ACCOUNTS (858)

Aims:

1. To provide an understanding of the principles of accounts and practice in recording transactions and interpreting individual as well as company accounts.
2. To develop an understanding of the form and classification of financial statements as a means of communicating financial information.

CLASS XI

There will be one paper of 3 hours duration of 100 marks divided into two parts.
Part I (30 marks) will consist of compulsory short answer questions, testing knowledge, application and skills relating to elementary/ fundamental aspects of the entire syllabus.
Part II (70 marks) will consist of seven questions. Question 2 shall be compulsory and shall carry 22 marks. Candidates will be required to answer four other questions from the remaining six questions, each of which shall carry 12 marks. A total of five questions are to be answered in this part.

1. Basic Accounting Concepts
Background of accounting and accountancy: knowledge and understanding of accounting concepts - matching entity accounting, cost concept; basis of accounting - objectives and necessity; accounts - types and classification; basic terms - capital income and expenditure, expenses, assets, liabilities; assignment and application to problems.

2. Journal and Ledger
(i) Journal accounting concept: recording of entries in journal with narration.
(ii) Double entry system.
(iii) Ledger: posting from journal to respective ledger.

3. Cash Book and Bank Reconciliation Statement
(i) Cash book (including petty cash book): single
column; double column; triple column, (ii) Application of cash book.
(iii) Bank reconciliation statement.
(iv) Application of bank reconciliation statement with amended cashbook. Trial Balance, Rectification, Capital and Revenue Expenditure/Income
(i) Trial balance with needs and limitations, (ii) Application of trial balance.
(iii) Errors and types of errors: errors of omission; errors of commission; errors of principles.
(iv) Rectification with suspense a/c. Depreciation, Reserve for Bad Debts and Provision for Discounts
(i) Depreciation needs and objectives.
(ii) Methods of charging depreciation (straight line and WDV method).
(iii) Application of depreciation with the above mentioned methods: problems with purchase and sale of assets; current, prospective and retrospective changing of method.
(iv) Bad debts, reserve for bad debts, reserve for discount on debtors and reserve for discount on creditors.
(v) Applications of reserve for bad debts and reserve for discount on debtors; treatment in Profit and Loss a/c and Balance Sheet.
Final Accounts and Manufacturing Accounts (i) Concept of adjustment.
(ii) Application of trading account i.e. to find out the gross profit.
(iii) Application of profit and loss account i.e. to find out the net profit.
(iv) Marshalling of a Balance Sheet: Order of liquidity and order of permanence.
(v) Application with Final Accounts problems.

CLASS XII

(vi) Concept of Manufacturing Accounts, (vii) Application of Manufacturing Accounts.

7. Averages Due Date and Bills of Exchange
(i) Average due date and its application.
(ii) Introduction of Bills of Exchange: explanation of basic terms - drawer, drawee, days of grace, date of drawing, etc.
(iii) Application to practical problems/exercises.

8. Single Entry System
(i) Single entry and difference with double entry.
(ii) Ascertainment of profit/loss by statement of affairs method.
(iii) Application to Problems. (iv)Conversion into double entry system, (v) Application under conversion method.

9. Non Trading Organisation
(i) Non trading organization: objectives and necessity.
(ii) Different books maintained and differences between them.
(iii) Application of non-trading exercises involving: preparation of final accounts; receipts and payments accounts; opening and closing balance sheet.
There will be one paper of 3 hours duration of 100 marks divided into two parts.

Part I (30 marks) will consist of compulsory short answer questions, testing knowledge, application and skills relating to elementary/fundamental aspects of the entire syllabus.

Part II (70 marks) will have seven questions. Question 2 shall be compulsory and shall carry 22 marks. Candidates will be required to answer four other questions from the remaining six questions, each of which shall carry 12 marks. A total of five questions are to be answered in this part.

1. Concept of Cost Sheet and Stock
(i) Concept of cost sheet, (ii) Application of cost sheet.
(iii) Concept of store ledger: L.I.F.O.; F.I.F.O.(periodic & perpetual system) -advantages & disadvantages.
(iv) Application of stock valuation under two methods.
(v) Preparation Statement. of a Stock Reconciliation

2. Consignment and Joint Venture
(i) Needs and objectives.
(ii) Different commissions and their objectives.
(iii) Applications of consignment problems in two parties' books at cost and invoice procedure as also treatment of bad debts with two commissions including treatment of stock goods lost in transit.
(iv) Joint Venture: objectives; necessity and methods of accounting (recording of transactions in the books of one joint venturer, recording of transactions in the books of all joint venturers, recording of transactions in separate set of books).
(vi) Applications of Joint Venture problems under the three different methods mentioned above [excluding conversion of consignment to Joint Venture].

3. Self Balancing and Sectional Balancing System
(i) Meaning of self balancing and application of the system in solving practical problems.
(ii) Meaning of sectional balancing and application of the system in solving practical problems.

4. Partnership Accounts
(i) Partnership: objectives; necessity with or without agreement, (ii) Partnership capitals: types - fixed and fluctuating, benefits and deductions and treatment including divisible profits, (iii) Application of profit and loss appropriation account together with capital and current accounts, (iv) Admission: goodwill - concept and mode of valuation, (v) Application of treatment of goodwill on admission of a partner, (vi) Application of revaluation accounts under different goodwill conditions, (vii) Application of treatment of capital adjustments on change of ratio, (viii) Goodwill on retirement and death of a partner, (ix) Application of revaluation accounts on retirement and death of a partner and construction of loan account and adjustment of capital as per new ratio, (x) Dissolution: reasons under partnership accounts.
Note: Admission cum retirement and amalgamation of firms and conversion/sale to a company are however excluded from the present syllabus together with piecemeal distribution.

5. Joint Stock Company Accounts
(i) Nature of shares and debentures: issue of shares at par; at a premium or at a discount under Companies Act.
(ii) Application of problems on issue of shares including calls in arrears; calls in advance; forfeiture and reissue.
(iii) Application of problems on issue of debentures - at par, at discount, at premium, for considerations other than cash, as collateral security.
(iv) Application of Schedule VI of Companies Act including Profit and Loss appropriation a/c of companies.

6. Financial Statements and Ratio Analysis
(i) Application of financial statement including: statement of working capital; fund flow statement and cash flow statement.
(ii) Application of ratio analysis including calculations of various ratios (excluding interpretation, analysis, comparisons, conclusions and the preparation of trading, profit and loss account and balance sheet).