Question 1. “Balance Sheet is a statement of assets and liabilities or sources and uses of funds or both”, Comment.

Question 2. “Funds flow statement is only supplementary to P/L Account and Balance Sheet, it can not substitute to P/L Account and Balance Sheet”. Do you agree to this statement? Explain your views.

Question 3. Comment on the following statement:

(a) A budget is both a plan as well as a control tool.

(b) Budget should be regarded as a master but not as a servant.

(c) Fixed budget is more useful than a flexible budget.

(d) Performance budgeting lays immediate stress in the achievement of specific goals over a period of time.

Question 4. Differentiate between the following:

(a) Standard cost and Estimated cost

(b) Fixed overhead Efficiency variance and fixed overhead calendar variance

(c) Marginal costing and Absorption Costing

(d) Marginal costing and Differential Costing

Question 5. Write short notes on the following:

(a) Make or Buy decisions

(b) Expand and Contract decisions

(c) Plant shut down decision

(d) Replacement of Machinery

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