ISC Class 12 Accounts Syllabus

ACCOUNTS (858)
Aims:
1. To provide an understanding of the principles 2. To develop an understanding of the form and
of accounts and practice in recording classification of financial statements as a
transactions and interpreting individual as means of communicating financial
well as company accounts. information.
CLASS XI
There will be two papers in the subject: 2. Journal, Ledger and Trial Balance
Paper I - Theory: 3 hours ……80 marks (i) Journal: recording of entries in journal with
narration.
Paper II- Project Work………20 marks
(a) Classification of Accounts- traditional
PAPER - I (THEORY) – 80 Marks classification or modern approach.
(b) Double Entry System.
There will be one paper of 3 hours duration of
(c) Rules of journalizing – traditional
80 marks divided into two parts:
classification or modern approach.
Part I (20 marks): will be compulsory and will (d) Meaning of journal; Advantages of
consist of short answer questions, testing using a journal.
knowledge, application and skills relating to (e) Format of journal.
elementary/ fundamental aspects of the entire (f) Simple and compound journal entries.
syllabus. (g) Opening Journal entry.
Part II (60 marks): Candidates will be required to (h) Journal Entries- Input CGST and Input
answer five questions out of eight from this section. SGST / Input IGST; Output CGST and
Each question shall carry 12 marks. Output SGST/ Output IGST) / Setting
off Input GST against Output GST.
1. Introduction to Accounting (ii) Ledger: posting from journal to respective
Background of accounting and accountancy; ledgers.
types of accounts; basic terms used in (a) Meaning of ledger.
accounting, and Accounting Equation. (b) Format of a ledger.
(i) Evolution of accounting: The three phases. (c) Mechanics of posting.
(ii) Basic Terms: Event, Transaction, (d) Closing / Balancing of ledger accounts-
Vouchers, Capital, Assets (intangible, expenses and revenues to be closed by
tangible, fixed, current, liquid, wasting and transferring to Trading / P/L Account
fictitious), Liabilities (internal and external depending upon their direct/ indirect
– current, long-term and contingent), nature and balances of Assets,
Trade Debtors, Trade Creditors, Liabilities and Capital to be carried
Purchases, Sales, Goods traded in, Stock down.
(raw material, work in progress and (e) Adjusting and closing journal entries.
finished goods), Profit, Loss, Expense,
(iii) Sub-division of journal - cash book
Revenue, Income and Drawings.
[including simple cash book and triple
(iii) Accounting equation: Meaning and
column cash book (cash, bank and
usefulness.
discount) with - contra entry pertaining to
(iv) Meaning and definition of Book-keeping,
receipt of cheque not deposited on the same
Accounting and Accountancy; difference
day; adjustments pertaining to a definite
between book-keeping, accounting and
cash balance to be maintained / overdraft
accountancy; accounting cycle.
facility to be availed at the end of the
(v) Users of accounting information.
month. Petty cash book (including
(vi) Subfields of accounting: Meaning of
analytical and imprest system), sales day
financial accounting, cost accounting and
book, purchases day book, sales return day
management accounting.
book, purchases return day book and
NOTE: Practical problems in Accounting Journal proper.
Equation are not required.

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 (a) Cash book [including simple cash book 4. Depreciation
and triple column cash book (cash,
Depreciation, Methods of charging
bank and discount) with - contra entry
depreciation, Method of recording depreciation.
pertaining to receipt of cheque not
deposited on the same day; adjustments (i) Depreciation: meaning, need, causes,
pertaining to a definite cash balance to objectives and characteristics.
be maintained / overdraft facility to be (ii) Methods of charging depreciation: Straight
availed at the end of the period]. Line and Written Down Value method;
(b) Petty cash book (including analytical advantages, limitations of both the methods
and imprest system). and differences between the two.
(c) Sales day book, purchases day book- (iii)Methods of recording depreciation:
Simple (Date, Particulars, I. No, L.F,
charging to asset account, creating
Details, Amount); Columnar (Date,
provision for depreciation / accumulated
Particulars, I. No, L.F, Details, Net
Invoice, Goods, Carriage, GST-Input depreciation.
CGST and Input SGST / Input IGST; (iv) Problems relating to purchase and sale of
Output CGST and Output SGST / assets (with or without asset disposal
Output IGST- Amount or percentage account) incorporating the application of
given). depreciation under the two stated methods.
(d) Sales return day book, purchases return NOTE: Questions on change of method from
day book- Simple (Date, Particulars, SLM to WDV and vice-versa are not required.
Credit/ Debit Note No., L.F, Details,
Amount. 5. Bills of Exchange
(e) Journal proper. (i) Introduction to Negotiable Instruments:
(f) Mechanics of posting from special explanation of basic terms.
subsidiary books. Meaning of negotiable instruments; Bills of
NOTE: Transactions with GST is excluded in exchange, promissory note (including
Cash Book and Returns Books. specimen and distinction), cheque,
advantages and disadvantages of Bills of
(iv) Trial Balance. Exchange, explanation of basic terms -
(a) Meaning, objectives, advantages and drawer, drawee, payee, endorser,
limitations of a Trial Balance. endorsee, bill on demand / bill on sight, bill
(b) Preparation of the Trial Balance by the after date, bill after sight, tenure of the bill,
balance method from the given ledger days of grace, due date, endorsement and
account balances. discounting of bills, bill sent for collection,
dishonour of a bill, holder of a bill, noting
3. Bank Reconciliation Statement charges, notary public, renewal of a bill,
Bank Reconciliation statement. retirement of a bill and insolvency of the
drawee/acceptor.
(i) Meaning and need for bank reconciliation
statement. (ii) Practical problems on the above in the
(ii) Preparation of a bank reconciliation books of drawer, drawee and endorsee-
statement from the given cash book balance Journal entries and Ledger accounts.
/ overdraft or pass book balance / Self explanatory.
overdraft.
NOTE:
(iii) Preparation of a bank reconciliation
• Accommodation Bill is not required.
statement from the extract of the cash book
• Recording in the books of the bank not
as well as the pass book relating to the required.
same month. (Practical problem not
required) 6. Accounting Concepts
(iv) Preparation of an amended cash book and GAAP (Generally Accepted Accounting
a bank reconciliation statement after Principles), Basis of Accounting; Accounting
adjusting the cash book balance from the Standards; Knowledge and understanding of
given cash book balance. IFRS (International Financial Reporting
Standards).
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 (i) GAAP: Going Concern, Accounting Entity, (iv) Preparation of Trading Account, Profit and
Money Measurement, Accounting Period, Loss Account and Balance Sheet with
Complete Disclosure, Revenue necessary adjustments.
Recognition, Verifiable Objective, Adjustments relating to closing stock,
Matching Principle, Historical Cost, outstanding expenses, prepaid expenses,
Accrual Concept, Dual Aspect Concept, accrued income, income received in
Materiality, Consistency, Prudence and advance, depreciation, bad debts, provision
Timeliness, Industry Practice, Substance for doubtful debts, provision for discount
over legal form. on debtors, manager’s commission (on the
(ii) Basis of accounting – cash basis and net profit before and after charging such
accrual basis (meaning; difference). commission), goods distributed as free
(iii) Accounting Standards: Meaning; Utility/ samples, goods taken by the owner for
Advantages. personal use and abnormal loss; Treatment
(iv) IFRS (International Financial Reporting of Adjusted Purchases and calculation of
Standards) - Meaning; Need for IFRS; cost of goods sold.; Input CGST and Input
Fundamental Assumptions in IFRS- Going SGST/ Input IGST and Output CGST and
Concern, Accrual, Measuring Unit, Output SGST/ Output IGST given in the
Purchasing Power; difference between Trial Balance to offset against each other
IFRS and Indian GAAP; Procedure for in the Balance Sheet.
implementation of IFRS; India and IFRS.
(v) Marshalling of a Balance Sheet: Order of
7. Final Accounts and Concept of Trading, permanence and order of liquidity.
Profit and Loss account and Balance Sheet
(with and without adjustments), Marshalling (vi) Adjusting, closing and transfer entries.
of Balance Sheet GST is excluded in Adjustments.
(i) Capital and Revenue Expenditure/Income. NOTE:
(a) Meaning and difference between 1. Practical problems on preparation of
capital expenditure and revenue provision for doubtful debts account are
expenditure with examples. not required.
(b) Meaning and difference between 2. Since creating provision for doubtful debts
capital income and revenue income accounts involves being prudent, in the
with examples. absence of any information of the amount
(c) Meaning and difference between of the new provision, it will be assumed
capital profit and revenue profit with that the amount of the new provision will
examples. be the same as the old provision unless the
(d) Meaning and difference between remaining debtors are good.
capital loss and revenue loss with
examples. 8. Rectification of Errors
(e) Meaning of deferred revenue Errors and types of errors: Rectification of
expenditure with examples. errors after the preparation of trial balance and
(ii) Provisions and Reserves. rectification of errors after the preparation of
Final Accounts.
Meaning, importance; difference between
provisions and reserves; types of reserves - (i) Types of Errors: errors of omission, errors
revenue reserve, capital reserve, general of commission, errors of principle,
reserve, specific reserve and secret reserve. compensating errors.
(ii) Rectification of errors after the preparation
(iii) Trading, Profit and Loss Account and of trial balance and through suspense
Balance Sheet of a sole trader, (Horizontal account if required.
Format) without adjustments. (iii) Rectification of errors after the
Meaning object, importance and preparation of Final Accounts through P/L
preparation of Trading, Profit and Loss Adjustment A/c if required.
Account and Balance Sheet of a sole NOTE: Redrafting of Balance Sheet not
trader. required.

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9. Accounts from incomplete records NOTE: Preparation of a Receipt and
Payments Account only or an Income and
(i) Single entry and difference with double
Expenditure Account with a Balance Sheet
entry.
from incomplete records need not be covered
(a) Meaning, characteristics and (in horizontal format).
limitations.
(b) Difference between Statement of 11. Introduction to the use of Computers in
Affairs and Balance Sheet. Accounting
(ii) Ascertainment of profit/loss by statement Introduction to Computerised Accounting
of affairs method including application. System: Components of CAS, Features,
Self-explanatory. Advantages and Limitations of CAS,
NOTE: Single entry system as applied to Accounting Information System and
partnership firms is not required. Management Information System.
Conversion of Single Entry into Double Entry (i) Components of Computerised
not required. Accounting System (CAS)-hardware
and software; operation of the
10. Non -Trading Organisation
computer system- input, processing,
(i) Non-Trading Organization: meaning, auxillary storage, output, application
objectives, necessity and treatment of of computer in accounting.
specific items. (ii) Comparison of accounting processes in
Self-explanatory. manual and computerized accounting.
(iii) Advantages and limitations of CAS.
(ii) Different books maintained and differences (iv) Types of Accounting Packages or
between them. software- ready to use, customized,
(a) Receipts and Payments Accounts: tailor-made with their advantages and
meaning, features, differences between limitations.
Receipts and Payments Account and (v) Accounting Information System and
Cash Book. Management Information System-
Meaning.
(b) Income and Expenditure Accounts:
meaning, features, difference, between
Income and Expenditure account and PAPER II – PROJECT WORK – 20 Marks
Profit and Loss account. Candidates will be expected to have completed two
(c) Balance Sheet and its role. projects from any topic covered in Theory.

(iii) Preparation of Income and Expenditure Mark allocation for each Project [10 marks]:
Account and Closing Balance Sheet.
Overall format 1 mark
Preparation of Income and Expenditure
Account and Balance Sheet when Receipts Content 4 marks
and Payments Account and other
Findings 2 marks
information is given.
(a) Entrance, admission fees, life Viva-voce based on the Project only 3 marks
membership fees, legacies, special
grants and special donations are to be A list of suggested Projects is given below:
capitalised.
(b) General donations, general grants and 1. Preparation of Journal / sub-division of journal,
all receipts of a recurring nature such Ledger, Trial balance and Financial Statements
as membership fees/ subscriptions are to of a trading organization on the basis of a case
be taken as revenue receipts. study.
(c) Preparation of accounts of incidental
activities such as restaurant accounts • Develop a case study of a sole trader
are not required. starting business with a certain amount of
capital.
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 He could have got the amount from his past the journal entries, post them into the
savings or by borrowing from a bank by ledger, prepare a trial balance and
mortgaging his personal assets or by thereafter prepare the NPO’s Cash Book,
winning a lottery or any other source. Receipts and Payment Account, its Income
• Write in detail, his transactions during the and Expenditure Account and its Balance
year- his purchases - cash and credit, sales- Sheet.
cash and credit, expenses, purchase of fixed
• The various expenses, for comparison
assets and depreciation charged on them,
purposes, could be depicted in the form of
any outstanding expenses, prepaid
expenses, accrued income, drawing bills of bar diagrams and pie charts.
exchange, accepting bills payable, etc. 3. Prepare a Bank Reconciliation Statement and
• From this case study developed (which Amended Cash Book from the information
should have at least 15 transactions), pass given in your Cash Book and Bank Statement
the journal entries, post them into the (Pass Book) with at least fifteen transactions.
ledger, prepare a Trial Balance and the 4. Complete the labels.
Trading and Profit and Loss Account and
(i) Prepare a Spreadsheet as per the following
Balance Sheet.
format:
• The various expenses for comparison
Revenue Jan. Feb. March April
purposes, could be depicted in the form of Outdoor
bar diagrams and pie charts. Sales
2. Preparation of the accounts of a Indoor Sales
Not-for-Profit-Organisation on the basis of a Total Sales
case study.
Expenses
• Develop a case study of an NPO by Salaries
beginning with the primary motive of Rent &
Utilities
establishing it, that is, why have you
Others
decided to open a club or a library or a
hospital, etc. (ii) Fill the Sales and Expenses for the months
in lakhs and calculate the Total Sales and
• Write in detail about the sources of capital Total Expenses.
fund, subscriptions, donations (ordinary (iii) Calculate the Net Profit using the excel
and special), other receipts and payments formulas by subtracting the expenses from
of your NPO as well as outstanding revenue.
expenses, prepaid expenses, subscription (iv) Highlight all the numbers and prepare a
due but not received, subscription received Bar Chart showing the Indoor and Outdoor
Sales for the months.
in advance, purchase of fixed assets and
(v) Save your work on the desktop as
depreciation charged on them, legacy
Label_Project.
received, etc.
(vi) Print a hard copy of your
• From this case study developed (which work and close the file.
should have at least 15 transactions), pass

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 CLASS XII

There will be two papers in the subject: (c)Partners’ Current Accounts when
fixed capital method is followed
Paper I - Theory: 3 hours ……80 marks
Interest on capital, interest on
Paper II- Project Work ……20 marks
drawings, interest on current
PAPER - I (THEORY) – 80 Marks accounts (debit and credit) salary,
There will be one paper of 3 hours duration of commission to partners and
80 marks divided into three Sections A, B and C. managers, transfer to reserves,
division of profit among partners,
It will be compulsory for all candidates to attempt
Section A. (d) Guarantee of profits
Section A (60 Marks): will consist of two parts, (e) Past adjustments (Relating to
Part I and Part II and have a total of eight interest on capital, interest on
questions. drawing, salary and profit sharing
Part I (12 Marks): will consist of Question 1 ratio).
(compulsory). This question will include NOTE:
short answer questions, testing
knowledge, application and skills relating to • Interest on loan given by the partner to the
elementary/fundamental aspects. Question 1 will firm is to be taken as a charge against
be based on Section A of the syllabus. profits. This interest will be debited to the
P/L account and credited to his loan
Part II (48 Marks): Candidates will be required to account.
answer four questions out of seven from this part.
Each question shall carry 12 marks. Part II will • Interest on loan taken by a partner from the
also be based on Section A of the syllabus. firm should be credited to P/L account and
Section B/ C (20 marks): Candidates will have a debited to his capital/current account as the
case may be.
choice of attempting questions either from Section
B or Section C. Candidates will be required to • Rent due to a partner is a charge against
answer two questions out of three from the section profit and is to be credited to partners’
of their choice. Each question shall carry 10 marks. current account in case of fixed capital
system or to partners’ capital account when
SECTION A capitals are fluctuating.
1. Partnership Accounts • Rectification of errors (past adjustments)
A. Fundamentals of Partnership through a single journal entry/ adjusting
and closing journal entries, preparation of
(i) Definition, meaning and features of a partners’ adjusted capital/current accounts.
Partnership.
• Admission of manager as a Partner is
Self explanatory.
excluded from the topic of past
(ii) Provisions of The Indian Partnership adjustments/guarantee of profits.
Act, 1932, with respect to books of
accounts. B. Goodwill
(i) Meaning and importance. Concept of goodwill and mode of valuation.
(ii) Rules applicable in the absence of a (a) Meaning, nature and features of
partnership deed. Goodwill.
(iii) Preparation of Profit and Loss (b) Factors affecting the value of goodwill.
Appropriation Account and Partners’ (c) Mode of Valuation.
Capital and Current Accounts. • Average profit method – Meaning
(a) Profit and Loss Appropriation and practical application.
Account.
− Simple average.
(b) Partners’ capital accounts: fixed
and fluctuating.
− Weighted average method.

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 • Super profit method – Meaning and (iv) Accounting treatment of accumulated
practical application. profits and losses.
• Capitalization method – Meaning General Reserve / Reserve Fund,
and practical application. Workmen Compensation Reserve/
− Capitalization of average profit. Fund, Investment Fluctuation
− Capitalization of super profit. Reserve/Fund, Contingency Reserve,
NOTE: Capital Employed/Net assets are Total Profit and Loss Account (Debit and
assets (excluding purchased goodwill, non- Credit balance) and Advertisement
trade investments and fictitious assets) less Suspense Account/ Deferred Revenue
outside liabilities. Expenditure.
Investments to be taken as non-trade (v) Adjustment of Capitals.
investments unless specified as trade
(a) Adjustment of old partner’s Capital
investments. Accounts on the basis of the new
C. Reconstitution of Partnership partner’s capital.
I. Admission (b) Calculation of new partner’s
capital on the basis of old
(i) Calculation of new profit sharing ratio,
sacrificing ratio and gaining ratio. partner’s adjusted capital.
Self Explanatory (vi) Change in Profit Sharing Ratio.
(ii) Accounting treatment of goodwill on Change in PSR takes place at the time
admission of a partner.
of admission of a partnership firm.
Based on Accounting Standard –26
issued by the Institute of Chartered Accounting treatment of accumulated
Accountants of India in the context of profits and losses through one journal
Intangible Assets. entry: (Adjustment of the incoming
(a) Premium for goodwill paid partner’s share to be done through his
privately. current account-similar to the
(b) Premium for goodwill paid (in cash treatment of goodwill not brought in
or kind) and retained in the cash.)
business.
(c) Premium for goodwill paid and Gaining partners cap/current A/c Dr.
withdrawn by the old partners.
To sacrificing Partners cap/current (in
(d) When the incoming partner cannot
bring premium for goodwill in case of profits).
cash, adjustments are to be done Sacrificing partners’ cap/current A/c Dr.
through his current account.
(e) Hidden goodwill. To Gaining Partners cap/current (in
(f) When goodwill appears in the old case of losses)
Balance Sheet. General Reserve/ Reserve
(iii)Preparation of Revaluation Account. fund, Workmen Compensation Reserve/
Preparation of a Revaluation Account Fund, Investment Fluctuation Reserve/
where changes in the values of assets
and liabilities are reflected in the new Fund, Contingency Reserve, Profit and
Balance Sheet after reconstitution of a Loss Account (Debit and Credit
partnership firm. Balance) and Advertisement Suspense
Account/ Deferred Revenue
NOTE: Memorandum revaluation account is
excluded from the syllabus. Expenditure.

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II. Retirement and death of a partner (ix) Change in Profit Sharing Ratio.
(i) Calculation of new profit sharing Change in PSR takes place at the
ratio, gaining ratio and sacrificing time of retirement / death of a
ratio. partnership firm.
Self Explanatory. Accounting treatment of
accumulated profits and losses
(ii) Adjustment with regard to goodwill through one journal entry:
including hidden goodwill. Gaining partners cap/current A/c
Self Explanatory. Dr.
(iii) Adjustment with regard to To sacrificing Partners cap/current
undistributed profits and losses. (in case of profits).
Self Explanatory. Sacrificing partners’ cap/current A/c
Dr.
(iv) Adjustment with regard to share of
To Gaining Partners cap/current
profits of the retiring or deceased
(in case of losses)
partner from the date of the last
Balance Sheet to the date of General Reserve/ Reserve
retirement or death (on the basis of fund, Workmen Compensation
time or turnover). Reserve/ Fund, Investment
Fluctuation Reserve/ Fund,
Through P & L Suspense A/c (in Contingency Reserve, Profit and
case of no change in PSR of Loss Account (Debit and Credit
remaining partners). Balance) and Advertisement
Through Gaining Partners capital/ Suspense Account/ Deferred
current A/c (in case of change in Revenue Expenditure.
PSR of remaining partners).
NOTE:
(v) Preparation of Revaluation Account − Preparation of Balance Sheet in
on retirement or death of a partner. Partnership Accounts to be done in
Self Explanatory. Horizontal format only.

(vi) Adjustment of capitals. − Memorandum Revaluation Account, Joint

Life Policy, Individual life policy are
(a) Readjusting the adjusted excluded from the syllabus.
capital of the continuing
partners in the new profit III. Dissolution of a Partnership firm.
sharing ratio. (i) Meaning of dissolution and
(b) Adjusting the capitals of the settlement of accounts under
continuing partners on the Section 48 of The Indian
basis of the total capital of the Partnership Act 1932.
new firm. Self Explanatory
(c) When the continuing partners (ii) Preparation of Memorandum
bring in cash to pay off the Balance Sheet, Realization
retiring partners. Account, Partner’s Loan Account,
(vii) Calculation and payment of amount Partner’s Capital Account and
due to retiring partner. Cash/Bank Account.
Self Explanatory. Self-explanatory.

(viii) Preparation of retiring partner’s NOTE:

loan accounts and deceased When an asset or a liability is taken to the
realization account any
partner’s executor’s loan account
corresponding/related fund or reserve is also
(with interest on loan accrued and transferred to realization account and not to
due and interest on loan accrued but the partners’ capital accounts.
not due).
Self-explanatory.
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When accounts are prepared on a fixed basis, (f) Disclosure of Share capital in the
partners current account balances are to be company’s Balance Sheet.
transferred to capital account. No adjustments are
required to be passed through current account. NOTE: Issue of bonus and rights shares,
private placement of shares, sweat equity
Bank overdraft is to be taken to the bank/cash A/c shares, employees’ stock option scheme,
and not to be transferred to realization account but reservations for small individual participants
bank loan must be transferred to realization and minimum tradable lots are not required.
account.
• If question is silent about the payment of a B. Issue of Debentures
liability, then it has to be paid out in full.
Problems on issue of debentures (at par, at
• If the question is silent about the realization of
an asset, its value is assumed to be nil. premium and at discount.)
• Loan taken from a partner will be passed Problems on issue of debentures to include:
through cash or bank account even if the (a) Issue of debentures at par, at premium
partner’s capital account has a debit balance. and at discount under Companies Act
• Loan given to a partner will be transferred 2013.
(debited) to his Capital account.
(b) Issue of debentures as collateral
• Admission cum retirement, amalgamation of
security for a loan.
firms and conversion/sale to a company
together with piecemeal distribution and (c) Issue of debentures for considerations
insolvency of a partner / partners not required. other than cash.
• To promoters.
2. Joint Stock Company Accounts • To underwriters.
A. Issue of Shares • To vendors

Problems on issue of shares. (d) Accounting entries at the time of issue

when debentures are redeemable at par
(a) Issue of shares at par and premium and premium.
under Companies Act, 2013.
(e) Calls in arrears, calls in advance and
(b) Issue of shares for considerations other
interest thereon.
than cash:
• To promoters (can be considered (f) Interest on debentures (with TDS).
either through Goodwill account or (f) Disclosure of Debentures in the
Incorporation costs account). company’s Balance Sheet.
• To underwriters. (g) Methods of writing off discount / loss on
• To vendors. issue of debentures- when debentures
(c) Calls in arrears, calls in advance and are redeemable in a lump sum at the
interest thereon including the end of a specified period; when
preparation of ledger accounts. debentures are redeemable in
(d) Over and undersubscription (including instalments.
prorata allotment). (h) Disclosure of discount on issue of
debentures in the company’s Balance
NOTE: In prorata allotment when shares are Sheet when debentures are redeemed in
issued at a premium, excess money received instalments.
on application will first be adjusted towards
the share capital. Any excess thereon will be C. Redemption of Debentures
utilized towards the Securities Premium • Creation of Debenture Redemption
Reserve. Reserve (wherever applicable)
When allotment or any call money is due, it is • Redemption of debentures out of
to be transferred to the calls in arrears profits.
account, on which interest if provided in the • Redemption of debentures out of
Articles of Association will be calculated. capital.
(e) Forfeiture and reissue of shares at par, • Redemption of debentures in a lump
premium or discount. sum.
Self explanatory.
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 • Redemption of debentures in annual Companies Act 2013 to be studied is as
instalments by draw of lots. follows:
• Redemption of debentures by purchase
in the open market- for immediate Statement of Profit and Loss for the year
cancellation; as an investment and then ended:……………..
later cancelled. Particulars Note Figures Figures
Self-Explanatory. No. for the for the
Current Previous
NOTE: reporting reporting
I. Calculation of ex-interest and cum-interest period period
are not required.
I Revenue from
II. In case of redemption of debentures in operations
annual instalments by draw of lots:
II Other Income
(i) The entire DRI purchased for the
redemption of the instalment of III Total Revenue
debentures is not sold at the end of the (I + II)
year but sold/further purchased to the IV Expenses:
extent to maintain 15% of the face
value of the debentures to be redeemed Cost of
in the next instalment. In case of materials
redemption in equal instalments, DRI consumed
purchased for the first instalment Purchases of
remains invested till the last instalment. Stock-in-Trade
(ii) Wherever applicable, DRR is Changes in
transferred to General Reserve in inventories of
proportion to the debentures redeemed. finished goods
D. Final Accounts of Companies Work-in-
Preparation of the Balance Sheet of a progress and
company (along with notes to accounts) as Stock-in Trade
per Schedule III Part I of Companies Act Employee
2013. benefits
As per the amendment made in Accounting expense
Standard 4, dividend proposed for a year is Finance costs
not a liability till it has been approved by
the shareholders. Thus, proposed dividend Depreciation
and
is not shown as a short-term provision in
amortization
the current Balance Sheet of a company but
expense
disclosed in Notes to Accounts under
Contingent Liabilities. Other expenses
All capital losses to be written off in the Total expense
year in which they occur unless otherwise V Profit before
mentioned. tax (III-IV)
NOTE: Schedule III Part II of Companies Act VI Less Tax
2013 (Statement of Profit and Loss) is not
required for the purpose of preparing final VII Profit after Tax
accounts of a Company. (V-VI)
However, for the preparation of Comparative
and Common Size Income Statements (Section
B – Unit 4: Financial Statement Analysis), the
extent and format of the Statement of Profit
and Loss as per Schedule III Part II of the
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 SECTION B The following items are to be taken when
calculating net cash flows from financing
MANAGEMENT ACCOUNTING
activities:
3. Financial Statement Analysis • Issue or redemption of shares at par,
issue of debentures at par and discount,
Comparative Statements and Common Size redemption of debentures at par.
Statements. • Interest paid on Long Term and Short
Meaning, significance and limitations of Term Borrowings and dividend –
Comparative Statements and Common Size interim and proposed/paid on shares.
Statements. • Long term borrowings and Short term
borrowings – bank overdraft, cash
Preparation of Comparative Balance Sheet and
Statement of Profit and Loss (inter-firm and credit and short term loan. whether
intra-firm) showing absolute change and taken or repaid.
percentage change. • Share issue expenses / underwriting
commission paid.
Common size Balance Sheet to be prepared as a The following items are to be taken when
percentage of total assets and total liabilities. calculating net cash flows from investing
Common size Statement of Profit and Loss to be activities:
prepared as a percentage of Revenue from • Cash purchase of fixed assets.
operations. • Cash sale of fixed assets.
NOTE: Preparation of comparative statements • Purchase of shares or debentures or
and common size statements to be made from long term investments of other
the Balance Sheets and Statements of P/L companies.
without notes to accounts. • Interest and dividend received on
shares or debentures or long term
4. Cash Flow Statement (Only for
investments of other companies.
Manufacturing Companies)
• Sale of shares or debentures or long
(i) Meaning, importance and preparation of a term investments of other companies.
Cash Flow Statement. The following items are to be taken for cash
and cash equivalents:
NOTE: Based on Accounting Standard – 3
(revised) issued by the Institute of • Cash
Chartered Accountants of India. • Bank
• Short term investments
(ii) Calculation of net cash flows from operating • Marketable securities
activities based on Indirect Method only. NOTE:
Preparation of a Cash Flow Statement from (i) Adjustments relating to provision for
two consecutive years’ Balance Sheet with taxation, proposed dividend, interim
or without adjustments. dividend, amortization of intangible assets,
Preparation of complete/partial cash flow profit or loss on sale of fixed assets
statement from extracts of Balance Sheets including provision for/accumulated
and Statements of P/L with or without depreciation on them, Profit or loss on sale
adjustments. of investment are also included.
NOTE: Any adjustment or an item in the (ii) Treatment of proposed dividend:
Balance Sheet relating to issue of bonus shares, (a) Dividend proposed for the previous
extraordinary items and refund of tax are not year will be an outflow for cash, unless
required. otherwise stated, on the assumption
that the proposed amount has been
(iii) Preparation of Cash Flow Statement on approved by the shareholders in the
basis of operating, investing and financing AGM.
activities. (b) No effect is given to Proposed Dividend
for the current year as it is not provided
for and is a contingent liability.
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 (c) Any unpaid dividend is transferred to B. Solvency Ratios:
Dividend Payable Account / Unpaid
Dividend Account which is shown in the (i) Debt to Equity Ratio:
Balance Sheet of the current year as
Debt / Long Term Debt
Other Current Liabilities under Current
Liabilities. Equity / Shareholders' Funds
(iii)Treatment of provision for doubtful debts- Debt = Long Term Borrowings +
Provision for doubtful debts can be treated Long Term Provisions Equity /
as a charge against profits or as part of the Shareholders’ Funds = Share Capital +
working capital changes. In case of good Reserves and Surplus
debtors, the provision will be treated as an
Or
appropriation of profit.
Non Current Assets + (Current Assets –
(iv) To calculate cash flow from operating
Current Liabilities) - Non Current
activities the Adjusted Profit and Loss
Liabilities
Account is not acceptable as per AS-3.
= Non Current Assets + Working
(v) Calculation of Net Profit before Tax has to
Capital- Non Current Liabilities
be shown as a Working Note.
= (Tangible Assets + Intangible Assets
5. Ratio Analysis + Non Current Investments +
A. Liquidity Ratios: Long Term Loans and Advances) +
Working Capital – (Long Term
Current Assets Borrowings + Long Term
(i) Current Ratio:
Current Liabilities Provisions)
Current Assets = Current Investments (ii) Proprietary Ratio:
+ Inventories (excluding Loose Tools Shareholders Funds/ Equity
and Spare Parts) + Trade Receivables + Total Assets
Cash and Bank Balance + Short-term
Total Assets = Non Current Assets +
Loans and Advances + Other Current Current Assets
Assets = Tangible Assets + Intangible Assets +
Current Liabilities = Short term Non Current
borrowings + Trade payables + Other Investments + Long Term Loans and
Current Liabilities + Short term Advances
Provisions +
Current Investments + Inventories
(ii) Quick Ratio / Liquid Ratio: (including Loose Tools and Spare Parts)
Quick Assets + Trade Receivables + Cash and Bank
Current Liabilities Balance + Short-term Loans and
Advances + Other Current Assets
OR
(iii) Debt to Total Assets Ratio:
All Current Assets- Inventories(excluding Loose Tools and Spare Parts)- Prepaid Expenses Debt
Total Assets
Current Liabilities
(iv) Interest coverage ratio =
Net profit before interest and taxes
OR
Interest
Liquid Assets Interest includes interest on only long
Current Liabilities term borrowings.

115
C. Activity Ratios: Gross Profit = Revenue from Operations –
Cost of Revenue from Operations/ Cost of
(i) Trade Receivable Turnover Ratio = Goods Sold
Credit Revenue from Operation Cost of Revenue from Operations = Cost
Average Trade Receivable of Material Consumed (including direct
expenses) + Change in inventories of
Credit Revenue from Operation = WIP and Finished Goods.
Revenue from Operation – Cash Or
Revenue from Operation Average Opening Inventory + Net Purchases +
Trade Receivables = Direct Expenses – Closing inventory
Opening Trade Receivable + Closing Trade Receivable (ii) Net Profit Ratio: =
2 Net Profit
 100
Revenue from Operations
(ii) Trade Payable Turnover Ratio =
Net Profit = Gross profit + Other Income
Net Credit Purchases – Indirect Expenses – Tax
Average Trade Payable
(iii) Operating Ratio:
Average Trade Payables =
Opening Trade Payable + Closing Trade Payable × 100
2
OR

(iii) Working Capital Turnover Ratio = × 100

Revenue from Operations
Working Capital Operating Expenses = Employee Benefit
Expenses + Depreciation + Selling and
(iv) Inventory Turnover Ratio = Distribution Expenses+ Office and
Cost of Revenue from Operation Administrative Expense.

Average Inventory Operating Income = commission received,

cash discount received.
Cost of Revenue from Operations =
Revenue from Operations – Gross (iv) Operating Profit Ratio:
Profit
Net Operating Profit
Or  100
Revenue from Operations
Cost of Material Consumed (including
direct expenses) + Change in Net operating profit = Net Profit
inventories of WIP and Finished Goods after Tax+ Non-Operating Expenses –
Non Operating Incomes
Or Or
Opening Inventory + Net Purchases+ Gross Profit – Operating Expenses +
Direct Expenses – Closing inventory Operating Incomes
Average Inventory = Non Operating Expenses = Finance
Opening Inventory + Closing Inventory Cost (Interest on Borrowings) + Loss on
sale of Non Current Assets
2
Non Operating Incomes = Interest and
D. Profitability Ratios: Dividend Received on Investment +
Profit on sale of Non Current Assets.
(i) Gross Profit Ratio:
Gross Profit
 100
Revenue from Operations
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 (v) Earning per share: SECTION C
Net Profit after Tax and Preference Dividend COMPUTERISED ACCOUNTING
No. of Equity Shares 6. Accounting Application of Electronic Spread
Sheet
(vi) Price Earning Ratio
(i) Concept of Electronic Spreadsheet.
Market Value of an Equity share Meaning, utility, merits and demerits of
Earning per share Electronic spreadsheets.
(ii) Features offered by Electronic Spreadsheet.
(vii) Return on Investment An understanding of basic features of
Net Pr ofit before Interest and Tax electronic spreadsheets such as: Creating
=  100 worksheet, entering data into worksheet,
Capital Employed heading information, data, text, dates,
NOTE: alphanumeric values, saving & quitting
worksheet. Opening and moving around in
1. Current Ratio includes Net Debtors (Gross an existing worksheet. Toolbars and Menus,
Debtors – Provision for doubtful debts) keyboard shortcuts. Working with single
while Trade Receivables Turnover Ratio and multiple workbooks - copying,
includes Gross Debtors. renaming, moving, adding and deleting,
2. Capital employed = Shareholders’ Funds + copying entries and moving between
Non-current liabilities – non trade workbooks. Formatting of worksheet- Auto
investments format, changing -alignment, character
OR styles, column width, date format, borders
Non-current assets (excluding Non-trade and colours. Previewing and Printing
investments) + Working Capital worksheet - Page setting, Print titles,
OR Adjusting margins, Page break, headers
Fixed Assets + Trade Investments + and footers. Formulas – summation,
Working Capital subtraction, division, multiplication,
3. Investments to be taken as non-trade average and percentage. Functions: date,
investments unless specified as trade if-then- else, freezing panes.
investments. (iii) Application of spreadsheets in generating
4. In Return on Investments Ratio- Net Profit the following accounting information:
before interest and tax will not include
interest on non-trade investments. 1. Payroll
5. Revenue from operation (for a Components of payroll – Basic, HRA,
DA and TA, CCA, deduction for PF and
manufacturing company)
income tax.
• Net Sales
For a manufacturing 2. Data Presentation
• Sale of scrap company Graphs and charts- using wizards,
various charts type, formatting grid
Other Income: (for a manufacturing company) lines and legends, previewing &
• Rent received (non- operating) printing charts
• Commission received (operating) Database - creation, sorting, query and
• Interest and Dividend Received (non- filtering a database.
operating)
7. Database Management System (DBMS)
• Profit from Sale of Fixed Assets (non-
operating) (i) Concept and Features of DBMS.
• Cash discount received (operating) Types and features of DBMS.
A conceptual understanding of the basic
features of Data Base Management System
(DBMS), i.e. data update and retrieval
using basic functions and commands of
SQL.
Basic Commands: Select, Where, And, Or,
Update, Delete and
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 Basic Functions: Avg, Count, Max, Min, • The various expenses, for comparison
Sum. purposes, could be depicted in the form of
bar diagrams and pie charts.
(ii) DBMS in Business Application. • Calculate relevant accounting ratios like
Database design, tables, fields, liquidity, solvency, activity and profitability
relationships, forms reports and indexing. giving their formulae and computation
(all this could be part of the viva-voce).
The following examples of DBMS in • The ratios could also be shown graphically
business application: and/ or pictorially (bar diagrams and pie
charts) and if possible, could be compared
• Accounting Information with the ratios of the industry.
• Debtors and Creditors
2. Preparation of a Cash Flow Statement with the
• Bank Reconciliation Statement help of audited / unaudited / imaginary Balance
• Asset Accounting Sheets of a company for two consecutive
accounting years or two consecutive quarters of
an accounting year could be taken along with at
least five additional information (depreciation,
PAPER II – PROJECT WORK – 20 Marks purchase/ sale of fixed assets, dividend paid/
Candidates will be expected to have completed two proposed, tax paid/ proposed, amortization of
projects from any topic covered in Theory. intangible assets, profit or loss on sale of fixed
assets including provision for depreciation on
The project work will be assessed by the teacher them and profit or loss on sale of investment).
and a Visiting Examiner appointed locally and
approved by the Council. • The results of the operating, investing and
financing activities could be shown
Mark allocation for each Project [10 marks]: graphically and/ or pictorially (bar diagrams
Overall format 1 mark and pie charts).
Content 4 marks 3. Preparation of Common Size and Comparative
Income Statement and Balance Sheet of a
Findings 2 marks company by taking into account its audited,
Viva-voce based on the Project only 3 marks unaudited / imaginary financial results of two
consecutive quarters of an accounting year or of
A list of suggested Projects is given below: two consecutive accounting years.
• The comparison has to be made in the form
1. Preparation of Journal / sub-division of journal, of Common Size and Comparative Income
Ledger, Trial balance and Financial Statements
of a partnership form of business on the basis of Statement and Balance Sheet.
a case study. • The comparison could also be shown
• Develop a case study showing how two or graphically and/ or pictorially (bar diagrams
more friends decide to come together and and pie charts).
start a business with a certain amount of
capital. 4. Taking the audited/ unaudited / imaginary
• Prepare their Partnership Deed including financial results of any leading company, its
interest on capital, partner’s salary, liquidity, solvency, activity and profitability
commission, interest on drawings, interest ratios of two consecutive accounting years or of
on partner’s loan and rent paid to a partner. two consecutive quarters of an accounting year
• Write in detail, their transactions during the should be calculated and the comparison of the
year: purchases - cash and credit, sales - ratios of both the years or quarters should be
cash and credit, expenses, purchase of fixed shown graphically and/ or pictorially (bar
assets and depreciation charged on them, diagrams and pie charts).
any outstanding expenses, prepaid
expenses, accrued income, drawing bills of 5. Employee Salary Sheet:
exchange, accepting bills payable etc. (i) Design a spreadsheet using the following
• From this case study developed (which fields:
should have at least 15 transactions), pass
the journal entries, post them into the Employee’s Name: String Variable of
ledger, prepare a Trial Balance and the maximum size of 40 characters
Trading and Profit and Loss Account, Profit Date of Joining: Date in English U.K.
and Loss Appropriation Account and format
Balance Sheet.
118
 Basic Salary: upto 2 places after decimal (i) Revenue (Hard Cover Books and Soft
Cover Books)
Calculate their net salary using the
Employee’s data. [Feed in random data for (ii) Total Revenue
20 to 25 employees]
(iii) Commission (Hard Cover Books and Soft
Some of the instructions are given below: Cover Books)
Important Instructions: (iv) Total Commission
Dearness Allowance (DA) is paid @ 45% (v) Create a Chart (any style) showing the
of Basic Salary. above information.
House Rent Allowance (HRA) is paid @ Open the original page (with lines and shading)
15% of (Basic Salary + DA) as well as a formula page. (The entire formula
must been shown)
City Compensatory Allowance (CCA) is
paid @ 8.3% of (Basic Salary + DA + Use “=round (.0)” where applicable so that all
HRA) columns add correctly.
Provident Fund (PF) is deducted @ 12% of 7. Spreadsheet on Outstanding Report
(Basic Salary + DA)
Prepare and Present a Spreadsheet for a list of
Income Tax (IT) is deducted @ 10% of outstanding notes receivable each month. The
(Basic Salary + DA + HRA + CCA) information for a particular month is as follows:
Net Salary is summation of Basic Salary + Use the following financial information:
DA + HRA + CCA less PF and IT
Face Interest Other details
(ii) Save your worksheet on the desktop as Value Rate
Employee_Salary.
0 10.8% Late Penalty: 11%
(iii) Print a Hard Copy of your work and close
the file. 500 9.2% Report date: July 30,
2011
6. Revenue and Commission Statement
1000 8.96% Days / Year: 365
Prepare a Spreadsheet for a certain Company,
which pays a commission based upon books
sold. Note Face Period
Issue Date
Prepare a revenue and commission statement Number Value Days
based upon the following information: 1 Rs. 525 90 7/2/2011
Number of Number of 2 Rs. 612 60 14/3/2011
Name of
Soft Cover Hard Cover
Salesperson 3 Rs. 210 45 19/5/2011
Books sold Books sold
Suresh Mehta 1546 360 4 Rs. 800 120 10/6/2011
Gladstone David 1788 315 5 Rs. 1469 30 24/6/2011
Manish Arora 1340 294 Show the Interest rate, Days outstanding,
Interest earned, Late penalty and Total due.
Manmeet Singh 990 450
Use appropriate Lines and Shading to make the
Vineet Saighal 1105 689 report interesting and easy to read. Use two
Assumption: places after the decimals where appropriate.
Price of Hard Cover Books: @Rs. 34.45 per Prepare a chart to show the above information.
Book
Price of Soft Cover Books: @ Rs. 22.05 per 8. Database Management
Book (i) Create a Database with at least 10 records
Commission on Hard Cover Books: 9.0% with each record having the following
Commission on Soft Cover Books: 12% fields:
Prepare a spreadsheet showing your calculation Employees Details: PAN Number, Name,
to determine: Address and Phone Number
(ii) Sort the names in alphabetical order.
119
 (iii) The Employee database has another table 10. Selection Grade Card
called Loan Details that stores the details of
(i) Make a Spreadsheet of a Selection Grading
loan taken by various employees. Create a
Chart using the following details:
query that gives a list of employees names
along with loan details. Candidate’s Name: String
The loan details table has following fields: type
Loan Amount, Loan Date, Interest Rate, Test 1: Integer
Amount Paid and Amount Balance. type
(iv) Create a Report as per the format given Test 2: Integer
below: type
Test 3: Integer
type
Employee Loan Details:
Test 4: Integer
Emp. Emp. Loan Loan Amount Balance type
No. Name Amount Date Paid Amount
Decide tables, relationships etc. on your own.
The Worksheet format is as follows:
9. Database Management:
Test- Test- Test- Test-
(i) Create an Accounts Table by following the
steps given below: Name of 1 2 3 4
S.N. the (Max (Max (Max (Max
(a) Click on the new button and highlight
Design View in the dialog box that Candidate 25 25 25 25
appears. Mks) Mks) Mks) Mks)
(b) Click the OK button and the Table Alfred
Design View will appear. 1 24 22 18 23
Gomes
(c) Fill in the Field Name, Data Type and Shankar
Description for each column/field in the 2 17 20 17 20
Pandey
Account Table.
Ali
Field Name Data Description
3 Hassan 22 19 20 14
Type
Raza
CustomerID Number The Unique Identifier
for a Customer P. Subba
4 20 19 19 17
Rao
AccountNo Number The Unique Identifier
for a Bank Account Sushanto
5 19 21 24 22
Mukerjee
AccountType Text The type of account
(Checking, Saving etc.) (ii) Compute the percentage for each
candidate’s total. Show the total score and
DateOpened Date The date the account the percentage for each candidate.
was opened
(iii) Create a Header for the Chart. Include your
Balance Number The current balance name.
(money) in this account.
(iv) Save your work on the desktop as
(ii) Define a Primary Key for the Accounts Merit_Project.
table. Click on the Account Number field
with the right mouse button and choose (v) Print a hard copy of your work and close
Primary Key from the pop-up menu. the file.
(iii) Save the new Accounts Table.
NOTE: No question paper for Practical work
will be set by the Council.

120
 *EXPLANATION AND PRESENTATION OF ITEMS UNDER SHAREHOLDERS’ FUNDS
Share Capital

Particulars Note No. Figures at the end of the current Figures at the end of the previous
reporting period reporting period
1 2 3 4
I. EQUITY AND LIABILITIES
1. Shareholders Funds
(a) Share Capital 1 xxx

Notes to Accounts: 1.
Particulars Amount (`)
(a) Share Capital
Authorised Capital
...... shares of `..... each xxx

Issued Capital
..... shares of `..... each xxx
(of the above shares…..shares are allotted as fully paid up pursuant to a contract without payment being received in cash)
Subscribed Capital
Subscribed and fully paid up xxx
..... shares of `.... each
(of the above shares…..shares are allotted as fully paid up pursuant to a contract without payment being received in cash) xxx
Subscribed but not fully paid up
..... shares of `.... each, .... ` Called up x x x
Less calls –in- arrear (xx)
Add Shares Forfeited A/c x

TOTAL xxx
Points to be noted:
 Equity share capital and preference share capital to be shown separately.
If the authorised/issued capital is not mentioned in the question it has to be shown in the notes to accounts. However, no figures will be shown as illustrated above.

121
 **FORMAT OF THE BALANCE SHEET OF A JOINT STOCK COMPANY
PART-1
BALANCE SHEET
Name of the Company....................
Balance Sheet as at.........................
(Rupees in ................)
Particulars Note No. Figures at the end of the current reporting period Figures at the end of the previous reporting period
1. 2 3 4.
I. EQUITY AND LIABILITIES
1. Shareholders Funds
(a) Share Capital
(b) Reserves and Surplus
(c) Money received against share warrants
2. Share application money pending allotment
3. Non- Current Liabilities
(a) Long- term borrowings
(b) Deferred tax liabilities (Net)
(c) Other Long term liabilities
(d) Long-term provisions
4. Current Liabilities
(a) Short term borrowings
(b) Trade payables
(c) Other current liabilities
(d) Short term provisions
TOTAL
II. ASSETS
1. Non- Current Assets
(a) Fixed Assets
(i) Tangible Assets
(ii) Intangible Assets
(iii) Capital work-in-progress
(iv) Intangible assets under development
(b) Non-current Investments
(c) Deferred Tax Assets (Net)
(d) Long term loans and advances
(e) Other non-current assets
2. Current Assets
(a) Current Investments
(b) Inventories
(c) Trade Receivables
(d) Cash and Bank Balance
(e) Short-term loans and advances
(f) Other current assets
TOTAL
122
 SAMPLE TABLE FOR PRACTICAL WORK
S. No. Unique PROJECT 1 PROJECT 2 TOTAL
Identification MARKS
Number A B C D E F G H I J
(Unique ID) of Teacher Visiting Average Viva-Voce Total Marks Teacher Visiting Average Viva-Voce Total Marks (E + J)
the candidate Examiner Marks by Visiting (C + D) Examiner Marks by (H + I)
(A + B ÷ 2) Examiner (F + G ÷ 2) Visiting
Examiner
7 Marks* 7 Marks* 7 Marks 3 Marks 10 Marks 7 Marks* 7 Marks* 7 Marks 3 Marks 10 Marks 20 Marks
1

10

*Breakup of 7 Marks to be awarded separately by the

Name of Teacher:
Teacher and the Visiting Examiner is as follows:
Signature: Date
Overall Format 1 Mark
Content 4 Marks Name of Visiting Examiner
Findings 2 Marks
Signature: Date
NOTE: VIVA-VOCE (3 Marks) for each Project is to be conducted only by the Visiting Examiner, and should be based on the Project only.
123