Company Accounts and Cost and Management Accounting

CS: Executive Programme
Paper 2 : Company Accounts, Cost and Management Accounting
[One paper: Three Hours – 100 marks]

Level of Knowledge :

Working knowledge.

Objective . . .

(i)	To provide working knowledge of accounting principles and procedures for companies in accordance with the statutory requirements.
(ii)	To acquaint the students with cost and management accounting techniques and practices.

Contents . . .

Part A : Company Accounts (50 Marks)

1.	Accounting standards - relevance and significance; national and international accounting standards.
2.	Accounting for share capital transactions - issue of shares at par, at premium and at discount; forfeiture and re-issue of shares; buy-back of shares; redemption of preference shares; rights issue.
3.	Issue of debentures - accounting treatment and procedures; redemption of debentures; conversion of debentures into shares.
4.	Underwriting of issues ; acquisition of business ; profits prior to incorporation ; treatment of preliminary expenses.
5.	Preparation and presentation of final accounts of joint stock companies as per company law requirements; bonus shares.
6.	Holding and subsidiary companies – accounting treatment and disclosures; consolidation of accounts.
7.	Valuation of shares and intangible assets.

Part B : Cost And Management Accounting (50 Marks)

8.	Cost accounting – objectives of costing system; cost concepts and cost classification; management accounting – nature and scope; role of management accountant, tools and techniques of management accounting; distinction between financial accounting, cost accounting and management accounting.
9.	Elements of cost : (i) Material cost – purchase procedures, store keeping and inventory control, fixing of minimum, maximum and re-order levels, ABC analysis, pricing of receipts and issue of material and accounting thereof; accounting and control of wastage, spoilage and defectives. (ii) Labour cost – classification of labour costs, payroll procedures, monetary and non–monetary incentive schemes; labour turnover and remedial measures; treatment of idle time and overtime. (iii) Direct expenses – nature, collection and classification of direct expenses and its treatment. (iv) Overheads – nature, classification, collection, allocation, apportionment, absorption and control of overheads.
10.	Methods of costing – unit costing, contract costing.
11.	Budgetary control – preparation of various types of budgets, advantages and limitations; budgetary control reports to management.
12.	Marginal costing – application of marginal costing; cost–volumeprofit relationship; break–even analysis, preparation of break–even charts; profit – volume graph; practical application of profit volume ratio.
13.	Analysis and interpretation of financial statements – nature, objectives; latest trends in presenting financial data; importance and limitations; accounting ratios - classification, advantages and limitations.
14.	Cash flow statements – classification of cash flows, preparation and usefulness.