Basic Financial Management Questions and Answers
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Q - 1 Do you know internal structure of a finance department in medium and large businesses?

Ans- There is no standard pattern for the organization of finance function. In general, internal structure of finance department can take following form:

- Board of directors
- Executive Committee

Vice President(Production)
Vice President(Finance)
-> Financial Controller
•Accounting and Costing
•Annual Reporting
•Internal Auditing
•Statistics and Finance
•Record Keeping
-> Treasurer
•Receivables management
•Taxes and Insurance
•Cost management
•Banking Relations
•Real Estates
•Dividend Distribution
Vice President(Marketing)
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Q - 2 Explain the main duties and responsibilities of a finance executive?

Ans- Recurring Duties:

- Deciding the financial needs

- Raising the funds required

- Allocation of funds
•Fixed assets management
•Working capital management

- Allocation of Income

- Control of Funds

- Evaluation of Performance

- Corporate Taxation

- Other duties : to prepare annual accounts, carrying out internal audit, safeguarding securities, present financial reports to top management. Etc.

Non recurring Duties :

- Preparation of financial plan at the time of company promotion

- Financial adjustments in times of liquidity crisis

- Valuation of the firm at the time of acquisition and merger etc.
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Q - 3 What is uniform costing? What is the scope of uniform costing?

Ans- Uniform costing is the application of the same accounting and costing principles, methods or procedures uniformly by various undertakings in the same industry. It is a particular technique which applies the usual accounting methods like standard costing, marginal costing, and budgetary control.

Uniform costing method can be advantageously applied:

-In single organisation having number of branches.

-In a number of firms in the same industry who are inter connected through trade association.

- In industries which are similar such as cotton, gas and electricity.
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