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ACCOUNTING FOR MANAGERS

COURSE CODE-CP 106
MBA I Semester

COURSE OUTLINE

Course Chairman : Dr. A.S. Khalsa

Faculty Members: Prof. Miland Patil, Prof. B. Padmapriya, Dr. Priya Dwivedi, Prof. Dharini Raje
Sisodia

Course Objective:
The Indian and the world economy have shown a remarkable economic activity in the recent
past. Almost all the sectors are showing the signs of growth. The business confidence index of
India signals the signs of growth. The growth brings the industry in to the active mode of
business and huge investments activity takes place.
Finance plays a very crucial role in the success of the business and it becomes more important
because of open financial systems and markets. The student of management should not only
understand the corporate finance but also the fundamentals of accounting discipline. It is
logical to see that the business is able to accomplish the basic objective of earning profits.
There should be some language to measure the profits of the business and that is accounting.
The broad objectives of the course are as follows:
To understand basics of accounting function of an organisation.
To acquaint with the aspects of analysis of financial statements
To learn the tools and techniques of Management accounting.
To develop a relationship between business and accounting function.
To understand the basics of financial reporting.

Course Requirements:
The course requires the active participation of the students in the class. The students
participation will be in the form projects, assignments and class presentations. The course
requires rigorous practice of the students on the practical problems based on the different
topics covered in the syllabus.


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Teaching Pedagogy:
The teaching pedagogy will cover the lecturing in moderate form. The course requires active
participation of the students in the form of discussion, group exercises and their outcome. The
learning process will include the discussion mode on the various issues related to the industry
and the accounting issues of the business organisations. The assignments mentioned in the
modules have a great significance for the understanding of the subject. The course also
requires the readings suggested in the various modules to discuss in length during the sessions.
The students are required to go through all the readings before every session.
Scheme of Evaluation:
Quiz (MCQ) : 10%
Test : 50%
Attendance : 20%
Term end exam : 20%
Text Books:
1. Management Accounting, I.M. Pandey, Vikas Publication, 3
rd
Edition (T1)
2. Accounting, NCERT Text Book (Class XI Part I and Part II ) (T2)

Reference Book:
1. Financial Management, Khan & Jain, Tata McGrawhill,5th Edition (R1)
2. Accounting for Non-Specialist,Michael Jones,Wiley-India Edition,2007 (R2)
3. Basic Accounting, RajniSofatPreetiHiro,PHI Learning (P) Ltd,2010, 2
nd
Edition (R3)
4. Introduction to Accounting, Horngren,Sundem,Stratton,BurgstahlerSchatzberg,Pearson Hall,
14
th
Edition (R4)
5. Essential of Management Accounting,AMurthy,S.Gurusamy,Tata McGraw Hill (R5)

Module One
Title Financial Accounting
Contents Meaning, Need, Accounting concepts and conventions, Concept & Process of Accounting,
Journal, Ledger, Trial Balance and Financial/ Annual Accounts. Corporate Annual Accounts.
Text Chapter No. 1, 2, 3, 4 & 5. (T2), Chapter No. 2 (T1)
Reference Chapter No. 2,3,4,5,6,12 (R2)
Class
Activity
Know Your Business - Shear Beauty Parlour. Students will be divided into groups of five each
and they will be ask to identify the items given under various heads of accounts
Case Case One Title: Generally Accepted Accounting Principles-Class Room Discussion only.
Case Two Title: Mehta Automobiles- Class Room Discussion only
Practical
Problems
5 Problems
Test 1 A comprehensive test on all the aspects related to the module

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Readings
1. Filling the goodwill GAAP, Business Line, May 19, 2013
(Objective: This article brings to centre stage the initial accounting of goodwill and its
subsequent measurement, requiring closer evaluation by management, accountants
and investors. This assumes importance because mergers and acquisitions have
increased in size, number and span across industries and jurisdictions, with
incorporations recording large goodwill balances in financial statements.)
2. India Inc. needs a LokpalTooBusiness& Economy 2011
(Objective: The article throws light on the Common forms of financial statement
manipulation and the major factors leading to the rise to frauds being - diminishing
ethical values and failure of line managers.)
3. Indian Accounting Standards A Perspective
(Objective: The reading discusses on Present status of Accounting Standards in India in
harmonisation with the International Accounting Standards .It emphasises the need for
International Harmonisation of Accounting Standards)
4. A case for historical cost, Robert N. Anthony, HBR
(Objective: The objective is to analyze whether the present inflationary economy should
require the Historical cost accounting to replaced by Replacement cost/Price level adjusted
accounting.)
Web
Resources
1. http://www.austincc.edu/accting/toolbox/documents/Steps%20to%20Accounting%20Cycle%20t
ranscript.pdf.http://www.bdoindia.co.in/images/ifrs/Key%20differences.pdf.
2. http://smallbusiness.chron.com/responsibilities-financial-accountant-10080.html
3. http://www.icfre.org/UserFiles/File/Accounting_Manual.pdf.
4. http://www.mca.gov.in/Ministry/accounting_standards.html
No. of
Sessions
21 (19-Lectures + 1-Test + 1 Class activity)

Module Two
Title Financial Analysis
Contents Comparative Income Statement and Balance Sheet, Common Size Statements, Ratio
Analysis, Funds Flow Statement and Cash Flow Statement
Text Chapter No. 3 & 4 (T1)
References Chapter No. 5 & 6 (R1) Chapter No. 8 (R2)
Quiz-1 One Comprehensive Quiz covering 1&2 Modules
Video 4 Min Video on Cash Flow-Animated video which describe the flow of cash in business
its main objective is to make topic more easy to understand
Case Case Title: Colgate Palmolive Company Analyzing an Annual Report-Class Room
Discussion only
Practical
Problems
11 Problems
Readings 1. Financial Analysis of Finance Companies in Pokhara: A Comparative Study of
Pokhara Finance Ltd. and Annapurna Finance Company Ltd.-Krishna Prasad
Upadhyay/The Journal of Nepalese Business Studies Vol. I No. 1 Dec. 2004
(Objective: The objective is to emphasise the importance of Information and
results obtained from financial analysis to stakeholders and how comparitive

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analyses of the financial performance is done by taking ` example of Pokhara
Finance Company and Annapurna Finance Company)
2. Financial Analysis of the World Top IT Companies-Cristina
Romanciouc,OvidiuVeres/Journal of Applied Computer Science & Mathematics,
no.7 Special Issue
(Objective: The Objective here is to look into how the worlds largest companies in
IT have analyzed their financial statements using few financial methods
(comparative statements, ratio analysis, cash flow analysis)
3. Financial Ratios: Use, Predictive Power and the Z-Score-By Robert Rufus MBA,
CPA, CVA/Feature Article

(Objective: The purpose of this article is to discuss the use and predictive power of
financial ratios. This article also serves to revive Altmans Discriminate Function
Z, informally known as the Z-score, as a viable current day valuation tool. Finally,
this article evaluate the Effectiveness of financial ratios through Z score.)
4. Financial Statement Analysis : A look at the Balance Sheet -John
Bajkowski/January 1999 AAII Journal
(Objective: This fundamental article is the first in a series on financial
statementshow to read them and use them for security analysis. The goal is
certainly to,Their broaden the knowledge so that they can make more informed
investment decisions)
5. Financial Statement Analysis : A look at the Income Sheet -John
Bajkowski/January 1999 AAII Journal
(Objective The key objective is to emphasis the income statement that provides
insights on how well management can translate sales revenues into earnings. There
are many management judgments, estimates, and choice of accounting methods that
affect the bottom line, so it is important to be aware and alert to these issues when
judging the quality of the firms earnings.)
Web Resources 1. http://www.brighthub.com/office/finance/articles/80609.aspx
2. http://www.investopedia.com/articles/basics/06/financialreporting.asp
3. http://www.coveringcredit.com/business_credit_articles/Credit_Risk_Analysis/art
300.shtml
4. http://kwhs.wharton.upenn.edu/2012/03/financial-ratios-evaluating-a-companys-
health-and-worth/
5. http://seekingalpha.com/article/34746-common-size-analysis-of-total-sa-s-
financial-statements
No. of Sessions 22(21 Lectures+1-Quiz)

Module Three
Title Depreciation Accounting
Contents Depreciation Concept, Methods of Depreciation
Text Chapter No. 10.7(T2-Part II)
Reference Ch.No.- 14(R3)
Class Activity Accountancy Basketball Game- Students will be divided into groups of five each. The game

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comprises of various fundamental questions of accounting as the student answers a
particular question they will get a chance to play the basketball otherwise the question will
pass on to the next group.
Practical
Problems
3 Problems
Test 2 A test on module 2 & 3
Readings 1. Poor depreciation techniques can distort accounts-Michael
Blackstaff/Chartered Institution for IT
(Objective: The article emphases that though Depreciation may be a simple
concept, but inappropriate methods, and overestimation of asset life, can
seriously distort both profit and loss accounts and budgets.)
2. Depreciation - A source of fund or not -CA club India
(Objective: The objective is to analyse whether depreciation is a source of
fund or not. )
Web Resources 1. http://www.investopedia.com/articles/06/depreciation.asp
2. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/A-Brief-
Overview-of-Depreciation
3. http://www.caclubindia.com/articles/deferred-tax-asset-on-depreciation-loss-a-
moot-6951.asp
No. of Sessions 7 (5-Lectures + 1-Test + 1 Class Activity)

Module Four
Title Management Accounting
Contents Concept, Need and Importance of Management Accounting, Budgeting Flexible, Cash,
Sales, Purchase, Production and Zero Based Budgeting.
Text Chapter No. - 1, 7 & 11 (T1), Chapter No. 11 (T2)
References Chapter No. 15,17(R2) Ch.No.7(Part 2)(R4)Ch.No. 6 (R5)
Practical
Problems
3 Problems
Quiz-2 One Comprehensive Quiz covering 3
rd
& 4
th
Modules
Readings 1. Corporate Budgeting is Broken Lets Fix It: Michael C. Jensen, Harvard Business
Review, November 2001, pp. 95-101
(Objective: The reading explains the problems created in a company due to Budget
Target linked compensation plans of employee and suggests a Linear Compensation Plan
as a solution for the same. This will help students in understanding how in practical
business situations budget targets can compel employees to resort to unethical behaviour
and what is the solution to the same.)
2. Budget Choice: Planning vs Control, Neil C. Churchill, Harvard Business Review, July
1984
(Objective: After going through the theory of types of budgets and practically
understanding how they are made in the classroom this reading will help students in
understanding how different budgets can be used as a planning and controlling tool with
the help of real life simple to understand examples)
3. Top Managements Role in ZBB, Khandelwal NM, The Chartered Accountant, December
2003, pp 671-676
(Objective: The reading will help students in understanding the Top Managements Role
in ZBB in the Indian context with the help of small cases/examples.)
Web Resources 1. http://www.accountingformanagement.com/budgeting_and_planning.htm

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2. http://www.policyproposalsforindia.com/article.php?article_id=109&languageid=1
3. http://www.icai.org/post.html?post_id=5837
No. of Sessions 5 five (4-Lecture+1-Quiz)

Module Five
Title Cost Accounting
Contents CCost Accounting- Records and Processes, Types of Cost, Cost Sheet, Basic Concepts of:
Standard Costing and Variance Analysis
Text Cchapter No. - 9 & 10 (T1)
References Cchapter No.-16,18(R2)
Practical Problems 3 Problems
Test BBased on Readings of Module1,2,3,4 & 5
Readings 1. Applicability of Cost Accounting Records and Compliance Certificate,CMAArif
Farooqui,30th August 2012,article,CA Club India
(Objective: The objective of the reading is to give the students the basic
understanding about the applicability aspect of cost accounting.)
2. Management Accounting Performance
Evaluation,FalconerMitchell,FinancialManagement, October 2005.
(Objective: The main objective is to give an insight how to analyze the various
elements that are responsible for cost variances.)
Web
Resources
http://www.cimaglobal.com/.../cid_tg_standard_costing_and_variance_analys
is
http://www.accountingformanagement.com/standard_costing_variance_anal
ysis.htm
http://www.futureaccountant.com/standard-costing-variance-analysis/
No. of Sessions 6 Six ( 5 lectures + 1 test)