MBA FINANCE

Answers of Accounting Objective Questions

noreply@blogger.com (Vinod Kumar) — Sat, 30 Apr 2011 13:23:00 +0000

1. (c)

2. (b)

3. (c)

4. (a)

5. (a)

6. (b)

7. (c)

8. (a)

9. (c)

10. (a)

<< Return to Accounting Objective Questions

Master of Business Administration - Introduction

noreply@blogger.com (Vinod Kumar) — Tue, 20 Oct 2009 14:35:00 +0000

Master of business administration is the best degree in the field of management and finance . Large number of students get this degree from all over the world . The MBA starts first in USA after new revolution in the field of management and companies understood the need of scientific management .
Master of business administration degree in India is also famous . More than 1600 business schools have established in 2009 . Indian institute of management is the one of largest and oldest institute which is providing the education to MBA scholars . Now admission in IIM for doing MBA is fully CAT ( Common Entrance Test ) basis and anybody who qualify it can do MBA from IIM .

Why do you want to pursue a MBA?"

noreply@blogger.com (Vinod Kumar) — Tue, 18 Aug 2009 11:58:00 +0000

Large scale of students get admission in MBA and it has become craze to do MBA . At this stage , it is logical question Why do you want to pursue MBA ?

From Some time , I have done deep analysis of this question and today , I am ready to answer of this question . Pursue means " set your target " MBA is professional degree to do managerial work in any business organisation . After 1990 , It become vital degree for getting high standard job . So , MBA is best for any student steam . These days , if you are engineer , your are doctor , you are accountant or finance consultant and after this you have MBA degree holder , then your value must increase .

So, young people are giving preference to MBA degree but it is very low trend to open self independent profession after MBA . I think , every student sets their mind to do job and only to do job after MBA . That is wrong . Now MBA finance will help you to open your self independent professional office of finance consultant like CA . There are also other reasons for pursuing MBA which can be mention with following way :-

Enhance management knowledge
Increase communication skill
Increase the skill for trouble shooting every business problem
Getting the skill to utilize the knowledge in practical field

High need of MBA finance in Rural management

noreply@blogger.com (Vinod Kumar) — Thu, 16 Jul 2009 11:39:00 +0000

Govt. of India has announced 39000 crores expenses on Rural development under Village employment guarantee scheme . It means large or high number of MBA finance are needed in future for rural development . MBA finance can take challenge to manage rural area by effective utilization of financial resources of Govt. of India.

How can do MBA finance

MBA finance can be done from any recognised university of India by giving the entrance test of CAT or MAT . After entrance test , candidate have to clear also group discussion and interview .

Why take admission of MBA finance in session 2009

Because in next 3 to 4 years , In India , the demand of MBA finance will increase in different govt. projects like , BHARAT NIRMAN , INDRA VIKAS , GRAMIN SARAK YOJNA etc. More over its annual salary package is more than Rs. 8 Lakh .

Job profile of MBA finance

MBA finance's main duty is to help in rural development So , that Govt. of India can increase per capita income of rural peoples . All fund is given by Govt. and international financial institutions like world bank and IMF . MBA finance also have to make planning of resource distribution.
If you have the degree of MBA finance , you can appoint in Co-operative banks , NGOs , Govt. development agencies , insurance companies in rural areas .

Comparison between chartered accountant and MBA finance

noreply@blogger.com (Vinod Kumar) — Mon, 13 Jul 2009 11:32:00 +0000

CA is profession for auditing the company accounts . MBA finance is the profession for getting and utilization of company's fund by effective way.
For becoming Chartered accountant , you need to clear the final exam of ICAI . For becoming MBA finance , you need to clear the final exam. of MBA in the specialisation of Finance .
Chartered Accountant operate their profession independently. But MBA finance gets professional opportunity in companies and banks .
For becoming , Chartered Accountant , you have to study advance accounting and auditing and also to understand different law's provision . But for becoming MBA finance , you have to study advance management techniques for handling the finance of company.

Loss making public sector undertakings-due to poor financial management?

noreply@blogger.com (Vinod Kumar) — Mon, 13 Jul 2009 10:59:00 +0000

Above question is asked in Yahoo answer and for MBA finance can give its answer . Actually PSU are not suffering loss due to poor financial management but their management is not done by proper and qualified officers . Almost all high administrator becomes with political approach and with corruption and they do not manage properly and capture in losses .

Total expense to complete 2 yrs of MBA in finance

noreply@blogger.com (Vinod Kumar) — Wed, 08 Jul 2009 16:05:00 +0000

Approximate Rs. 100000 to Rs. 300000 is the total expense to complete 2yrs of MBA in finance . But this expenses may reduce or increase by admission in specific college . Quality of college of MBA will increase your expenses but approximate total expenses is above for doing MBA in finance in India .

Controlling Techniques

noreply@blogger.com (Vinod Kumar) — Fri, 19 Jun 2009 04:12:00 +0000

Control of business is done with different controlling techniques which can be useful for reducing the variance between actual performance and standard performance . There are following main techniques or method or controlling which can be classified into two head category .

A - Traditional Techniques

1. Observational techniques

Observational technique is traditional technique of controlling . Under this technique , manager appoint authorities who observes other employees . They also note the actual performance of employee and they report it to manager after manager decides whose performance is weak and how to improve it .

2. Statistical report

This is also technique of controlling . Under this technique company analysis the statistical data in the form of mean, median and mode also analysis the standard variation and correlation and find what are shortcoming in planning and try to control it .

3. Break even point analysis

This is the technique of controlling . Company sells their product up to the break even point because it is point where total cost equals to total sale value and company can get any loss . But sale below from this point means that total cost is more than total sale value and company will suffer losses . So , break even point is so important from controlling point of view . It is the reason that wise men have made it controlling technique and used in management .

4. Budgetary control :-

Budgetary control is that technique of controlling in which company managers make budget like production budget , sale budget , finance budget and research and development budget after this actual performance is measure with budget amount .

Modern techniques of Controlling

1. MIS

MIS means management information system . In this system , raw data is collected from direct or indirect sources and then after classification of data , different analysis is rendered by company managers and after this company managers provide information about favourable and unfavourable position of company's different plannings .

MIS is very important technique and it is used very high level after invention of computer and Internet .

2. Management audit system

This is very simple type of auditing which is done by chartered accountant and company manager can used it as technique of controlling management . Managers establish their relations with CA of company and after discuss they make system of internal management audit in which company CA and his staff audit at spot and check the efficiency and correctness of plan and its implementation on staff of company .

3. Return on investment

Return on investment meas capacity of earning profit on total investment which is invested by company . It is very scientific technique of controlling . Even Google is using also this technique for his google AdWords project control .

4. Responsibility accounting

Responsibility accounting is that controlling technique in which different responsibility centres are created by company managers and its name are cost center , profit center and investment center . After this every center is responsible for their cost . Main aim of making these centers is to increase profit , increase return on investment and decrease cost of production . Different budgetary cost are set in first and the each centre's actual cost is counted and recorded , if the actual cost of each center is less than budgeted cost , then it means that center has perform his duty better .

Difference between formal and informal organisation

noreply@blogger.com (Vinod Kumar) — Fri, 19 Jun 2009 04:06:00 +0000

1. Formal organisation is made under proper assigning of duties and delegation of authorities . Every employee under formal organisation is responsible for their works . But in informal organisation , no such delegation of authorities and assigning any duties but it made automatic and increase organisation culture .
2. Formal organisation is made under proper appointment of employee under recruitment , selection and training but informal organisation is made under good relation , talking in factory canteen , discussion free time in office .
3. Formal organisation is very necessary for business without this no co-ordination . But there is no necessity of any informal organisation .
4. Formal organisation sometime become burdens on head in the time of work overload but informal organisation reduces work overload burden .

Control definition Simplified

noreply@blogger.com (Vinod Kumar) — Fri, 19 Jun 2009 04:01:00 +0000

Control is that function of business management which is used for effective utilization of planning . After making planning and implementing it , manager observes the employees by different controlling techniques whether work is doing according to planning or not , that observation is called control . Without control of work , indiscipline , fraud , corruption and slowing work problems can arise which can reduce the efficiency of employee . Control enables employees more responsible for performing their duties . Control powers to the discipline and work culture . It is different from intervention and interfere in work but with controlling , manager tries to reduce wastage in work .

Steps of making Orgainsation

noreply@blogger.com (Vinod Kumar) — Fri, 19 Jun 2009 02:03:00 +0000

There are following steps in organisation process :-

Identification of Work

First of all identify your work . What are main work and what have to be done because these problems are the objectives for making organisation and it should set first .

2. Division of Work

Division of Work is the second step for making organisation . With division of work , every employee and worker can easily know what work is for him . With this he can do better work also.

3. Assigning of Work duties

After division of work , worker are given different work duties . This is very helpful for determination of the responsibility of employees .

4. Delegation of Powers

After assigning of duties , employer delegates his powers , so that employee can do his work properly .

5. Coordination and co-operation

After delegation of authorities , it is very necessary to enhance the coordination and cooperation among employees .

6. Feed back

Feed back receives from employee . They can explain formal or informally that they are satisfied from division of work or not .

Structure of Organisation

noreply@blogger.com (Vinod Kumar) — Fri, 19 Jun 2009 01:35:00 +0000

Organisation in simple words is the group of workers and employees who are experts in their field and they do their work for achieving the objectives of company . But without proper delegation of authority , they can not do their work . For delegation of work and division of work , it is very necessary for managers to make good structure of organisation . Structure can be made with different methods which can be explained following way :-

1. Line Organisation

Line organisation is that structure in which all the employees's authority is in line form . One top authority has power to direct following subordinate and whole organisation can easily divides in top level , middle level and lower level management .

2. Line and Staff Organisation

It is that structure whose shape in line form but every authority has some advisors who are the expert in their specific field and they guide authority for taking specific decision . It is the power of authority whether he apply the advice or not .

3. Functional Organisation

Function organisation is that structure in which there is not any line chain of Boss and subordinates but every employee who is expert in specific work become boss of his work and he is responsible only his work whole division of work is done on the basis of employees and labourers specialisation . There two big department one is planning department and other second is functional department . Now planning department appoints time and cost clerk , route clerk and functional department appoint speed boss , inspector and other functional boss for working in factory .

4. Committee Organisation

In this organisation , a committee is organised and in this committee , specialized personnel are included , they talk on specific problem and after this they provide special advice to administration for taking the action.

Simple Definition of Organisation

noreply@blogger.com (Vinod Kumar) — Thu, 18 Jun 2009 05:30:00 +0000

Making of groups for doing the activities of business for achieving the objectives is called organisation . After making of groups , co-ordination is established and every employee becomes the responsible for his duties

Qualities of a good planning

noreply@blogger.com (Vinod Kumar) — Thu, 18 Jun 2009 03:53:00 +0000

☼ Based on past data and its evaluations

☼ Flexible

☼ Telling the limitations of planning in made plan

☼ Updated according to time

☼ Plans after evaluation of alternative course of action

☼ Concentrate on work

☼ Including all components like objectives , policies , procedure , rules , method , programme , project and budget in planning

☼ Feed back of employees

☼ Apply of Time principle

☼ Short term plans should assist long term plans

☼ It should be simple

☼ It should be realistic

☼ It should be complete

☼ It should be helpful for achieving the objectives .

☼ It should be helpful increase the efficiency

Components of Planning

noreply@blogger.com (Vinod Kumar) — Thu, 18 Jun 2009 03:27:00 +0000

1. Objectives

objectives are that target which have to achieve . These are the top point of company . Company's main objectives are to maximize profit and wealth . So , this is the one main component of planning . Every company first identifies different objectives for making plannings .

2. Policies

Policies are guidelines which is given by company and company's departmental managers for increase the efficiency of company employees and creating work ethics .

3. Procedure

Procedure are those steps which are taken for doing any task . Any task or work may be small or big but it should be completed with specific procedure .

4. Rules

Rules are strict principles which are needed to create discipline in office . Manager knows that if employees leave from rules , it may possible that indiscipline will spread in office . Suppose , if company rule is to open office at 9 a.m. but after requesting all employees, manager of company leaves this rule . After this one employee started at 10 am and other started to reach office at 11 am . This exemption of rule reduces the growth of work . So , rules are so needed in office .

5. Method

When company makes procedure and its different steps , after this company evaluates every steps , every step can be performed with different alternative ways and every alternative way is called method .

6. Programme

Programme is very short term planning which is needed to show something or for motivating or providing some announcements .

7. Project

Projects are mainly financial planning . Company can make different projects for investing money or getting fund from different sources .

8. Budgets

Budgets are also components of planning . In this component , company manager makes plans for estimation of all future expenses and incomes and this is very useful for checking the performance of every employee and it is used in responsibility accounting .

Types of Planning

noreply@blogger.com (Vinod Kumar) — Thu, 18 Jun 2009 03:07:00 +0000

Planning can be classified under different head points . To know what are different types of planning is necessary for manager because after this can make good plan according to needed plans for specific purposes .

1. Long term and short term planning

Long term planning is related to all estimates for long term works of company . These plans are made for 5 to 10 years and in this plans company can decides to get fund or invest money in different projects . But short term plans are made for one years . In this plans , company manager decides to make schedule of routine work and manager makes different policies and rules under this plan.

2. Formal and informal planning

Formal planning is relating to written plans and subordinates are responsible to do work compulsory . In every countries' company's managers make plans , that plans are formal only . But some time company manager can also make informal plans without any written formility and these plans often made in free time and these plans are made on the informal talking of different employees with managers .

3. Financial and Non financial

If plannings are related to aquire or giving to other , then that plans are called financial plans and non financial plans are those plans in which , there is no fund needed to give or take by any body .

4. Standing and one time plans

Standing or regular plans are those which are continually made by manager in business management . After completing of these planning the process of same planning after some adjustment will again started but in one time plans , planning are made only one time for special purposes and after completing of the purpose , plans are no needed for any work .

Get MBA regular from Algol school of management & Technology

noreply@blogger.com (Vinod Kumar) — Wed, 17 Jun 2009 23:42:00 +0000

ALGOL has started admission of regular MBA in June 2009 . This one of good northern India's business school who is providing the facility of well stocked library , six well equipped IT and management labs , campus transport and AC hostel for boys and girls . This is top rated corporate await to recruit their students . So , contact ALGOL school of management and technology for regular admission Link

Steps of planning process

noreply@blogger.com (Vinod Kumar) — Wed, 17 Jun 2009 08:38:00 +0000

1st step - Identification of opportunity and problems

In this step , it is the duty of manager to identify the opportunity and problems . It means it will tell us why are we making plans . What problem will solve with planning .

2nd Step - Identification of Objectives

Manager should identify different objectives of company . After this he can make plans for achieving these objectives . Suppose , the company's objective is to earn profit . But for making planning to increase profit . Company will fix how much will company earn profit .

3rd step - Collection of Information

After making of different objectives of company , manager have to collect informational data relating to future plan . These are rough data , which will be helpful for completion the work of planning process .

4th step - Evaluate of collected information

This is very necessary step in which manager evaluates collected information in present situation . After this rough information is converted into company's valuable information for making plans .

5. Evaluate of Alternative course of Action

Planning tells us what to be done in future . After evaluate information , manager gets power to evaluate different alternatives of course of action . Because , one work can be done with different way . So , for making good planning , it is required to evaluate all the alternatives of course of action.

6. Select best alternative of course of action

After evaluating all alternative company selects best alternative to do work . Suppose Google Inc. has different alternatives to increase his sale of advertising products . But Google company's manager will evaluate all the alternatives and choose the best alternatives which is most useful for company under present condition .

7. Feed back

After selecting best alternative and applying the plans , company gets feed back from employees or customers , so that plans can be changed according to the situation and feed back report . We can take example of Google

When google launched any new product or make plans to launch any product . First of all google gets online feed back by writing what is your reaction or Do you like this and you have to answer in yes or no and your feed back is recorded in the account of Google company . Like this all company makes system for feed back .

Features of planning

noreply@blogger.com (Vinod Kumar) — Wed, 17 Jun 2009 04:46:00 +0000

Feature of planning means all characteristics of planning which shows its symptoms . To know features of planning is also important for MBA scholar in the subject of business management . There are following features of planning :-

1. Intellectual process

For making planning , manager has to think with brain and after deep intellectual they can make good plan . So , it is the first feature of planning .

2. Continuous process

Planning is continuous process . If one circle of planning completes , then again same circle activate and this process is continually works in the life of business .

3. First Function of management

This is the first function of management . With this no other function can be performed . After making of planning all other function can be activated by manager .

4. Forward looking and thinking

Planning is deciding in advance what to be done . So it is the thinking and looking of future and its different work which is done in future .

What is planning ?

noreply@blogger.com (Vinod Kumar) — Wed, 17 Jun 2009 04:39:00 +0000

Planning is management term because it is most used in management . Planning means deciding in advance what to done in future .
For determining of future works , there are many components include in planning like making of objectives , policies , procedures and rules and budget . Planning is that procedure to capture future with good and scientific estimations and probabilities .

Planning is based on historical data so , 70% to 80% result of planning are favorable for reducing the uncertainty of business .Planning is like river water which is continuously flowing and if it stopped all control of business may stop .

14 principles of management

noreply@blogger.com (Vinod Kumar) — Tue, 16 Jun 2009 11:44:00 +0000

Henry Fayol was the first person who wrote the 14 principles of management in 1916 but after this large number of USA wise persons and management experts explains it and utilize it in the business and got success in the business . These 14 principles are so flexible and easily change according to the nature of business .

These principles are not end point in large field of management , after revaluation of information technology , many new management principles includes but after this still 14 principals and its knowledge for the scholar of MBA is must .

Before taking any managerial decision , manager should paramount these principles because these principles are direction lines for MBA . So , I have explained these principles by simplified the head points , after this your duty to study deep when you become management consultant because its deep knowledge is also very necessary for a perfect business manager .

1. Division of work

Every work must be done by perfect employee and how can an employee becomes perfect . Only by division of work . So , Henry Fayol introduced this principle for fast production in factory and with this principle of management , skill and efficiency of labourers increase . They become specialize in their work , after this company can increase the standard of their product .

2. Principle of Equity of Authority and responsibility

This principle is the guideline for all the employees and authorities that authorities and responsibility are two part of one coin and if any higher authority delegates the power to his subordinate then it means that higher authority also delegates the responsibility for doing work on that status . This is wonderful principle which should be in the knowledge of every employee of any company because higher authority can ask about completing of any work and make you accountable also.

3. Principle of discipline

Discipline means obey the order of higher administrator . This principle explains the cultural and ethical value of Old India where if a person learnt from his master , he used to obey every duty of his master . Same principle will apply in business management . Discipline in work and in employee is key of success .

4. Principle of unity of Command

This principle states that orders should be given from one higher authority . If there are two higher authority who give order to one subordinate , then subordinate will misguide and he will not do any work. For the continuity of work , it is very necessary for manager that he observes that is there only one authority on labourer or employee who is giving command or order . If two authority are in same rank , then GM should promote or transfer to one of them .

5. Principle of unity of direction

One main different between direction and command that direction is just guidance without any order or there is not the provision of penalty or punishment , if other will not direct according to direction but in command , if employee will not follow it , it may possible that employer will give punishment for not obey the order . If direction is just guide then why the need of this principle . Answer is very simple . Direction is more powerful tool in the hand of manager because with this manager can make democratic environment but if direction is given by one authority because if two or more leader will give direction anti way , then it will surely reduce the efficiency of employee .

6. Principle of subordination of individual interest to General interest

This principle is telling about two interest . One an employee appoints in the company , there are large nos. of interest like he is interested to get promotion , he is interested to get high salary but this principle is also paramount to the general interest of company . If company sees that providing high salary to employee is not suitable under current situation , company can reduce salary of employees for some time , even any employee can be Removed from service under retrenchment .

7. Principle of handsome salary

This principle is also helpful for development of employee and supports employees that employer should give handsome salary to employee because of increasing inflation of necessary food prices , without handsome salary , employee will not satisfied and turnover ratio of employee will increase and if company wants to develop employee and increase production , then company should provides not only high salary but also provides large number perquisites to employees .

8. Principle of Centralisation

This principle explains that all the high powers relating to making plans and taking decisions must be in few hands and centralisation of power is good way to promote business with high speed . If all powers are decentralised , then it may possible that corruption makes his place and speed of development of business will decrease .

9. Principle of Scalar Chain

In every type of business , business is divided under different levels of management and one authority is above from every subordination but problem arises when one subordinate wants to communicate to other equal rank subordinate . Is it possible that he can communicate . Yes it is possible , Henry Fayol gives the name of this communication "Scalar Chain " After this all problem of management communication are solved .

10. Principle of Orderliness

This principle refers to maintain every thing on its proper place . Even employees also should be one their proper place .

11. Principle of Equality

This principle explains that all employees are same in the eye of business . There is no need to do any partiality on the basis of religion or salary or any other things . If any company creates different among all employees on the basis of caste then it will reduce companies development and progress .

12. Principle of stability of Employees

Stable employee in any organisation is like fixed asset so company should make stable employee by providing good monetary and non monetary incentives to employees .

13. Principle of Initiatives

Initiatives are those motivations which are helpful for employee to do all work with better way. This makes interesting environment of business . All employees feel happy , if some higher authority initiates them to do any work by themselves.

14. Principle of Espirit de corps

Espirit de corps means strength in unity . Henry fayol was high supporter of unity because he knew its importance and value . All employee should understand and create unity among them .

Is management profession ?

noreply@blogger.com (Vinod Kumar) — Tue, 16 Jun 2009 01:29:00 +0000

Before answering this question , we should know what is profession . Profession includes all works which are done after getting special education and skills for doing that work. With high education and expertise on any field , nobody can do profession . Profession is very helpful to earn and live the life with money source this profession . Now we can easily answer this question . Management is profession because almost all symptoms of profession to appear in management . For becoming managerial consultant you have to get MBA degree in any specialized field . After specialization in finance , human resources , marketing or research and development , managerial consultant starts his services and gets his professional fees from this . A very small managerial consultant can easily earn $ 2000 to $ 5000 dollars per month . Like any other profession , he uses some code of conduct in his profession . Like profession , management is trained by specific business school and they become certified by these institute .

Difference between administration and management

noreply@blogger.com (Vinod Kumar) — Mon, 15 Jun 2009 23:01:00 +0000

1. Administration is top level management in which all the plannings , policies are made by administrator . But management is done all works for activate plans in to action . But all decision powers in the hand of administration .

2. Administration is brain of business but management is hand and foot of business .

3. Administration has power to get net profit of business or share in net profit but management has only power to get salary or wages .

4. Administration word is so popular in govt. and military sector but management is so popular in business specially private sector .

Levels of Business Management

noreply@blogger.com (Vinod Kumar) — Mon, 15 Jun 2009 22:48:00 +0000

1st level - Top level management

In this level , board or directors , managing directors and chief executive officer (CEO ) makes all plans , policies for companies . They have power to take different business decisions . Even shareholders who are the real owner of company is also comes in top level management but they have only voting power . But all top level works is done by board of directors .

2nd level middle level management

In this level all departmental manager involve for the activities of business . There are many department like research and development , financial and production , personnel and marketing . Managers of respective department is responsible for making planning and policies and taking different decisions relating to their department .

3rd level - Lower level management

Under this level , Foreman , job leader , group of batch and labours work for business . Their duties in factory , where the actual production work is doing and needed labourers for Keep on working it .

Scope of business management

noreply@blogger.com (Vinod Kumar) — Mon, 15 Jun 2009 22:32:00 +0000

Scope means the total area of management in which management is activate . The scope or area of management is very large . From India to USA , management is needed in every type of business . So , its scope can not be bounded in boundaries . But we can write main fields or area of business management

1. Research and development management

In this area , manager is responsible for doing all activities of research and development of business . For this company provides him all facilities like lab , search equipments and other books . Its main aim is to reduce the cost of business and increase the efficiency of business .

2. Financial management

In this area , manager is responsible to make ideal capital structure . Effective utilisation of financial and operating leverage in business . He also calculates different cost of capital and different values of different techniques of capital budgeting for selecting good investment proposal .

3. Production management

In production management , manager is responsible to provide all raw material , labours to production department . He spends his time to reduce the cost of production and observes all the activities of production .

4. Personnel management

Under this management , manager is responsible to recruit , selection , training of employees . He provides all facilities to employees for making ideal working environment . He does also works for benefits of employee and employer . He makes different policies relating to salary and promotion of employees on the basis of work analysis .

5. Marketing management

Marketing management is that functional area of business management , in which manager is responsible to reach product from production to customers . He works for business as best link between business and customers and makes good relationship with employees .