MBAA-102: Accounting for Managers – Unit 3

MBAA-102: Accounting for Managers – Unit 3

Objectives: Explain the meaning and objectives of financial statements of a business entity; Understand the basic concepts of a Profit & Loss account; Classify income and expense items; Understand the structure and components of a balance sheet; and Understand the basic principles of assets valuation.

Materials:
The relevant material is available here.

Questions:

1. Differentiate between expenditure and an expense. Give suitable examples.
2. Explain the revenue recognition concept with the help of an example.
3. “Fixed assets are physical assets that provide operating capacity for a number of accounting periods”. Explain with the help of suitable examples. Do all fixed assets depreciate?
4. What are bad debts? What is the way to deal with the problem of expected bad debts in accounting?
5. Write short notes on the following: (i) Operating profit (ii) Earnings before interest and tax (iii) Contingent liability (iv) Retained earnings (v) Depreciation