Important Topics of Costing and FM for May 2015 IPC Exams

Important Chapters/Topics:

Costing:

1.)Material Cost

2.)Contract Costing

3.)Marginal Costing

4.)Joint and By Products (Theory)

Financial Management:

1.)Cost of Capital

2.)Cash Flow Statement

3.)Management of Working Capital

Costing and FM Important Theory

Go Through the Important Theory Questions in Costing and FM, for CA IPCC May 2015 Exams.

Even though enough care is taken while selecting the questions, students are recommended not to put in too much reliance on these.

Costing:

1.)Discretionary Costs

2.)Conversion Cost

3.)Product Costs Vs Period Costs

4.)Bin Cards Vs Stores Ledger

5.)Allocation and Apportionment

6.)Accounting Treatment for Overtime

7.)Premium

8.)Short Notes on General Ledger Adjustment Account

9.)Advantages of CostPlus

10.)Contract

Financial Management (FM):

1.)External Commercial Borrowings

2.)Business Risk Vs Financial Risk

3.)ADR Vs GDR

4.)Role of CFO

5.)Types of Floats in the context of Cash Management

6.)Benefits of Optimum Capital Structure

7.)Ploughing Back of Profits

THE QUESTIONS ARE AS FOLLOWS WHICH ARE IMPORTANT FOR YOUR EXAMS :

COSTING

DESCRIPTIVE QUESTIONS:

1. Distinguish between spoilage and defectives in a manufacturing company. Discuss their

treatment in cost accounts and suggest a procedure for their control.

2. What is ABC analysis?

3. Explain Idle time and its treated in Cost Accounts?

4. What do you understand by Labour Turnover? How is it measured? What are its causes?

What are the remedial steps you would suggest to minimize its occurrence?

5. What do you understand by overtime premium?

6. Discuss the objectives of time keeping and time booking.

7. What is blanket overhead rate? In which situations, blanket rate is to be used and why?

8. Why is it necessary to reconcile the profits between the Cost Accounts and Financial Accounts?

9. How do you accounts for byproduct in cost accounting?

10. What is NonIntegrated Accounting System?

11. What are essential Prerequisites for Integrated System?

DISTINGUISH Questions :

12. Cost unit and Cost centre

13. Explicit costs and Implicit cost

14. Job evaluation and Merit Rating

15. Allocation and Apportionment

16. Job Costing and Batch Costing

17. Operating Costing and Operation Costing.

18. Joint Product and By Product

19. Cost reduction and Cost control.

20. Product Cost and Period Cost

21. Job Costing and Contract costing

22. Standard cost and estimated cost.

23. Absorption Costing and Marginal Costing

24. Absolute and Commercial tonne kilometers

SHORT NOTES QUESTIONS:

25. Conversion cost

26. Sunk cost

27. Differential cost

28. Opportunity cost

29. Escalation Clause.

30. Irrelevant costs

31. Retention Money

32. Split off point

33. Margin of Safety

34. Profit Centre

Most Important Theory Questions of Financial Management

(*) means question is repetitive

(**) means question is very important

Scope and Objectives of Financial management

Q1:Functions of finance manager.

Q2:(*) Discuss the functions of chief financial officer.

Q3:Interrelationship between investment, financing and dividend decisions.

Q4:(**) Explain as to how the wealth maximization objective is superior to the profit maximization objective ?

Q5:(*) Explain the limitation of profit maximization principle of the firm.

Q6:Discuss the changing scenario of Financial management in India.

Q7:Difference between Financial Management and financial accounting.

Financial Analysis & planning :

Q1:Distinguish between fund flow statement and cash flow statement.

Q2:Explain the limitations financial ratios.

Q3:Discuss any three ratios computed for investment analysis

Q4:Discuss the financial ratio for evaluating company performance on operating efficiency and liquidity position aspects.

Q5:(*) Explain the need of debtservice coverage ratio.

Q6:What is quick ratio? What does it signify?

Q7:How is return on capital employed calculated? What is its significant?

Q8:What do you mean by stock turnover ratio and gearing ratio?

Q9:(*) Diagrammatically present the DU PONT chart to calculate return on equity.

Concept of Working Capital :

[No theory question have been asked]

Cash/ Treasury management :

Q1:Write short note on Followings

(a) (*)Different kinds of float with reference to management of cash.

(b) (*)William J Baumal vs. MillerOrr cash management model

(c) (**) Function of treasury department.

(d) Concentration banking

(e) Lock Box system

Management of Receivables :

Q1:Write short note on the following :

(a) (**)Factoring

(b) Commercial paper

(c) Deep discount bond vs. Zero coupon bonds

Q2:Briefly explain the meaning and importance of crediting rating.

Q3:Explain the importance of trade credit and accrual as source of working capital.

Q4:Explain the ageing schedule in the context of monitoring of receivables.

Q5:Explain the principle of trading on equity.

Q6:Explain briefly the accounts receivable systems.

Cost of capital & Capital Structure :

Q1:(*) State assumption of Modigliani and miller approach to cost of capital

Q2:(*) Discuss the major considerations in capital structure planning

Q3:(*) What is optimum capital structure? Explain.

Q4:Discuss the dividend price approach and earning price approach to estimate cost of equity capital.

Q5:Explain the assumption of net operating income approach (NOI) theory of capital structure.

Q6:Discuss the cost of debt equity or EBITEPS indifference point while determining the capital structure of accompany.

Q7:What do you understand by weighted average cost of capital?

Q8:Explain arbitrage process under MM approach.

Q9:Explain economic value added (EVA).

Q10:Explain the principle of trading on equity.

Business Risk, Financial Risk and Leverage :

Q1:Discuss the impact of financial leverage on shareholders wealth by using return on asset (ROA) and return on equity (ROE) analytic framework.

Q2:Discuss the relationship between the financial leverage and firm’s required rate of return to equity shareholder as per Modigliani and miller proposition II.

Q3:(*) Difference between Business risk and Financial risk.

Capital Budgeting and Time Value of Money :

Q1:(*) Explain the relevance of time value of money in financial decision

Q2:Distinguish between Net present value and internal rate of return.

Q3:Discuss the need for social cost benefit analysis.

Q4:Decision tree analysis is helpful in managerial decisions. Explain with an example.

Q5:Discuss the need for social cost benefit analysis.

Q6:Define modified internal rate of return method.

Q7:Explain the multiple internal rate of return.

Q8:Explain the concept of discounted pay back period.

Q9:Explain the following terms.

(a) Desirability factor.

(b) Replacement of machine

Type of Financing :

Q1:Write notes on:

(a) (**)Venture Capital financing

(b) (**)Seed capital assistance

(c) Bridge finance.

(d) Debt Discount Bonds.

(e) Ploughing back of profits

(f) Leverage lease.

(g) Concept of closed and open ended leased

(h) Credit rating

(i) Euro issue

(j) Promoters’ contribution.

(k) Packing credit

(l) Post shipment loan

Q2:What is debt securitization? Explain the basic debt securitization process.

Q3:Discuss the feature of secured premium notes (SPN).

Q4:Discuss the advantages of preference share capital as an instrument of raising funds.

International Financing :

Q1:Write short notes on the following

(a) Euro convertible bonds

(b) American Depository receipt vs. Global Depository Receipts

(c) (*)American Depository receipts

(d) (*)Concept of Indian depository receipts

Q2:Explain briefly the features of External Commercial Borrowing (ECB).

Q3:Name the various financial instruments dealt with in the international market