for both horizontal and
vertical analysis.
2. Unclaimed dividends are classified as current assets in
financial statements.
3. Gross working capital = Current Assets – Current
Liabilities.
4. High Bank overdraft means low working capital.
A. True, False, False, True.
B. All statements are True.
C. All statements are False.
D. False, False, True, True.

30. 30
True or False
1. Common size statements are used for both horizontal and
vertical analysis.
2. Unclaimed dividends are classified as current assets in
financial statements.
3. Gross working capital = Current Assets – Current
Liabilities.
4. High Bank overdraft means low working capital.
A. True, False, False, True.
B. All statements are True.
C. All statements are False.
D. False, False, True, True.

31. Which of the following forms an
item of Current Assets?
A. Loans Given
B. Loans Taken
C. Bank balance
D. Bank Overdraft
E. Capital
31

32. Which of the following forms an
item of Current Assets?
A. Loans Given
B. Loans Taken
C. Bank balance
D. Bank Overdraft
E. Capital
32

33. Identify the synonymous terms
for Shareholders’ Funds
A. Net Worth
B. Investment
C. Live Stock
D. Proprietary Equity
E. Preferred Capital
33

34. Identify the synonymous terms
for Shareholders’ Funds
A. Net Worth
B. Investment
C. Live Stock
D. Proprietary Equity
E. Preferred Capital
34

35. Read the following statements
(i) “Working Capital is the amount of funds necessary to
cover the cost of operating the enterprise.”
(ii) “Circulating capital means current assets of a company
that are changed in the ordinary course of business from
one form to another.”
(A) (i) and (ii) both are correct.
(B) (i) and (ii) both are false.
(C) (i) is correct, but (ii) is false.
(D) (i) is false, but (ii) is correct.
35

36. Read the following statements
(i) “Working Capital is the amount of funds necessary to
cover the cost of operating the enterprise.”
(ii) “Circulating capital means current assets of a company
that are changed in the ordinary course of business from
one form to another.”
(A) (i) and (ii) both are correct.
(B) (i) and (ii) both are false.
(C) (i) is correct, but (ii) is false.
(D) (i) is false, but (ii) is correct.
36

37. Which one of the following is correct ?
(i) A ratio is an arithmetical relationship of one number to another
number.
(ii) Liquid ratio is also known as acid test ratio.
(iii) Rule of thumb for current ratio is 2 : 1.
(iv) Debt equity ratio is the relationship between outsiders’ fund and
shareholders’ fund.
(A) All (i), (ii), (iii) and (iv) are correct.
(B) Only (i), (ii) and (iii) are correct.
(C) Only (ii), (iii) and (iv) are correct.
(D) Only (ii) and (iii) are correct.
37

38. Which one of the following is correct ?
(i) A ratio is an arithmetical relationship of one number to another
number.
(ii) Liquid ratio is also known as acid test ratio.
(iii) Rule of thumb for current ratio is 2 : 1.
(iv) Debt equity ratio is the relationship between outsiders’ fund and
shareholders’ fund.
(A) All (i), (ii), (iii) and (iv) are correct.
(B) Only (i), (ii) and (iii) are correct.
(C) Only (ii), (iii) and (iv) are correct.
(D) Only (ii) and (iii) are correct.
38

39. Which of the following term is used to
represent the proportionate relationship
between debt and equity ?
(A) Cost of Capital
(B) Capital Budgeting
(C) Assets Structure
(D) Capital Structure
39

40. Which of the following term is used to
represent the proportionate relationship
between debt and equity ?
(A) Cost of Capital
(B) Capital Budgeting
(C) Assets Structure
(D) Capital Structure
40

41. The manager is held responsible for both
Cost and Revenue is
1. Cost Centre
2. Profit Centre
3. Investment Centre
4. Revenue Centre
41

42. The manager is held responsible for both
Cost and Revenue is
1. Cost Centre
2. Profit Centre
3. Investment Centre
4. Revenue Centre
42

43. Cash Budget is:
1.An Estimates of Cash Receipts and Payments
during a given period of time.
2. Based on accrual Basis of Accounting
• A) Both 1 and 2 are correct
• B) 1 is correct and 2 is incorrect
• C) Both are false.
• D) 1 is false and 2nd
is correct
43

44. Cash Budget is:
1.An Estimates of Cash Receipts and Payments
during a given period of time.
2. Based on accrual Basis of Accounting
• A) Both 1 and 2 are correct
• B) 1 is correct and 2 is incorrect
• C) Both are false.
• D) 1 is false and 2nd
is correct
44

45. Marginal Cost Equation is
a) S= V+C
b) S= V+F
c) S= F+/-P/L
d) S= V+F+/-P/L
• A) a &b B) b & c C) a & C D) a & d
45

46. Marginal Cost Equation is
a) S= V+C
b) S= V+F
c) S= F+/-P/L
d) S= V+F+/-P/L
• A) a &b B) b & c C) a & C D) a & d
46

47. ............................... represents the assets
backing for equity shares value
• (A) Fair value
• (B) Market value
• (C) Intrinsic value
• (D) Book
47

48. Marginal Cost Equation is
a) S= V+C
b) S= V+F
c) S= F+/-P/L
d) S= V+F+/-P/L
• A) a &b B) b & c C) a & C D) a & d
48

49. ............................... represents the assets
backing for equity shares value
• (A) Fair value
• (B) Market value
• (C) Intrinsic value
• (D) Book
49

50. Practice of appending notes regarding contingent
liabilities in accounting segment is in pursuance
• A) Convention of Consistency
• B) Convention of Conservatism
• C) Convention of materialism
• D) Convention of Disclosure
50

51. Practice of appending notes regarding contingent
liabilities in accounting segment is in pursuance
• A) Convention of Consistency
• B) Convention of Conservatism
• C) Convention of materialism
• D) Convention of Disclosure
51

52. Match the following :
• List - I List - II
• (a) Matching Principle (i) Ignores future profit estimations
• (b) Materiality Principle (ii) Normal basis for valuing assets
• (c) Conservatism Principle (iii) Revenues and expenses of a particular period
• (d) Cost Principle (iv) Relates to relative size or importance of item
• or event
• Code :
• (a) (b) (c) (d)
• (A) (i) (iv) (ii) (iii)
• (B) (ii) (iii) (iv) (i)
• (C) (iii) (iv) (i) (ii)
• (D) (iv) (iii) (ii) (i)
52

53. Match the following :
• List - I List - II
• (a) Matching Principle (i) Ignores future profit estimations
• (b) Materiality Principle (ii) Normal basis for valuing assets
• (c) Conservatism Principle (iii) Revenues and expenses of a particular period
• (d) Cost Principle (iv) Relates to relative size or importance of item
• or event
• Code :
• (a) (b) (c) (d)
• (A) (i) (iv) (ii) (iii)
• (B) (ii) (iii) (iv) (i)
• (C) (iii) (iv) (i) (ii)
• (D) (iv) (iii) (ii) (i)
53

54. Which of the following is not an
Accounting concept ?
(A) Matching concept
(B) (B Dual Aspect concept
(C) True and Fair concept
(D) Going concern concept
54

55. Which of the following is not an
Accounting concept ?
(A) Matching concept
(B) (B Dual Aspect concept
(C) True and Fair concept
(D) Going concern concept
55