CLASS-XII

PAPER : ACCOUNTANCY

BOARD SCHEME:

Marks : 100

ACCOUNTING - III (Marks : 50)

1. Accounting for partnership firms (Marks : 27)

2. Company Accounts (Marks : 18)

3. Final Accounts of Companies (Marks : 05)

Note : One of the following three to be offered from Accounting IV.

1. Analysis of Financial Statements
   OR
2. Elements of Costing
   OR
3. Auditing

1. Analysis of Financial Statements (Marks : 06)
2. Ratio Analysis (Marks : 15)
3. Statement of Changes in Financial Position (Marks : 18)
4. Comparison of Financial Statements (Marks : 05)
5. Cash Budget (Marks : 06)

1. Elements of Costing
   1. Meaning and Objectives of (Marks : 07)
      Costing and Cost Concepts
   2. Elements of Cost-Nature (Marks : 07)
      Characteristics and Examples
   3. Costing for Raw Materials and Stores (Marks : 12)
   4. Costing for Labour (Marks : 10)
   5. Costing for Overheads (Marks : 07)
   6. Cost Sheet (Marks : 07)
2. Auditing
   1. Auditing (Marks : 05)
   2. Auditor (Marks : 05)
   3. Types of Auditing (Marks : 05)
   4. Modes of Auditing (Market :08)
   5. Audit Process (Marks : 12)
   6. Evidence, Vouching and Verification (Marks : 10)
   7. Audit Report (Marks : 05)

   Unit 1 : Accounting for Partnership firms

   Nature of partnership firm.

   Partnership deed (meaning, impact on accounting treatment).

   Special aspects of partnership accounts.

   1. Fixed vs Fluctuating capital
   2. Division of profit among partners
   3. Past adjustments and guarantees.
   4. Change in the profit sharing ratios of existing partners.

   Admission of a partner

   1. Effects of admission of a partner.

   2. Change in profit sharing ratio - sacrificing ratio to be emphasised.
   3. Goodwill : Nature, methods of calculation : Average profit, Super profit, Capitalisation, Accounting treatment.

   4. Need for revaluation of assets and liabilities - Accounting treatment (excluding memorandum revaluation account).

   Retirement / Death of a partner

   1. Change in profit sharing ratio (emphasis on gaining ratio).
   2. Share of capital.
   3. Share of goodwill and accumulated profits / reserves.
   4. Joint life policy.

   Dissolution of partnership firm

   1. Meaning
   2. Settlement of accounts : Preparation of realization account and related accounts (excluding piecemeal distribution, sale to a company and insolvency of a partner)

   Unit 2 : Company Accounts (Marks : ?)

   Nature of company

   Accounting for share capital

   1. Issue and allotment of shares : entries to be passed for application, allotment and call;
   2. Over - subscription and under-subscription;
   3. Issue at par, at a premium and at a discount;
   4. Calls in advance - permissibility and accounting entries;
   5. Calls in arrears.

   Forfeiture of shares due to non - payment of calls

   1. Accounting treatment;
   2. Re-issue of forfeited shares-at-par, at a premium, and at a discount-accounting treatment.

   Issue of debentures

   1. Meaning of debentures
   2. Nature of debenture capital (loan capital )
   3. Issue of debentures at par, at a discount and at a premium;
   4. Debentures as a collateral security;
   5. Debentures interest - concept of periodic payment.

   Redemption of debentures

   1. Meaning

   2. Accounting entries - issue at oar and redeemable at par, issue at discount and

   Redeemable at par, issue at premium and redeemable at par, issue at par and

   Redeemable at premium, issue at discount and redeemable at premium;

   (c) Treatment of discount / loss on the issue of debentures:

   (d) Source of redemption of debentures :

   • from the proceeds of fresh issue of share - capital and debentures;
   • out of accumulated profit, including sinking fund;
   • out of current resources.

   Methods of redemption of debentures

   1. In lump-sum at the end of stipulated period;
   2. By draw of lots;
   3. By purchasing in the open market;
   4. By conversion into new debentures or shares.

   Unit 3 : Final Accounts of companies (Marks : )

   Balance sheet in the prescribed form with major headings only (Schedule V, Part one only)

   ACCOUNTANCY - IV

   1. ANALYSIS OF FINANCIAL STATEMENTS

   Unit 1: Analysis of Financial Statements

   Meaning

   Significance & Purpose

   Limitations

   Unit 2 : Ratio Analysis

   Meaning of ratio analysis.

   Meaning, Objectives & computation of :

   1. Liquidity ratios : Current ratio, quick ratio.

   2. Solvency ratio : Debt equity ratio; Interest coverage ratio, Debit to total funds

      ratio; Proprietary ratio.

   3. Activity ratios : Capital turnover ratio fixed asset turnover ratio, Net working capital

      Turnover ratio, Stock turnover ratio, Debtors turnover ratio; Debit collection period.

   4. Profitability ratios : Gross profit ratio (GP), Net profit ratio (PR), Return on Investment (ROI), Return on Equity (ROE), Operating ratio.

   Advantage and Limitations of Ratios

   Unit 3 : Statement of Changes in Financial Position (SCFP)

   Meaning and objectives of SCFP

   Meaning and purpose of Fund Flow statement and Cash flow statement

   Preparation of :

   1. Funds flow statement (net working capital basis)
   2. Cash flow statement (statement on cash basis)

   Adjustment related to depreciation and amortization of intangible assets with reference to

   1. and (b)

   Difference between the two types of statements

   Changes in absolute figures for not more than 3 years to be commented upon (Intrafirm only)

   Unit 4: Difference between the two types of statements

   Meaning and Purpose.

   Change in absolute figures for not more than 3 years to be commented upon (intrafirm only)

   Unit 5 : Cash Budget

   Meaning of Budget.

   Cash Budget

   1. Concept;

   2. Utility;
   3. Preparation of simple cash budget with 10 - 15 variables and with no missing figure.
   OR

   1. ELEMENT OF COSTING

   Unit 1 : Meaning and objectives of Costing and Cost Concepts

   Meaning, distinction between cost accounting and financial accounting

   Objectives :

   1. Ascertainment of cost;
   2. Cost control

   Cost Concepts - meaning with illustrations

   1. Fixed Cost;
   2. Variable Cost;
   3. Semi - Variable cost;
   4. Direct cost;
   5. Indirect cost (overheads);

   Unit 2 : Elements of Cost - Nature, Characteristics and Examples

   Direct material

   Direct labour

   Direct expenses

   Factory overheads

   General office and administrative overheads

   Selling and distribution overheads

   Unit 3 : Costing for Raw Material and Stores

   Meaning and types of raw materials and stores.

   Stores records :

   1. Bin card-meaning and proforma preparation;
   2. Stores ledger-meaning and proforma.

   Pricing of material issued - method;

   1. First in first out (FIFO) - meaning and advantages;
   2. Last in first out (LIFO) - meaning and advantages;
   3. Simple average - meaning and advantages;
   4. Weighted average - meaning and advantages;
   5. Preparation of stores ledger on the basis of FIFO and LIFO resulting in valuation of closing stock.

   Material losses - meaning and illustration :

   1. Wastage.
   2. Scrap
   3. Spoilage,
   4. Defectives
   5. Normal Loss,
   6. Abnormal loss,

   Stock - levels meaning and computation :

   1. Minimum level,
   2. Maximum level,
   3. Averages stock level,
   4. Recorder level.

   Reorder quantity :

   1. Meaning :
   2. Application of economic order quantity (EQO) formula,

   Unit 4 : Costing for Labour

   Time keeping :

   1. Meaning.
   2. Methods - Attendance register and card - punching machine.

   Time Booking :

   1. Meaning,
   2. Job - card - Meaning and preparation,
   3. Idle time - concept

   Methods of wage payment :

   1. Piece basis - Meaning and simple calculation;
   2. Time basis - Meaning and simple calculation;

   Incentives wages plans (discussion of specific incentive plans not required) :

   1. Meaning and forms :
   2. Importance.

   Unit 5 : Costing for overheads

   Classifications of overheads.

   Factory overheads - meaning and example.

   General and administration overheads - Meaning & examples.

   Allocation - Meaning

   Apportionment - Meaning and method.

   Absorption (Labour - hour rate and Machine - hour rate methods).

   Unit 6 : Cost Sheet

   Meaning and importance.

   Components of cost sheet :

   1. Prime Cost;

   2. Works cost or cost of production;

   3. Cost of goods sold;
   4. Cost of sales;

   Preparation of cost sheet.

   OR
   1. AUDITING

   Unit 1 : Auditing

   Meaning and definition

   Nature

   Objectives

   Unit 2 : Auditor

   Attributes

   Qualification as per Companies Act.

   Unit 3: Types of Auditing

   Statutory audit; statutory and internal audit - meaning, purpose and difference.

   Unit 4: Modes of Auditing

   Continuous audit, periodic audit, interim audit - meaning, advantages and limitations.

   Unit 5: Audit Process

   Steps :

   Audit Programme - meaning and purpose.

   Review of internal control and internal check :

   1. Meaning:
   2. Form;
   3. Difference between these two systems

   Audit note book and working papers :

   1. Meaning of audit note book;
   2. Forms of audit note book;
   3. Preparation of audit note book;
   4. Meaning of working papers;
   5. Manner of maintenance of working papers;

   Permanent file;

   Current file.

   Errors and trial balance :

   1. Meaning of error and fraud,
   2. Difference between error and fraud,
   3. Types of errors.
      • Errors of omission;
      • Errors of principles;
      • Compensating errors.
   4. Trial balance and errors affecting and those not affecting agreement of trial balance.

   Unit 6: Evidence, Vouching and Verification

   Meaning of Evidence.

   Relevance of Evidence in auditing.

   Meaning of Vouching.

   Vouching of normal trading transactions of general type of business.

   Vouching of transactions of assets and liabilities of common types.

   Verification of assets and liabilities of common types (only physical and documentary verification ).

   Unit 7: Audit Report

   Meaning

   Scope

   General Features

   Purpose.