It gives us immense pleasure to present the First Edition of Accounting and Auditing-II (Management Accounting-II), carefully developed to align with the Second Year B.Com. curriculum under the University of Mumbai, as per the guidelines of the National Education Policy (NEP) 2020 and is applicable from the academic year 2025–26.
Accounting is no longer just about numbers, it is the language of business, decision-making, and strategic growth. In today’s fast changing financial environment, learners need more than definitions and formulas; they need clarity, application, and confidence. This book has been written with the goal of transforming the way students interact with accounting by making concepts easier, practical, and connected to real business scenarios.
It aims to present the subject in a clear, systematic, and academically sound manner, ensuring that learners at various levels can build a strong conceptual foundation. We set out to create a resource that explains every concept in simple language, supported by real-world examples, diagrams, case studies, and problem solving techniques.
This book aims to equip learners with the knowledge required for academic excellence and practical accounting competence. We hope it serves as a valuable resource for classroom learning, examination preparation, and professional growth.
Contents –
1 Working Capital Management
1.1 Introduction
1.2 Definition and Classification of Working Capital
1.3 Concepts of Working Capital
1.4 Working Capital Cycle
1.5 Requirements of Working Capital
1.6 Kinds of Working Capital
1.7 Components of Working Capital
1.8 Determination of Working Capital
1.9 Forecasting the Working Capital Requirements
1.10 Working Capital Cycle and Cash Conversion Cycle
1.11 Questions
2 Treasury and Cash Management
2.1 Treasury Management: Meaning and Functions
2.1.1 Introduction
2.1.2 Function of Treasury Management
2.2 Cash Management: Need, Plan and Budgeting
2.2.1 Meaning
2.2.2 Need for Cash Management
2.2.3 Planning
2.2.4 Cash Budget
2.3 Preparation of Cash Budgets for Short and Long Periods
2.4 Managing Cash Collection and Disbursements: Accelerating Cash Collection and Controlling Payments
2.4.1 Meaning
2.4.2 Objective of Cash Management
2.4.2.1 Accelerating Cash Collections
2.4.2.2 Controlling Payments/Disbursements
2.4.3 Recent Advancements in Cash Management
2.5 Cash Model: Calculation of Cash Cycle, Minimum Operating Cash and Cash Turnover
2.5.1 Meaning and Calculation of Cash Cycle
2.5.2 Minimum Operating Cash
2.5.3 Cash Turnover
2.6 William Baumol’s Economic Order Quantity Model (Practical Problems)
2.6.1 Introduction
2.6.2 Illustration
2.7 Miller-Orr Cash Management Model
2.7.1 Introduction
2.8 Questions