MANAGENT ACCOUNTING Question And Answers
- What are the types of working capital?
Answer:-
- Gross Working Capital (GWC)
- Net Working Capital (NWC) or Working Capital
- Permanent / Fixed Working Capital
- Temporary / Variable Working Capital.
- Mention five short term sources of working capital?
Answer:- Tax Provisions
Bank Overdraft
Dividend Provisions
Trade Deposits
Public Deposits
Short Term Loans
- Mention five long term sources of working capital?
Answer:- Share capital
Debentures
Retained profits
Long term loans
Depreciation
- What is net working capital?
Answer:- Net working capital is the aggregate amount of all current assets and current liabilities. It is used to measure the short-term liquidity of a business, and can also be used to obtain a general impression of the ability of company management to utilize assets in an efficient manner.
- What is operating cycle?
Answer:- The operating cycle is the average period of time required for a business to make an initial outlay of cash to produce goods, sell the goods, and receive cash from customers in exchange for the goods.
- Give the formula for finding working capital using operating cycle.
Answer:- Working capital using operating cycle= Cogs * operating cycle/ 360or 365 days + desired cash balance.
- What are the methods of estimating working capital requirements?
Answer:- Percentage of sales method, regression analysis, cash forecasting, operating cycle method, projected balance sheet method.
- Define budget.
Answer:- Budget is an estimate of income and expenditure for a set period of time.
- What is budgeting?
Answer:- Budgeting is the process of preparing detailed projections of future amounts in form of budgets.
- What is budgetary control?
Answer:- Budgetary control is a process for managers to set financial and performance goals with budgets, compare the actual results, and adjust performance, as it is needed.
