Page 251 - DMGT202_COST_AND_MANAGEMENT_ACCOUNTING

Cost and Management Accounting

Notes 11. Unlike the balance sheet and the income statement, the cash flow statement is not based on

accruals accounting, why?
12. For each of the following items, indicate which part (out of Operating, Investing, Financing
and Supplemental) will be affected and why.

(a) Depreciation Expense
(b) Proceeds from the sale of equipment used in the business.
(c) The Loss on the Sale of Equipment
(d) Declaration and payment of dividends on company’s stock

(e) Gain on the Sale of Automobile formerly used in the business.
Answers: Self Assessment

1. historical records 2. cash resources
3. cash at bank 4. operating
5. Investing 6. fi nancing
7. non-cash transactions 8. extra-ordinary item
9. (c) 10. (b)

11. (a) 12. (c)
13. (d) 14. (b)
15. (b) 16. (a)
17. (d)

13.7 Further Readings

Books B.M. Lall Nigam and I.C. Jain, Cost Accounting, Prentice-Hall of India (P) Ltd.
Hilton, Maher and Selto, Cost Management, 2nd Edition, Tata McGraw-Hill
Publishing Company Ltd.

M. N. Arora, Cost and Management Accounting, 8th Edition, Vikas Publishing
House (P) Ltd.
M. P. Pandikumar, Management Accounting, Excel Books.

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