IGNOU MCO-05 December 2021 Previous Year Question Paper

Q1.What are finan cial statements ? How far are they useful in decision -making purposes ?

Q2.Discuss the nature and limitations of financial statements. 5+5+10=20

Q3.Explain the significance of Profit -Volume Ratio, Margin of Safety and Angle of Incidence . What are the various ways to improve P/ V Ratio ? 5+5+5+5=20

Q4.What is ‘Standard Costing’ ? State the objectives of Standard Costing. Compare Standard Costing with Budgeting. 5+5+10=20

Q5.How is Cash Flow Statement different from Income Statement ? What are the additional benefits to different users of accounting information from Cash Flow Statement ?

Q6.Explain them briefly. 10+10=20

Q7.What are fixed and flexible budgets ?

Q8.Differentiate between these two. Why do accountants prepare these budgets ? 5+5+10=20

Q9.Following infor mation is derived from the financial statements of a company : Year 2017 2018 Sales (<) 30,00,000 40,00,000 Profit (<) 6,00,000 10,00,000 Calculate : 5+5+5+5=20

(a) PV Ratio

(b) Break-even Point

(c) Sales required to earn a profit of < 16,00,000

(d) Profit when Sales is < 50,00,000

Q10.Balance Sheet of a company appears as follow s for the year ending on 31st March 2017 : Balance Sheet as at 31st March 2017 Liabilities < Assets < Equity Share Capital 4,00,000 Land 2,20,000 8% Preference Share Capital 2,00,000 Building 2,40,000 Reserves 1,00,000 Plant and Machinery 3,80,000 Profit and Loss Account 50,000 Furniture 50,000 10% Debentures 4,50,000 Debtors 2,20,000 Creditors 90,000 Stock 1,30,000 Outstanding Expenses 20,000 Cash 1,40,000 Provision for Tax 30,000 Prepaid Expenses 20,000 Proposed Dividend 60,000

Q11.00,000 14,00,000 Compute : 5+5+5+5=20

(a) Debt-Equity Ratio

(b) Total Debt-Equity Ratio

(c) Proprietary Ratio

(d) Capital Gearing Ratio

Q12.A company , newly starting manufac turing operations on 1st January 2019, has made adequate arrangement for funds for fixed assets. It wants you to prepare an estimate of funds required as working capital. It is to be remembered that : MCO-05 4

(i) In the first month there will be no sale. In the s ubsequent month the sale will be 25% in cash and 75% on credit. Customer will be allowed one month credit.

(ii) Payment for purchase of raw material will be made on one month credit basis.

(iii) Wages will be paid fortnightly on the 22nd and 7th of each month.

(iv) Other expenses will be paid one month in arrears except that 5% of selling expenses are to be paid immediately on sale being effected. The estimated sales and expenses for the first six months, spread evenly over the period subject to

(i) above are as under : Sales 3,60,000 Material Consumed 1,50,000 Wages 60,000 Manufacturing Expenses 48,000 Administrative Expenses 54,000 Selling Expenses 42,000 Depreciation 50,000 The article produced is subject to ex cise duty equal to 10% of the selling price. The duty is payable on March 31, June 30, September 30 and December 31 for sales up to February 28, May 31, August 31 and November 30 respectively. Prepare C ash Budget for each of the six months indicating the requirement of working capital. 20 E_.gr.Amo.-05 dm{UÁ` ñZmVH$moÎma Cnm{Y gÌm§V narjm {Xgå~a, 2021 E_.gr.Amo.-05 : à~§YH$s` {ZU©`m| Ho$ {bE boIm§H$Z g_` : 3 KÊQ>o A{YH$V_ A§H$ : 100 (Hw$b H$m : 70%) ZmoQ> : {H$Ýht nm±M àíZm| Ho$ CÎma Xr{OE & g^r àíZm| Ho$ A§H$ g_mZ

Q14.bm^-n[a_mU AZwnmV (PV Ratio), gwajm gr_m (Margin of Safety) VWm AmnVZ H$moU (Angle of I ncidence) Ho$ _hÎd H$s ì`m»`m H$s{OE & bm^ n[a_mU AZwnmV gwYma H$aZo Ho$ {d{^Þ Cnm` Š`m h¢ ? 5+5+5+5=20

Q15.‘_mZH$ bmJV boIm§H$Z ’ go Š`m VmËn`© h¡ ? _mZH$ bmJV boIm§H$Z Ho$ CÔoí`m| H$m Cë boI H$s{OE & _mZH$ bmJV boIm§H$Z VWm ~OqQ>J H$s VwbZm H$s{OE & 5+5+10=20

Q16.amoH$‹S> àdmh {ddaU Am` {ddaU go {H$g àH$ma {^Þ h¡ ? amoH$‹S> àdmh {ddaU go boIm g§~§Yr OmZH$mar Ho$ {d{^Þ Cn`moJH$Vm©Am| H$mo àmßV hmoZo dmbo AÝ` bm^ Š`m h¢ ? CZH$s g§jon ì`m»`m H$s{OE & 10+10=20

Q20.00,000 14,00,000 {ZåZ{b{IV H$s JUZm H$s{OE : 5+5+5+5=20 (H$) G$U-B©{ŠdQ>r AZwnmV (I) Hw$b G$U-B©{ŠdQ>r AZwnmV (J) ñdm{_Ëd AZwnmV (Proprietory Ratio) (K) ny±Or {J`[a¨J AZwnmV (Capital Gearing Ratio)