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BSc CSITBachelor of Science in Computer Science and Information TechnologyBCABachelor of Computer ApplicationBITBachelor of Information TechnologyBIMBachelor of Information ManagementBBABachelor of Business AdministrationBBSBachelor of Business StudiesBBMBachelor of Business ManagementBITMBachelor of Information Technology Management

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FIN207 Financial Management

Financial ManagementTU Board 2023

How does accounting BEP differ from cash BEP?

2

Answer

· Based on the official syllabus and past papers
Updated
Depreciation Impact on Cash FlowDr.Cr.To Fixed Assets A/c10,000To Depreciation A/c2,000By Cash A/c10,000By Depreciation Expense2,000
Depreciation (₹2,000) reduces cash outflow but is added back in cash BEP calculations.
Quantity (Units)₹ (Revenue/Cost)OTotal Revenue (TR)Total Cost (TC) - AccountingTotal Cost (TC) - CashAccounting BEP (Qₐ)Qₐ*TR = TCₐCash BEP (Qₖ)Qₖ*TR = TCₖ
Break-even comparison: Accounting BEP (Qₐ=5) vs. Cash BEP (Qₖ=7.5) for a firm with ₹20 FC, ₹10/unit VC (accounting), and ₹8/unit VC (cash).

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