BBA

ACCOUNTING FOR MANAGERS

Course Objective: The objective of this course is two-fold. First, to familiarize students with
the fundamentals of accounting, accounting terminology and roadmap of transition of
economic transactions into financial statements. Secondly, helping students to read, analyze
and use such financial statements for decision making purposes
Learning Outcomes:
On successful completion of this course, the students should be able to:
1. Understand and apply the basic accounting concepts and principals
2. Record the basic economic transactions in accounting format along with preparation
of final accounts
3. Make meaningful interpretations about financial health of the company using
corporate financial statements
4. Have clear understanding of managerial accounting techniques like CVP analysis,
budgeting and variance analysis for decision making purposes
Unit 1: Introduction to Financial Accounting
Accounting as an Information System - Importance, Scope and Limitations
Generally Accepted Accounting Principles
Basic Accounting Concepts - Accounting Equation, Nature of Accounts
Rules of Debit and Credit
Recording Transactions in Journal
Preparation of Ledger Accounts & Trial Balance
Preparation of Final Accounts - Trading Account, Profit & Loss Account and Balance Sheet
Unit II: Corporate Annual Report
Overall structure of Annual Report of a Public Company
Chairmans Statement
Directors Report
Management Discussion and Analysis
Report on Corporate Governance
Auditors Report
Introduction to Corporate Financial Statements
Income Statement
Balance Sheet
Cash Flow Statement as per AS-3 (revised)
Understanding different types of Profit
EBIT, EBT, EAT, Operating Profit and Distributable Profit.
Unit III : Introduction to Management Accounting
Meaning & Scope of Management Accounting
Difference between Financial and Management Accounting
Techniques of Financial Statement Analysis
Horizontal and Vertical analysis
Ratios Analysis
Meaning and Importance of Ratios
Liquidity Ratios
Solvency Ratios

Profitability Ratios
Turnover Ratios
Unit IV: Understanding Cost Behaviour
Classification of costs - Fixed, Variable, Semi variable, Product and Period costs, Direct &
Indirect costs, Relevant and Irrelevant costs, Shut down cost, Controllable and Uncontrollable
costs, Sunk cost, Opportunity costs, Expired & unexpired costs, Conversion cost
Cost-Volume-Profit Analysis
Contribution
PV Ratio
Margin of Safety
Break-Even Point
Unit V: Budgeting and Variance Analysis
Budgeting
Role of budgeting
Process of budgeting
Types of Budgets: Fixed and Flexible, Zero based budgeting
Variance
Standard Costing
Variance Analysis: Material, Labour & Overhead
Pedagogy
Tutorials, Interactive sessions, Practice Exercises, Case studies, Group Projects - the course is
covered by adopting a combination of lecture methods, class presentation by groups of
students, practical exercises and self study sessions.
Examination Scheme:
Sl.
No

Evaluation
Component

Weight
(%)

Assignment

Learning
outcomes

Date of completion
of evaluation

05

1,3

2 Weeks from the

date of evaluation

Quiz

10

2,3,4

1 Week from the

date of evaluation

Class Participation

10

2,3,4

2 Weeks from the

date of evaluation

Class Test

15

1,2,3,4

2 Weeks from the

date of evaluation

End Term

60

1,2,3,4

As per Univ.
schedule

Total

100

Text & References:

Date for
Evaluation

Text:
Horngren C T, Sundem G L, Stratton W O, Burgstahler D and Schatzberg J.
Introduction to Management Accounting. PHI Learning Pvt Ltd.
Horngren C T, Sundem G L, Elliott J A and Philbrick D R., Introduction to Financial
Accounting, Pearson
References:
Horngren, C.T., Foster, G, and Datar, S.M. Cost Accounting: A Managerial Emphasis.
New Delhi: Prentice Hall of India Pvt. Ltd.
Ambrish Gupta, Financial Accounting for Managers: An Analytical Perspective,
Prentice Hall.