Accountancy (Code No. 055)

Class-XII (2017-18)

One Paper                                                                                    Theory: 80 Marks
                                                                                                               3 Hours

Units   Marks
Part A  Financial Accounting-1  
  Unit-1: Accounting for Partnership Firms 35
  Unit-2: Accounting for Companies  25
Part B Financial Accounting-II  
  Unit-3: Analysis of Financial Statements 12
  Unit-4: Cash Flow Statement  8
Part C Project Work 20
  Project work will include:  
  Project File 4 Marks  
  Written Test 12 Marks (One Hour)  
  Viva Voice 4 Marks  
OR  
Part B Computerized Accounting  
 

Unit 3. Computerized Accounting 

20
Part C 

Project work

 
  Project work will include: 20
  Practical File 4 Marks  
  Practical Examination  12 Marks (One Hour)  
  Viva Voice 4 Marks  

 

Part A: Accounting for Partnership Firms and Companies                                       60 Marks 150 Periods

Unit 1: Accounting for Partnership Firms                                                                   90 periods

Units/Topics Learning Outcomes
  • 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: 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.

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 and accumulated profits. 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 reassessment of liabilities, treatment of reserves and accumulated profits, adjustment of capital
    accounts and preparation of 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 and reserves, adjustment of capital accounts and preparation of 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:

  1. The realized value of each asset must be given at the time of dissolution.
  2. 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 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 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 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 realisation account and other related accounts.

Unit-2 Accounting for Companies

Units/Topics Learning Outcomes

Accounting for Share Capital

  • Share and share capital: nature and types.
  • Accounting for share capital: issue and allotment of equity 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).
  • Accounting treatment of forfeiture and re-issue of shares.
  • Disclosure of share capital in the Balance Sheet of a company.

Accounting for Debentures

  • Debentures: 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. Writing off discount / loss on issue of debentures.
  • Redemption of debentures for immediate cancellation: Lump sum, draw of lots, purchase in the open market (excluding ex-interest and cum-interest) and conversion of existing debentures into new debentures or shares. Creation of Debenture Redemption Reserve.
  • Conversion method.

Note: Related sections of the Companies Act, 2013 will apply.

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.
  • develop the understanding of accounting treatment of transactions related to redemption of debentures by lump sum, draw
    of lots, purchase in open market and conversion method.

Part B: Financial Statement Analysis                                                                                         20 Marks

Unit 3: Analysis of Financial Statements                                                                                30 Periods

   
  • Financial statements of a company:
    Statement of Profit and Loss and Balance Sheet in the 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: Objectives, importance and limitations.
  • Tools for Financial Statement Analysis: Comparative statements, common size
    statements, cash flow analysis, ratio analysis.
  • Accounting Ratios: Objectives, 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.

 

Activity Ratios: Inventory Turnover Ratio, Trade Receivables Turnover Ratio, Trade Payable 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 understanding and skill of preparation of comparative and common size financial statements.
  • 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.
  • 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 profit before and after tax.

Unit 4: Cash Flow Statement

   

Meaning, objectives and preparation (as per AS 3 (Revised) (Indirect Method only)

Note:

  1. Adjustments relating to depreciation and amortization, profit or loss on sale of assets including investments, dividend (both final and interim) and tax.
  2. Bank overdraft and cash credit to be treated as short term borrowings.
  3. 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.

Project Work                                                                                                               20 Marks 40 Periods

Note: Kindly refer to the Guidelines published by the CBSE.

OR

Part B: Computerised Accounting                                                                         20 Marks 50 Periods

 

Unit 3: Computerised Accounting

Overview of Computerised Accounting System.

  • Introduction: Application in Accounting.
  • Features of Computerised Accounting System.
  • Structure of CAS.
  • Software Packages: Generic; Specific; Tailored.

Accounting Application of Electronic Spreadsheet.

Concept of electronic spreadsheet.

Features offered by electronic spreadsheet.

Application in generating accounting information - bank reconciliation statement; asset accounting; loan

repayment of loan schedule, ratio analysis

Data representation- graphs, charts and diagrams.

 

Using Computerized Accounting System.

Steps in installation of CAS, codification and Hierarchy of account heads, creation of accounts.

Data: Entry, validation and verification.

Adjusting entries, preparation of balance sheet, profit and loss account with closing entries and opening entries. Need and security features of the system.

 

Database Management System (DBMS)

Concept and Features of DBMS.

DBMS in Business Application.

Generating Accounting Information - Payroll.

 

Part C: Practical Work                                                                             20 Marks 26 Periods

Please refer to the guidelines published by CBSE.

Prescribed Books:

Financial Accounting -I                        Class XI                    NCERT Publication
Accountancy -II                                   Class XI                    NCERT Publication
Accountancy -1                                   Class XII                   NCERT Publication
Accountancy -II                                   Class XII                   NCERT Publication

Guidelines for Project Work in Accounting and Practical work in computerised Accounting Class XII CBSE Publication.

Suggested Question Paper Design

Accountancy (Code No. 055)

Class XII (2017-18) March 2018 Examination

One Paper                                                                                                                             Theory: 80 Marks

                                                                                                                                                   Duration: 3 hrs.

S. No. Typology of Questions Very Short Answer 1 Mark Short Answer I 3 Marks Short Answer II 4 Marks Long Answer I 6 Marks Long Answer II 8 Marks Marks %
1 Remembering - (Knowledge based simple recall questions, to know specific facts, terms, concepts, principles, or theories; identify, define, or recite, information) 3 1 1 1 - 16 20%
2 Understanding - (Comprehension
- to be familiar with meaning and
to understand conceptually,
interpret, compare, contrast,
explain, paraphrase, or interpret
information)
2 - 2 1 1 24 30%
3 Application - (Use abstract
information in concrete
situation, to apply knowledge to
new situations; Use given content
to interpret a situation, provide
an example, or solve a problem)
- 2 2 1 - 20 25%
4 High Order Thinking Skills -
(Analysis & Synthesis- Classify,
compare, contrast, or
differentiate between different
pieces of information; Organize
and/or integrate unique pieces of
information from a variety of
sources)
2 - - 1 1 16 20%
5 Evaluation - (Appraise, judge, and/or justify the value or worth of a decision or outcome, or to predict outcomes based on values) 1 1 - - - 04 5%
  Total 8x1=8 4x3=12  5x4=20  4x6=24 2x8=16 80
(23)+20
Project
100%

Scheme of options: All questions carrying 8 marks will have an internal choice.

Note: The Board has introduced Learning Outcomes in the syllabus to motivate students to constantly explore all levels of learning. However these are only indicative. These do not in any way restrict the scope of questions asked in the examinations. The examination questions will be strictly based on the prescribed question paper design and syllabus


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