What is the major revenue recognition criterion

1
Cost And Management Accounting
2

• Cost And Management Accounting
•  
• Q1.Management accounting is a mid-way between
  financial and cost accounting. Elucidate.
•  
• Q2.What is the major revenue recognition
  criterion?
•  
• Q3.What is a trading account? What are its major
  constituents? What is its major outcome?
•  
• Q4.The cash flow statement is as useful to
  shareholders and lenders as to management.
  Explain.

3

• Q5.(a) All future costs are relevant. Do you
  agree? Why?
• (b) Fixed costs are really variable. The
  more you produce the less they become. Do
  you agree? Explain.
• Q6.In connection with inventory ordering and
  control, certain terms are basic. Explain the
  meaning of each of the following
• Economic order quantity
• Re-order point
• Lead time
• Safety stock

4

• Q7.What is meant by under/over-absorption of
  factory overheads? How will you account for them
  in cost accounts? Does it bear any impact while
  submitting quotations?
•  
• Q8.A manufacturing company operating a system of
  budgetary control finds that their production
  capacity during the year varies between 75 per
  cent and 90 per cent as against the budgeted
  capacity of 80 per cent for the year. It has been
  suggested that a system budgets should be
  introduced to effectively control costs. Outline
  the steps you would take to implement this
  suggestion keeping in mind that the management
  would still require periodic comparison with
  their overall budget during the year.
• Q9.Transfer prices must always be equal to
  externally determined market of comparative
  products or services. Comment fully.

5

• Q10.Suppose a firm is considering replacing an
  old machine with a new one. The firm does not
  anticipate that any new revenues will be created
  by the replacement since demand for the product
  generation by both the machines is the same.
  However, in the CFAT work sheet used in
  evaluating the proposal, the analyst shows
  positive CFBT in the operating cash flow section.
  What creates operating CFBT in this situation?

6

• Global Study Solutions
• Dr. Aravind Banakar
• aravind.banakar_at_gmail.com
• www.mbacasestudyanswers.com
• 9901366442 9902787224