PRINCIPLES OF MANAGEMENT

PRINCIPLES OF MANAGEMENT

  1.How are principles of management formed?                                                                          

  2.Why is it said that the principles of management are universal?                                                     

  3.Why is it said that principles of management are flexible?                                                     

  4.Which principles of management promotes team spirit?
  5.Who was the first to identity functions of management?
  6.Which principle of management suggests that a subordinate should receive   orders from and be accountable to one superior? 

  7.Who gave the concept of scientific management? What was his profession?                          

  8.Which principle of scientific management suggest the introduction of scientific investigation and analysis of management practice?                                                                             

  9.What is the basis of formation of scientific management?                                                      

10.Which principle of management is violated if an employee is asked to receive orders from two superiors?
11.“Workers  should be encouraged to develop and carry out their plans for improvements”. Identify the principle of management formulated by Fayol.                                                   

12.It has been observed that the prevailing situation in an organization is due to the violations of the principle of ‘order’. What might have been your observation?                             

13.Which principle of management is violated when a manager grants one month medical leave to a superior with pay and only one week medical leave to an accountant?                                     

14.Mohan a manager, expects his colleagues to get work out of subordinates    without giving them any powers. Which principle of management is being overlooked and why?

15.Which principle of management aims at securing the loyalty and devotion of the employees by giving them fair and just treatment?
16.Which principle of management envisages that each group of activities having the same objective must have one head and one plan? Explain the principle with suitable example.                                

17.If an organization does not provide the right place for physical and human resources in the organization, which principle is violated? What are its consequences?                                               

18.The production manager of an automobile company asked the foreman to achieve a target production of 200 units (Scooters) per day. But he did not give him the authority to requisition tools and materials from the store department. Can the production managers blame the foreman if he is not able to achieve the desire target?  

19.Name and explain that principle of Fayol which suggest that communication from top to bottom should follow the official lines of command?                                                             

20.Identify the technique of scientific management which are described by the statement given below:-

 i.When specialists supervise each worker.                                                            

 ii.Change in the attitude of workers and management towards one another. From competition to Co-operation.

 iii.When uniformity is introduced  in materials. Machine, tools, method of  works and working conditions after, due research. 

21.Hina & Harish are typist in a company having same educational qualification. Hina is getting Rs.3000 per month and harish Rs. 4000 per month as salary far the same working hour. Which principle of management is violated in this case?            

ANSWERS

1. They are formed by practice and experimentation.

2.  Because they can be applied to all types of organization :- business as well as non business, small as well as large, public sector as well as private sectors.

3. Because they can be modified by the managers when the situation so   demands.

4. Esprict De Corps.

5. Henri Payol.

     6.Principle of Unity of command.

     7.F.W.Taylor gave the concept of scientific management and he was an American mechanical engineer.

     8.Science, not rule of Thumb.

     9.Observation & Experimentation.

   10.Principle of unity of Command

   11.Principle of initiative.

   12.People and materials are not in suitable places at appropriate time.

   13.Principle of equity.

   14.Principle of parity of Authority and Responsibility.

   15.Principle of Equity.

   16.Unity of Direction

   17.Principle of Order

   18.No, the production manager can not blame the foreman because he did not give material from the stores department. Since he had no authority, he could not fulfill his responsibility.

  19.Principle of Scalar Chain.

  20.1.Functional Foremanship.

2. Mental Revolution

3.Standardization of works.

21.Principle of fair remuneration. 

KENDRIYA VIDYALAYA NO.2 NAUSENABAUGH VISAKHAPATNAM 5.

CLASS TEST

SUBJECT: ACCOUNTANCY                 DATE: 28.04.2012                  MAX.MARKS: 15

Q.1 Where would you record ‘Interest on drawing’ when capitals are fixed?  1 m

Q.2 State on difference between Profit and Loss a/c and Profit & Loss appropriation a/c.   1m

Q.3 In the absence of partnership deed specify the rules relating to the interest on partners loan and salary to partners.  1m

Q.4 Amit is partner in a firm he withdrew the following amount during the year 2011.

01.02.11    Rs 4000

01.05.11    Rs 10000

30.06.11    Rs 4000

31.10.11    Rs 12000

31.12.11    Rs 4000

Interest on drawings is to be charged at 7.5% p.a. Calculate interest on drawing to be charged for the year ending 31.12.11          (4m)

Q.5 A, B and C are partners their capital a/c being Rs 30000, Rs 25000 and Rs 20000 respectively. In arriving at these figures the profit for the year ending 31.3.2011 amounting to Rs 24000 had been credited to partners in the proportion in which they shared profits. During the year their drawings were Rs 5000, Rs 4000 and Rs 3000 respectively. Subsequently the following omissions were noticed.

1. Interest on capital at the rate of 10% p.a was not charged.

2. Interest on drawings A – Rs 250 B - Rs 200 and C – Rs 150 was not recorded.

Record necessary adjustment entry.        (4m)

Q.6 Amit and Sumit are partners sharing profits and losses in the ratio of 3:2 with capital Rs 50000 and Rs 30000 respectively. Interest on capital is agreed to be paid @ 6% p.a. Sumit is allowed a salary of Rs 2500 p.a. During 2011 the profit prior to the calculation of interest on capital but after charging Sumit salary amounts to Rs 12500. A provision of 5% of profit is to be made in effect of manager’s commission. Prepare profit and loss appropriation a/c.     (4m)

SUGGESTED ANSWERS

Ans. 1 Current a/c

Ans.2 Profit and loss a/c is prepared to ascertain the net profit earned by the organization.

Profit and loss appropriation a/c is prepared to find how the profit earned will be distributed among the partners.

Ans. 3 Interest on loan will be given @ 6%p.a and no salary will be given to the partners in the absence of partnership deed.

Ans.4

Date	Amount	Period	Product
01.02.11	4000	11	44000
01.05.11	10000	8	80000
30.06.11	4000	6	24000
31.10.11	12000	2	24000
31.12.11	40000	0	0
		TOTAL	172000

Interest on drawing = 172000 x 7.5 x 1   = Rs 1075

                                             100 x 12

Ans. 5

	A	B	C
Amount received  (A)	8000	8000	8000

               Dr                                       Profit and loss appropriation a/c                        Cr

To Interest on Capital		By Profit and Loss a/c	24000
A	2700	By Interest on Draw.
B	2100	A	250
C	1500	B	200
To Profit transfer to		C	150
A Capital	6100
B Capital	6100
C Capital	6100
TOTAL	24600	TOTAL	24600

Statement showing Opening Capital

	A	B	C
Closing Capital Bal	30000	25000	20000
+ Drawing	5000	4000	3000
	35000	29000	23000
- Profit and loss a/c	8000	8000	8000
Opening Capital bal	27000	21000	15000

	A	B	C
Interest on Capital	2700	2100	1500
Profit and Loss a/c	6100	6100	6100
	8800	8200	7600
Interest on drawing	250	200	150
Amount Receivable (B)	8550	8000	7450
(A)   – (B)	550 Cr	---	550 Dr

Journal entry

             C Capital a/c   Dr    550

               To A Capital a/c            550

           (being adjustment entry for interest on capital and drawing pass)

Ans.6

            Dr                                    Profit and loss appropriation a/c                             Cr

To interest on capital		By Profit and Loss a/c	15000
Amit	3000	(12500+2500)
Sumit	1800
To Sumit Salary	2500
To Manager Comm.	750
To Profit transfer to
Amit Capital	4170
Sumit Capital	2780
TOTAL	15000	TOTAL	15000

CLASS TEST MARKS

MAX.MARKS: 15

MONTH: APRIL 2012

S.No	Name	Bus.Studies (15)	Accountancy (15)
1	Abhishek	7	4
2	Amarjeet	5	3
3	Ankur	2	4.5
4	Alok	7	5
5	Diksha	11	AB
6	Gaurav	AB	AB
7	Jyoti	7	12
8	Madhu Bala	10	9
9	Mamta	15	12
10	Neha	13	9
11	Preeti	10	12
12	Priyanka	8	8
13	Rajat	6	2
14	Rupali	7	10.5
15	Sandeep	10	3.5
16	Shabeena	7	8
17	Shivali	8	5.5
18	Shubham	2	AB
19	Sneha	7	10.5
20	Soni Kumari	8	6
21	Tanmay	6	5
22	Vandana	13	11