cost accounting & financial management - 1
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FOR NOVEMBER 2012 EXAMS Find me on / bhavin.pathak
COST ACCOUNTING & FINANCIAL MANAGEMENT Recommendation, Tips and Techniques Analyse by: Bhavin Pathak and IPCC Student Club Team
TIPS FOR PRACTICAL SUBJECTS [Page – 1]
COST ACCOUNTING [Page – 3]
Financial Management [Page – 5]
Purpose: Reducing confusion arise at the last time of examination Based on past trends and analysis of suggested answers provided by ICAI Ratings for preference IPCC Student Club TeamSuggest your views Find us on Facebook: www.facebook.com/IPCC.CLUB
Nov. 12
IPCC: TIPS AND IMPORTANT AREAS FOR LAST MINUTE PREPARATION
TIPS FOR PRACTICAL SUBJECTS Friends, Many of us know that Practical subject such as Costing and Financial Management, will play a major role in all our Professional exams and also these are the subjects which is very time consuming. Here are some of my high time tips to deal with the Practical subjects. Hope These Tips are useful not only for IPCC or PCC but for Final Students also. [Note: On the basis of past examination trends and analysis I derive following particulars which are kept in mind while preparing for Cost Accounting and Financial Statement. Mind well, it is recommendation not authentication.] Role of theory in practical subjects: Friends in Every Practical Subject there will be a theory also. It is Better to crack the theory first to get more marks in exams. For Example Costing and F.M has nearly 32 marks theory. First get a grip on theory. Also there will be only limited theory in Practical Subjects, you can do ABC analysis and go through that. Writing speed should be high: Friends, in examinations time will be very constraint, so to cope up with time you have to practice number of practical problems. Instead of Practicing the same type of practice different problems. Use highlighter while preparation: It is not possible to cover all the problems in Accounts or costing before the Exam within that one day gap. So, while preparations itself use highlighter where a new provision applies to that particular problems. So, Before the exam you need not to do all the problems just by going to that tricky area you can crack the problem easily. Give assumption notes: Give the assumption notes at the end of your answer when you assumed anything in the solving the problem. It should be clear. Try to attempt 100% question paper: Friends in the examination, always try to attend 100 marks but don‟t lose heartif you unable to attend 100 marks. Attempting of 90 to 100 is also good. Never attend the question of 16 marks first: My suggestion to you friends, please never attend the 16 mark or big question at starting itself as the same will be very tricky and time consuming too. Physiologically, our mind took some time to get into the subject while we have done all the chapter and solving some particular question Never attend the question of 16 marks first: My suggestion to you friends, please never attend the 16 mark or big question at starting itself as the same will be very tricky and time consuming too. Physiologically, our mind took some time to get into the subject while we have done all the chapters and solving some particular question. Importance of working notes: Our answer to the examiner should be user/reader friendly. Please give workings wherever it is applicable. Otherwise examiner will not know that you did the problem by yourself or copied from someone. Solve the problem step by step: Friends try to solve the Problem Step By Step. In Our Exams each step carries specified marks. You need not to worry even if your final answer is wrong, you will get the marks
Analyse by: Bhavin Pathak IPCC Student Club Team
1
RECOMMENDATIONS, TIPS AND TECHNIQUES
on steps basis. Attempt the whole question step-by-step, don‟t worry about answer. If answer is wrong, you have shown the knowledge you have to the examiner and that‟s only important. Otherwise, the given some will not come same-to-same in our practical life. So showing your knowledge is important rather than worrying about answer. Importance of Revision Test Papers (RTPs): Please go through the RTPs prescribed for your attempt. Sometimes the questions will straight away come from RTPs. Time management: 10 marks for 15 minutes In the examination time management plays a major role, spend maximum of 15 minutes for 10 marks. Don‟t worry if you not able to setup this ratio in one problem, try to speed up in the next problem. On an Average try to give run rate 15 minutes for every 10 marks. Use ABC Analysis while preparation While preparation do your chapter wise ABC analysis. Give more importance to “A” category chapters and give less importance to “C” Category Chapters. I am not saying that “leave the „C‟ category chapters”. I am just saying give less importance when compare to „A‟ Chapters. Refer Scanners for ABC analysis. In this book it is clearly stated the importance of chapters on the basis of last attempts.
Analyse by: Bhavin Pathak IPCC Student Club Team
1.2
IPCC: TIPS AND IMPORTANT AREAS FOR LAST MINUTE PREPARATION
COST ACCOUNTING Theory Sr. No.
Chapter
Recommended theory questions
Expected marking criteria Total: 16 marks (8 marks compulsory)
Rating
Difference between Cost Reduction and Cost Control Steps or process: Installation of cost accounting system Essentials of good cost accounting system Difference between cost unit and cost control Definitions: Imputed cost, implicit cost and explicit cost Difference between Bills of materials and Material Requisition Note Difference between Bin cards and Stores ledger Short note: Explain ABC analysis Treatment of Spoilage and Defectives in cost accounting Short note: Labour turnover, Costs related to labour turnover Advantages of integral accounting system Short note: Equivalent Production Units Treatment of by-products in cost accounting Advantages and criticism of Standard Costing Difference between Marginal Costing and Absorption Costing Short note: Flexible budget Super tip: Prefer Practice Manual’s chapter summary portion for theory for time saving and easy understanding. Study Material can be refer for in-depth concept clarity. Refer Suggested Answers (previous year’s asked examination question) for understanding the writing pattern provided by ICAI for model answers. Basics of cost accounting and other chapters
Analyse by: Bhavin Pathak IPCC Student Club Team
3
RECOMMENDATIONS, TIPS AND TECHNIQUES
Practical Sr. No.
Chapter
1
Material Costing
2
Labour Costing
3
Overheads
4
Integral and Non-integral Accounting Contract Costing
Recommended illustrations from ICAI’s Study Material Practical Chapters 7, 17, 18
Important Area to be cover first
EOQ ROL Min. Level Max. Level Hasley and Rowan plan Emerson‟s plan Taylor‟s plan Secondary distribution
Expected marking criteria
Ratings
5 marks
5, 20, 22, 24, 26
5 marks OR 8 marks
6, 7, 18
5 marks OR 8 marks 8 marks
Reconciliation
17
Questions with 8, 13 8 marks escalation clause Process 6 Equivalent unit 7, 14 8 marks Costing Combined (With Joint question with product and Joint and ByBy-product) Product Std. Costing 7 Fixed and 7, 8 8 marks variable overheads Marginal 8 P/V Ratio 2, 14, 18 5 marks Costing BEP Desired Sales Budget 9 Flexible and 8 5 marks production budget Super tip: I highly recommended, read or understand all the questions given in ICAI’s Study Material for concept clarity, above questions should be done before exams for revision purpose. Revision Test Papers (RTPs) is also important for examination point of view. and read chapters carefully from ICAI’s Practice Manual’s Chapter Summary given at starting of each chapter 5
Mind well Super Techniques: If you are new for Cost Accounting, firstly revise the basic chapter of cost i.e. What is cost/cost per unit/cost centre/cost statement etc.? Not only just go through this but try to understand the concept. Above recommendations are based on trend and analysis of past examination papers so it should be done in proper way. Cost is not a technical subject at IPCC level, you can easily crack in fact it is one of the scoring paper. Prepare notes for every chapter...what you have learn from that chapter. Write it in your own language. Writing is really a good technique to break the phobia. More you write, more you solve. It‟s easier to get the command on that. Don‟t just read to pass, make sure you can justify yourself with that.
Analyse by: Bhavin Pathak IPCC Student Club Team
1.4
IPCC: TIPS AND IMPORTANT AREAS FOR LAST MINUTE PREPARATION
FINANCIAL MANAGEMENT Theory Sr. No.
Chapter Intro. To financial management and Sources of financial management
Recommended theory questions
How wealth maximisation is better than profit maximization? Short note: Role of CFO Importance of Financial Management Difference between Operating Leverage and Financial Leverage Short note: Theory of NOI approach, Modigilani Approach Difference between Business risk and Financial risk Short note: Venture capital financing Definitions: Debt securitisation, Seed capital assistance, Deep discount bonds, GDR, IDR Difference between NPV and IRR Difference between Over capitalization and Under capitalization Short note: Financial breakeven and Indifference analysis Functions of treasury management Different kinds of float with reference to cash management
Expected marking criteria Total: 16 marks (8 marks compulsory)
Rating
Practical Sr. No. 1
2
Chapter
Financial planning and analysis
Financing decisions
3 4
Investment decisions Working capital management
Recommended illustrations from ICAI’s Study Material Practical Chapters Cash flow 5 statement (Q. 5 from Fund flow RTPs) statement Unit 1: 14, 16 Weighted Unit 2: 6 Average Cost of Capital Leverage Valuation of company NPV 5, 16, 18, 19 Payback Unit 1: 2, 4, 9, Working capital requirement 12 Unit 2: 3, 9 Debt Unit 3: 6, 7 management
Important Area to be cover first
Analyse by: Bhavin Pathak IPCC Student Club Team
5
Expected marking criteria 8 marks OR 16 marks
Ratings
5 marks OR 8 marks
8 marks
5 marks And 8 marks
RECOMMENDATIONS, TIPS AND TECHNIQUES
Analyse by: Bhavin Pathak IPCC Student Club Team
1.6
FOR NOVEMBER 2012 EXAMS Find me on / bhavin.pathak
COST ACCOUNTING & FINANCIAL MANAGEMENT Recommendation, Tips and Techniques Analyse by: Bhavin Pathak and IPCC Student Club Team
TIPS FOR PRACTICAL SUBJECTS [Page – 1]
COST ACCOUNTING [Page – 3]
Financial Management [Page – 5]
Purpose: Reducing confusion arise at the last time of examination Based on past trends and analysis of suggested answers provided by ICAI Ratings for preference IPCC Student Club TeamSuggest your views Find us on Facebook: www.facebook.com/IPCC.CLUB
Nov. 12
IPCC: TIPS AND IMPORTANT AREAS FOR LAST MINUTE PREPARATION
TIPS FOR PRACTICAL SUBJECTS Friends, Many of us know that Practical subject such as Costing and Financial Management, will play a major role in all our Professional exams and also these are the subjects which is very time consuming. Here are some of my high time tips to deal with the Practical subjects. Hope These Tips are useful not only for IPCC or PCC but for Final Students also. [Note: On the basis of past examination trends and analysis I derive following particulars which are kept in mind while preparing for Cost Accounting and Financial Statement. Mind well, it is recommendation not authentication.] Role of theory in practical subjects: Friends in Every Practical Subject there will be a theory also. It is Better to crack the theory first to get more marks in exams. For Example Costing and F.M has nearly 32 marks theory. First get a grip on theory. Also there will be only limited theory in Practical Subjects, you can do ABC analysis and go through that. Writing speed should be high: Friends, in examinations time will be very constraint, so to cope up with time you have to practice number of practical problems. Instead of Practicing the same type of practice different problems. Use highlighter while preparation: It is not possible to cover all the problems in Accounts or costing before the Exam within that one day gap. So, while preparations itself use highlighter where a new provision applies to that particular problems. So, Before the exam you need not to do all the problems just by going to that tricky area you can crack the problem easily. Give assumption notes: Give the assumption notes at the end of your answer when you assumed anything in the solving the problem. It should be clear. Try to attempt 100% question paper: Friends in the examination, always try to attend 100 marks but don‟t lose heartif you unable to attend 100 marks. Attempting of 90 to 100 is also good. Never attend the question of 16 marks first: My suggestion to you friends, please never attend the 16 mark or big question at starting itself as the same will be very tricky and time consuming too. Physiologically, our mind took some time to get into the subject while we have done all the chapter and solving some particular question Never attend the question of 16 marks first: My suggestion to you friends, please never attend the 16 mark or big question at starting itself as the same will be very tricky and time consuming too. Physiologically, our mind took some time to get into the subject while we have done all the chapters and solving some particular question. Importance of working notes: Our answer to the examiner should be user/reader friendly. Please give workings wherever it is applicable. Otherwise examiner will not know that you did the problem by yourself or copied from someone. Solve the problem step by step: Friends try to solve the Problem Step By Step. In Our Exams each step carries specified marks. You need not to worry even if your final answer is wrong, you will get the marks
Analyse by: Bhavin Pathak IPCC Student Club Team
1
RECOMMENDATIONS, TIPS AND TECHNIQUES
on steps basis. Attempt the whole question step-by-step, don‟t worry about answer. If answer is wrong, you have shown the knowledge you have to the examiner and that‟s only important. Otherwise, the given some will not come same-to-same in our practical life. So showing your knowledge is important rather than worrying about answer. Importance of Revision Test Papers (RTPs): Please go through the RTPs prescribed for your attempt. Sometimes the questions will straight away come from RTPs. Time management: 10 marks for 15 minutes In the examination time management plays a major role, spend maximum of 15 minutes for 10 marks. Don‟t worry if you not able to setup this ratio in one problem, try to speed up in the next problem. On an Average try to give run rate 15 minutes for every 10 marks. Use ABC Analysis while preparation While preparation do your chapter wise ABC analysis. Give more importance to “A” category chapters and give less importance to “C” Category Chapters. I am not saying that “leave the „C‟ category chapters”. I am just saying give less importance when compare to „A‟ Chapters. Refer Scanners for ABC analysis. In this book it is clearly stated the importance of chapters on the basis of last attempts.
Analyse by: Bhavin Pathak IPCC Student Club Team
1.2
IPCC: TIPS AND IMPORTANT AREAS FOR LAST MINUTE PREPARATION
COST ACCOUNTING Theory Sr. No.
Chapter
Recommended theory questions
Expected marking criteria Total: 16 marks (8 marks compulsory)
Rating
Difference between Cost Reduction and Cost Control Steps or process: Installation of cost accounting system Essentials of good cost accounting system Difference between cost unit and cost control Definitions: Imputed cost, implicit cost and explicit cost Difference between Bills of materials and Material Requisition Note Difference between Bin cards and Stores ledger Short note: Explain ABC analysis Treatment of Spoilage and Defectives in cost accounting Short note: Labour turnover, Costs related to labour turnover Advantages of integral accounting system Short note: Equivalent Production Units Treatment of by-products in cost accounting Advantages and criticism of Standard Costing Difference between Marginal Costing and Absorption Costing Short note: Flexible budget Super tip: Prefer Practice Manual’s chapter summary portion for theory for time saving and easy understanding. Study Material can be refer for in-depth concept clarity. Refer Suggested Answers (previous year’s asked examination question) for understanding the writing pattern provided by ICAI for model answers. Basics of cost accounting and other chapters
Analyse by: Bhavin Pathak IPCC Student Club Team
3
RECOMMENDATIONS, TIPS AND TECHNIQUES
Practical Sr. No.
Chapter
1
Material Costing
2
Labour Costing
3
Overheads
4
Integral and Non-integral Accounting Contract Costing
Recommended illustrations from ICAI’s Study Material Practical Chapters 7, 17, 18
Important Area to be cover first
EOQ ROL Min. Level Max. Level Hasley and Rowan plan Emerson‟s plan Taylor‟s plan Secondary distribution
Expected marking criteria
Ratings
5 marks
5, 20, 22, 24, 26
5 marks OR 8 marks
6, 7, 18
5 marks OR 8 marks 8 marks
Reconciliation
17
Questions with 8, 13 8 marks escalation clause Process 6 Equivalent unit 7, 14 8 marks Costing Combined (With Joint question with product and Joint and ByBy-product) Product Std. Costing 7 Fixed and 7, 8 8 marks variable overheads Marginal 8 P/V Ratio 2, 14, 18 5 marks Costing BEP Desired Sales Budget 9 Flexible and 8 5 marks production budget Super tip: I highly recommended, read or understand all the questions given in ICAI’s Study Material for concept clarity, above questions should be done before exams for revision purpose. Revision Test Papers (RTPs) is also important for examination point of view. and read chapters carefully from ICAI’s Practice Manual’s Chapter Summary given at starting of each chapter 5
Mind well Super Techniques: If you are new for Cost Accounting, firstly revise the basic chapter of cost i.e. What is cost/cost per unit/cost centre/cost statement etc.? Not only just go through this but try to understand the concept. Above recommendations are based on trend and analysis of past examination papers so it should be done in proper way. Cost is not a technical subject at IPCC level, you can easily crack in fact it is one of the scoring paper. Prepare notes for every chapter...what you have learn from that chapter. Write it in your own language. Writing is really a good technique to break the phobia. More you write, more you solve. It‟s easier to get the command on that. Don‟t just read to pass, make sure you can justify yourself with that.
Analyse by: Bhavin Pathak IPCC Student Club Team
1.4
IPCC: TIPS AND IMPORTANT AREAS FOR LAST MINUTE PREPARATION
FINANCIAL MANAGEMENT Theory Sr. No.
Chapter Intro. To financial management and Sources of financial management
Recommended theory questions
How wealth maximisation is better than profit maximization? Short note: Role of CFO Importance of Financial Management Difference between Operating Leverage and Financial Leverage Short note: Theory of NOI approach, Modigilani Approach Difference between Business risk and Financial risk Short note: Venture capital financing Definitions: Debt securitisation, Seed capital assistance, Deep discount bonds, GDR, IDR Difference between NPV and IRR Difference between Over capitalization and Under capitalization Short note: Financial breakeven and Indifference analysis Functions of treasury management Different kinds of float with reference to cash management
Expected marking criteria Total: 16 marks (8 marks compulsory)
Rating
Practical Sr. No. 1
2
Chapter
Financial planning and analysis
Financing decisions
3 4
Investment decisions Working capital management
Recommended illustrations from ICAI’s Study Material Practical Chapters Cash flow 5 statement (Q. 5 from Fund flow RTPs) statement Unit 1: 14, 16 Weighted Unit 2: 6 Average Cost of Capital Leverage Valuation of company NPV 5, 16, 18, 19 Payback Unit 1: 2, 4, 9, Working capital requirement 12 Unit 2: 3, 9 Debt Unit 3: 6, 7 management
Important Area to be cover first
Analyse by: Bhavin Pathak IPCC Student Club Team
5
Expected marking criteria 8 marks OR 16 marks
Ratings
5 marks OR 8 marks
8 marks
5 marks And 8 marks
RECOMMENDATIONS, TIPS AND TECHNIQUES
Analyse by: Bhavin Pathak IPCC Student Club Team
1.6
