Accountancy XI-XII

Conduct of Classes

● On board explanation with notes
● Make Concept clear with practical examples
● Interactive class sessions
● Home work / Assignment at the end of the class
● Home work / Assignment check in the next class
● Quick recap of previous class in the next class
● Two tests per month/subject on Saturdays
● Class duration 1 Hr/sub alternate days (3Hrs./wk)
● Extra classes provided when needed

Classes Schedule 2024-25

Science Students Class XI-XII

Note: Class Tests will be conducted on Saturday in extra hours

Syllabus & Marks Weightage [ Class-XI ]

Syllabus & Marks Weightage [ Class-XII ]

PART A: FINANCIAL ACCOUNTING - I

Unit-1: Theoretical Frame Work
Introduction to Accounting
• Accounting- concept, meaning, as a source of information, objectives, advantages and limitations, types of accounting information; users of accounting information and their needs. Qualitative Characteristics of Accounting Information. Role of Accounting in Business.
• Basic Accounting Terms- Entity, Business Transaction, Capital, Drawings. Liabilities (Non Current and Current). Assets (Non Current, Current); Expenditure (Capital and Revenue), Expense, Revenue, Income, Profit, Gain, Loss, Purchase, Sales, Goods, Stock, Debtor, Creditor, Voucher, Discount (Trade discount and Cash Discount)

Theory Base of Accounting
• Fundamental accounting assumptions: GAAP: Concept
• Basic Accounting Concept : Business Entity, Money Measurement, Going Concern, Accounting Period, Cost Concept, Dual Aspect, Revenue Recognition, Matching, Full Disclosure, Consistency, Conservatism,
• Materiality and Objectivity
• System of Accounting. Basis of Accounting: cash basis and accrual basis
• Accounting Standards: Applicability of Accounting Standards (AS) and Indian Accounting Standards (IndAS)
• Goods and Services Tax (GST): Characteristics and Advantages.

After going through this Unit, the students will be able to:
• describe the meaning, significance, objectives, advantages and limitations of accounting in the modem economic environment with varied types of business and non-business economic entities.
• identify / recognise the individual(s) and entities that use accounting information for serving their needs of decision making.
• explain the various terms used in accounting and differentiate between different related terms like current and non-current, capital and revenue.
• give examples of terms like business transaction, liabilities, assets, expenditure and purchases.
• explain that sales/purchases include both cash and credit sales/purchases relating to the accounting year.
• differentiate among income, profits and gains.
• state the meaning of fundamental accounting assumptions and their relevance in accounting.
• describe the meaning of accounting assumptions and the situation in which an assumption is applied during the accounting process.
• explain the meaning, applicability, objectives, advantages and limitations of accounting standards.
• appreciate that various accounting standards developed nationally and globally are in practice for bringing parity in the accounting treatment of different items.
• acknowledge the fact that recording of accounting transactions follows double entry system.
• explain the bases of recording accounting transaction and to appreciate that accrual basis is a better basis for depicting the correct financial position of an enterprise.
• Explain the meaning, advantages and characteristic of GST.

Unit-2: Accounting Process
Recording of Business Transactions
• Voucher and Transactions: Source documents and Vouchers, Preparation of Vouchers, Accounting Equation Approach: Meaning and Analysis, Rules of Debit and Credit.
• Recording of Transactions: Books of Original Entry- Journal
• Special Purpose books:
• Cash Book: Simple, cash book with bank column and petty cashbook
• Purchases book
• Sales book
• Purchases return book
• Sales return book
• Journal proper

Note: Including trade discount, freight and cartage expenses for simple GST calculation.
• Ledger: Format, Posting from journal and subsidiary books, Balancing of accounts

Bank Reconciliation Statement:
• Need and preparation, Bank Reconciliation Statement

Depreciation, Provisions and Reserves
• Depreciation: Meaning, Features, Need, Causes, factors
• Other similar terms: Depletion and Amortisation
• Methods of Depreciation:
i. Straight Line Method (SLM)
ii. Written Down Value Method (WDV)

Note: Excluding change of method
• Difference between SLM and WDV; Advantages of SLM and WDV
• Method of recoding depreciation
i. Charging to asset account
ii. Creating provision for depreciation/accumulated depreciation account
• Treatment of disposal of asset
• Provisions, Reserves, Difference Between Provisions and Reserves.
• Types of Reserves:
i. Revenue reserve
ii. Capital reserve
iii. General reserve
iv. Specific reserve
v. Secret Reserve
• Difference between capital and revenue reserve

Trial balance and Rectification of Errors
• Trial balance: objectives, meaning and preparation
(Scope: Trial balance with balance method only)
• Errors: classification-errors of omission, commission, principles, and compensating; their effect on Trial Balance.
• Detection and rectification of errors;
(i) Errors which do not affect trial balance
(ii) Errors which affect trial balance
• preparation of suspense account.

After going through this Unit, the students will be able to:
• explain the concept of accounting equation and appreciate that every transaction affects either both the sides of the equation or a positive effect on one item and a negative effect on another item on the same side of accounting equation.
• explain the effect of a transaction (increase or decrease) on the assets, liabilities, capital, revenue and expenses.
• appreciate that on the basis of source documents, accounting vouchers are prepared for recording transaction in the books of accounts.
• develop the understanding of recording of transactions in journal and the skill of calculating GST.
• explain the purpose of maintaining a Cash Book and develop the skill of preparing the format of different types of cash books and the method of recording cash transactions in Cash book.
• describe the method of recording transactions other than cash transactions as per their nature in different subsidiary books .
• appreciate that at times bank balance as indicated by cash book is different from the bank balance as shown by the pass book / bank statement and to reconcile both the balances, bank reconciliation statement is prepared.
• develop understanding of preparing bank reconciliation statement.
• appreciate that for ascertaining the position of individual accounts, transactions are posted from subsidiary books and journal proper into the concerned accounts in the ledger and develop the skill of ledger posting.
• explain the necessity of providing depreciation and develop the skill of using different methods for computing depreciation.
• understand the accounting treatment of providing depreciation directly to the concerned asset account or by creating provision for depreciation account.
• appreciate the method of asset disposal through the concerned asset account or by preparing asset disposal account.
•appreciate the need for creating reserves and also making provisions for events which may belong to the current year but may happen in next year.
• appreciate the difference between reserve and reserve fund.
• state the need and objectives of preparing trial balance and develop the skill of preparing trial balance.
• appreciate that errors may be committed during the process of accounting.
• understand the meaning of different types of errors and their effect on trial balance.
• develop the skill of identification and location of errors and their rectification and preparation of suspense account.

Part B: Financial Accounting - II

Unit 3: Financial Statements of Sole Proprietorship
Financial Statements

Meaning, objectives and importance; Revenue and Capital Receipts; Revenue and Capital Expenditure; Deferred Revenue expenditure. Opening journal entry. Trading and Profit and Loss Account: Gross Profit, Operating profit and Net profit. Preparation.

Balance Sheet: need, grouping and marshalling of assets and liabilities. Preparation. Adjustments in preparation of financial statements with respect to closing stock, outstanding expenses, prepaid expenses, accrued income, income received in advance, depreciation, bad debts, provision for doubtful debts, provision for discount on debtors, Abnormal loss, Goods taken for personal use/staff welfare, interest on capital and managers commission. Preparation of Trading and Profit and Loss account and Balance Sheet of a sole proprietorship with adjustments.

After going through this Unit, the students will be able to:
• state the meaning of financial statements the
• purpose of preparing financial statements.
• state the meaning of gross profit, operating profit and net profit and develop the skill of preparing trading and profit and loss account.
• explain the need for preparing balance sheet.
• understand the technique of grouping and marshalling of assets and liabilities.
• appreciate that there may be certain items other than those shown in trial balance which may need adjustments while preparing financial statements.
• develop the understanding and skill to do adjustments for items and their presentation in financial statements like depreciation, closing stock, provisions, abnormal loss etc.
• develop the skill of preparation of trading and profit and loss account and balance sheet.

Incomplete Records
Features, reasons and limitations.
Ascertainment of Profit/Loss by Statement of Affairs method. (excluding conversion method)

Detailed Syllabus [ Class-XI ]

Detailed Syllabus [ Class-XII ]

Part A: Accounting for Partnership Firms and Companies

Unit 1: Accounting for Partnership Firms

• Partnership: features, Partnership Deed.
• Provisions of the Indian Partnership Act 1932 in the absence of partnership deed.
• Fixed v/s fluctuating capital accounts. Preparation of Profit and Loss Appropriation account- division of profit among partners, guarantee of profits.
• Past adjustments (relating to interest on capital, interest on drawing, salary and profit sharing ratio).
• Goodwill: meaning, nature, factors affecting and methods of valuation - average profit, super profit and capitalization.

Note:
Interest on partner's loan is to be treated as a charge against profits.

Goodwill: meaning, factors affecting, need for valuation, methods for calculation (average profits, super profits and capitalization), adjusted through partners capital/ current account.

Accounting for Partnership firms - Reconstitution and Dissolution.
• Change in the Profit Sharing Ratio among the existing partners - sacrificing ratio, gaining ratio, accounting for revaluation of assets and reassessment of liabilities and treatment of reserves, accumulated profits and losses. Preparation of revaluation account and balance sheet.
• Admission of a partner - effect of admission of a partner on change in the profit sharing ratio, treatment of goodwill (as per AS 26), treatment for revaluation of assets and re- assessment of liabilities, treatment of reserves, accumulated profits and losses, adjustment of capital accounts and preparation of capital, current account and balance sheet.
• Retirement and death of a partner: effect of retirement / death of a partner on change in profit sharing ratio, treatment of goodwill (as per AS 26), treatment for revaluation of assets and reassessment of liabilities, adjustment of accumulated profits, losses and reserves, adjustment of capital accounts and preparation of capital, current account and balance sheet. Preparation of loan account of the retiring partner.
• Calculation of deceased partner’s share of profit till the date of death. Preparation of deceased partner’s capital account and his executor’s account.
• Dissolution of a partnership firm: meaning of dissolution of partnership and partnership firm, types of dissolution of a firm. Settlement of accounts - preparation of realization account, and other related accounts: capital accounts of partners and cash/bank a/c (excluding piecemeal distribution, sale to a company and insolvency of partner(s)).

Note:
(i) If the realized value of tangible assets is not given it should be considered as realized at book value itself.
(ii) If the realized value of intangible assets is not given it should be considered as nil (zero value).
(ii) In case, the realization expenses are borne by a partner, clear indication should be given regarding the payment thereof.

After going through this Unit, the students will be able to:
• state the meaning of partnership, partnership firm and partnership deed.
• describe the characteristic features of partnership and the contents of partnership deed.
• discuss the significance of provision of Partnership Act in the absence of partnership deed.
• differentiate between fixed and fluctuating capital, outline the process and develop the understanding and skill of preparation of Profit and Loss Appropriation Account.
• develop the understanding and skill of preparation profit and loss appropriation account involving guarantee of profits.
• develop the understanding and skill of making past adjustments.
• state the meaning, nature and factors affecting goodwill
• develop the understanding and skill of valuation of goodwill using different methods.
• state the meaning of sacrificing ratio, gaining ratio and the change in profit sharing ratio among existing partners.
• develop the understanding of accounting treatment of revaluation assets and reassessment of liabilities and treatment of reserves and accumulated profits by preparing revaluation account and balance sheet.
• explain the effect of change in profit sharing ratio on admission of a new partner.
• develop the understanding and skill of treatment of goodwill as per AS-26, treatment of revaluation of assets and re-assessment of liabilities, treatment of reserves and accumulated profits, adjustment of capital accounts and preparation of capital, current account and balance sheet of the new firm.
• explain the effect of retirement / death of a partner on change in profit sharing ratio.
• develop the understanding of accounting treatment of goodwill, revaluation of assets and re-assessment of liabilities and adjustment of accumulated profits, losses and reserves on retirement / death of a partner and capital adjustment.
• develop the skill of calculation of deceased partner's share till the time of his death and prepare deceased partner's and executor's account.
• discuss the preparation of the capital accounts of the remaining partners and the balance sheet of the firm after retirement / death of a partner.
• understand the situations under which a partnership firm can be dissolved.
• develop the understanding of preparation of realization account and other related accounts.

Unit-2 Accounting for Companies

Accounting for Share Capital
• Features and types of companies.
• Share and share capital: nature and types.
• Accounting for share capital: issue and allotment of equity and preferences shares. Public subscription of shares - over subscription and under subscription of shares; issue at par and at premium, calls in advance and arrears (excluding interest), issue of shares for consideration other than cash.
• Concept of Private Placement and Employee Stock Option Plan (ESOP), Sweat Equity.
• Accounting treatment of forfeiture and re-issue of shares.
• Disclosure of share capital in the Balance Sheet of a company.

Accounting for Debentures
• Debentures: Meaning, types, Issue of debentures at par, at a premium and at a discount. Issue of debentures for consideration other than cash; Issue of debentures with terms of redemption; debentures as collateral security-concept, interest on debentures (concept of TDS is excluded). Writing off discount / loss on issue of debentures.

Note:
Discount or loss on issue of debentures to be written off in the year debentures are allotted from Security Premium Reserve (if it exists) and then from Statement of Profit and Loss as Financial Cost (AS 16)

After going through this Unit, the students will be able to:
• state the meaning of share and share capital and differentiate between equity shares and preference shares and different types of share capital.
• understand the meaning of private placement of shares and Employee Stock Option Plan.
• explain the accounting treatment of share capital transactions regarding issue of shares.
• develop the understanding of accounting treatment of forfeiture and re-issue of forfeited shares.
• describe the presentation of share capital in the balance sheet of the company as per schedule III part I of the Companies Act 2013.
• explain the accounting treatment of different categories of transactions related to issue of debentures.
• develop the understanding and skill of writing of discount / loss on issue of debentures.
• understand the concept of collateral security and its presentation in balance sheet.
• develop the skill of calculating interest on debentures and its accounting treatment.
• state the meaning of redemption of debentures.

Part B: Financial Statement Analysis

Unit 3: Analysis of Financial Statements

Financial statements of a Company:
Meaning, Nature, Uses and importance of financial Statement.
Statement of Profit and Loss and Balance Sheet in prescribed form with major headings and sub headings (as per Schedule III to the Companies Act, 2013)

Note:
Exceptional items, extraordinary items and profit (loss) from discontinued operations are excluded.

• Financial Statement Analysis: Meaning, Significance Objectives, importance and limitations.
• Tools for Financial Statement Analysis: Comparative statements, common size statements, Ratio analysis, Cash flow analysis.
• Accounting Ratios: Meaning, Objectives, Advantages, classification and computation.
• Liquidity Ratios: Current ratio and Quick ratio.
• Solvency Ratios: Debt to Equity Ratio, Total Asset to Debt Ratio, Proprietary Ratio and Interest Coverage Ratio. Debt to Capital Employed Ratio.
• Activity Ratios: Inventory Turnover Ratio, Trade Receivables Turnover Ratio, Trade Payables Turnover Ratio, Fixed Asset Turnover Ratio, Net Asset Turnover Ratio and Working Capital Turnover Ratio.
• Profitability Ratios: Gross Profit Ratio, Operating Ratio, Operating Profit Ratio, Net Profit Ratio and Return on Investment.

After going through this Unit, the students will be able to:
• develop the understanding of major headings and sub-headings (as per Schedule III to the Companies Act, 2013) of balance sheet as per the prescribed norms / formats.
• state the meaning, objectives and limitations of financial statement analysis.
• discuss the meaning of different tools of 'financial statements analysis'.
• develop the skill of preparation of preparation of comparative and common size statement, understand their uses and difference between the two.
• state the meaning, objectives and significance of different types of ratios.
• develop the understanding of computation of current ratio and quick ratio.
• develop the skill of computation of debt equity ratio, total asset to debt ratio, proprietary ratio and interest coverage ratio.
• develop the skill of computation of inventory turnover ratio, trade receivables and trade payables ratio and working capital turnover ratio and others.
• develop the skill of computation of gross profit ratio, operating ratio, operating profit ratio, net profit ratio and return on investment.

Note:
Net Profit Ratio is to be calculated on the basis of profit before and after tax.

Unit 4: Cash Flow Statement

•Meaning, objectives Benefits, Cash and Cash Equivalents, Classification of Activities and preparation (as per AS 3 (Revised) (Indirect Method only)

Note:
(i) Adjustments relating to depreciation and amortization, profit or loss on sale of assets including investments, dividend (both final and interim) and tax.
(ii) Bank overdraft and cash credit to be treated as short term borrowings.
(iii) Current Investments to be taken as Marketable securities unless otherwise specified.

After going through this Unit, the students will be able to:
• state the meaning and objectives of cash flow statement.
• develop the understanding of preparation of Cash Flow Statement using indirect method as per AS 3 with given adjustments

Note:
Previous years’ Proposed Dividend to be given effect, as prescribed in AS-4, Events occurring after the Balance Sheet date. Current years’ Proposed Dividend will be accounted for in the next year after it is declared by the shareholders. Previous years’ Proposed Dividend to be given effect, as prescribed in AS-4, Events occurring after the Balance Sheet date. Current years’ Proposed Dividend will be accounted for in the next year after it is declared by the shareholders.