Here's a clean, exam-ready revision guide for your Management Accounting – Important Questions (Part A, B & C). I've simplified each topic so you can revise quickly before exams.
✅ PART A – Short Answers (2–5 Marks)
1. Management Accounting
Use of accounting data for planning, decision-making, and control.
2. Common Size Statement
Financial statement expressed in percentages (e.g., each item as % of sales or total assets).
3. Comparative Financial Statement
Comparison of financial data for two or more periods.
4. Cash Flow Statement
Shows inflow and outflow of cash under:
Operating
Investing
Financing activities
5. Budgetary Control
System of planning and controlling through budgets.
6. Trend Analysis
Analyzing financial data over several years using percentages.
7. Profitability Ratios
Measures profit earning ability:
Gross Profit Ratio
Net Profit Ratio
Return on Capital Employed
8. Marginal Costing
Costing technique where only variable cost is considered.
9. P/V Ratio (Profit Volume Ratio)
Relationship between contribution and sales.
�
10. P/E Ratio (Price Earnings Ratio)
Market price per share / Earnings per share
11. Break-Even Point (BEP)
Point where total cost = total revenue (no profit, no loss)
�
12. Margin of Safety
Excess of actual sales over break-even sales
13. Leverage Ratio
Measures use of debt (e.g., Debt-Equity Ratio)
14. Any Two Tools of Financial Statement Analysis
Ratio Analysis
Cash Flow Analysis
15. Budget
Financial plan for a future period.
16. Capital Gearing
Relationship between fixed interest capital and equity capital.
17. Profitability Index
Measures return on investment.
18. Incremental Analysis
Decision-making based on additional cost and revenue.
19. Internal Analysis
Analysis done by management using internal data.
20. Financial Statements
Balance Sheet
Profit & Loss Account
21. Fixed Budget & Flexible Budget
Fixed: Does not change with activity level
Flexible: Changes with activity level
22. Cash from Operations
Cash generated from core business activities.
23. BEP Problem
Fixed Cost = 5,00,000
P/V Ratio = 40%
�
👉 BEP = 5,00,000 / 0.40 = ₹12,50,000
24. Margin of Safety Problem
Given:
Fixed Cost = 1,80,000
Variable Cost = 3,00,000
Sales = 2,00,000 units × ₹6 = ₹12,00,000
Contribution = Sales – Variable Cost
= 12,00,000 – 3,00,000 = 9,00,000
P/V Ratio = 9,00,000 / 12,00,000 = 75%
BEP = 1,80,000 / 0.75 = ₹2,40,000
Margin of Safety = 12,00,000 – 2,40,000 = ₹9,60,000
25. Working Capital
Current Assets – Current Liabilities
Net Working Capital = Same formula
26. Advantages & Limitations of Management Accounting
Advantages:
Helps decision-making
Improves planning
Limitations:
Based on estimates
Depends on data accuracy
✅ PART B & C – Theory (10–15 Marks)
1. Objectives / Functions
Planning
Controlling
Decision making
Coordination
2. Nature & Significance of Financial Statement Analysis
Nature:
Analytical
Comparative
Significance:
Helps investors
Helps management decisions
3. Difference: Management vs Cost Accounting
Basis
Management
Cost
Purpose
Decision-making
Cost control
Scope
Wide
Limited
4. Difference: Management vs Financial Accounting
Basis
Management
Financial
Users
Internal
External
Time
Future
Past
5. Importance of Management Accounting
Better decisions
Cost control
Performance evaluation
6. Marginal Costing – Advantages & Limitations
Advantages:
Useful for pricing
Helps in BEP analysis
Limitations:
Ignores fixed cost
Not suitable for long-term
7. Tools of Management Accounting
Ratio Analysis
Budgetary Control
Cash Flow Analysis
Standard Costing
8. Steps in Cash Flow Statement
Calculate operating cash
Add investing activities
Add financing activities
Find net increase/decrease
📌 Quick Exam Tips
Remember formulas (P/V, BEP, MOS) → very important
Practice 1–2 problems daily
Write answers in points for theory
If you want, I can convert this into: ✅ 1-page revision sheet
✅ Important 10-mark answers (full format)
✅ Model question paper with answers
Just tell me 👍