Topics
Introduction to Partnership and Partnership Final Accounts
- Concept of Partnership
- Partnership Deed
- Provisions of the Indian Partnership Act, 1932
- Special Aspects of Partnership Accounts> Partner's Capital Account
- Partner's Capital Account> Fixed Capital Account
- Partner's Current Account
- Partner's Capital Account> Fluctuating Capital Account
- Examples on Partners’ Capital Accounts
- Partnership Final Accounts
- Trading Account
- Profit and Loss Account
- Balance Sheet
- Adjustments in Final Account
- Examples on Partnership Final Accounts
Introduction to Partnership
Partnership Final Accounts
- Partnership Final Accounts
- Adjustments - Income Receivable
- Interest on Capital and Current Accounts
- Adjustments - Interest on Investment and Loans
- Adjustments - Goods Destroyed by Fire Or Accident (Insured Or Uninsured)
- Adjustments - Goods Stolen
- Adjustments of Financial Statements - Goods Distributed as Free Samples and Manager's Commission
- Adjustments - Goods Withdrawn by Partners
- Adjustments - Unrecorded Purchases and Sales
- Adjustments - Capital Expenditure Included in Revenue Expenses and Vice-versa
- Adjustments - Bills Receivable Dishonoured
- Adjustments - Bills Payable Dishonoured
- Adjustments - Deferred Expenses
- Adjustments - Capital Receipts Included in Revenue Receipts and Vice-versa
- Adjustments - Commission to Working Partner Managers on the Basis of Gross Profit Net Profit, Sales, Etc
Accounts of ‘Not for Profit’ Concerns
Reconstitution of Partnership (Admission of Partner)
- Reconstitution of Partnership
- Admission of Partner
- New Profit Sharing Ratio
- Sacrificing Ratio
- Admission of Partner> Accounting Treatment of Goodwill
- Average Profit Method
- Super Profit Method
- Admission of Partner> Reserves and Accumulated Profit/Losses
- Admission of Partner> Revaluation of Assets and Liabilities
- Admission of Partner> Adjustment of Capital
- Examples on Admission of Partner
Reconstitution of Partnership
- Modes of Reconstitution of a Partnership Firm
- Admission of Partner
- New Profit Sharing Ratio
- Methods of Valuation of Goodwill
- Admission of Partner> Adjustment of Capital
- Admission of Partner> Revaluation of Assets and Liabilities
- Admission of Partner> Accounting Treatment of Goodwill
- Retirement of Partner
- Needs of Retirement Or Death of a Partner
- Retirement/Death of a Partner> Treatment of Goodwill
- Retirement/Death of a Partner> Revaluation of Assets and Liabilities
- Retirement/Death of a Partner> New Profit Sharing Ratio
Dissolution of Partnership Firm
Reconstitution of Partnership (Retirement of Partner)
- Retirement of Partner
- Retirement/Death of a Partner> New Profit Sharing Ratio
- Retirement/Death of a Partner> Gaining Ratio
- Retirement/Death of a Partner> Treatment of Goodwill
- Hidden Goodwill
- Retirement/Death of a Partner> Reserves and Accumulated Profits/Losses
- Retirement/Death of a Partner> Revaluation of Assets and Liabilities
- Retirement/Death of a Partner> Adjustment of Capitals
- Computation of Amount Due to the Retiring Partner
- Payment of Amount due to Retiring Partner
- Examples on Retirement of Partner
Reconstitution of Partnership (Death of Partner)
- Death of Partner
- Retirement/Death of a Partner> New Profit Sharing Ratio
- Retirement/Death of a Partner> Gaining Ratio
- Retirement/Death of a Partner> Revaluation of Assets and Liabilities
- Determination of Amount due to the Deceased Partner
- Settlement of Amount Payable to the Deceased Partner
- Examples on Death of Partner
Accounts of “Not for Profit” concerns
- Concept of Non-Profit Concerns
- Receipts and Payments Account
- Additional Information - Prepaid Expenses of the Current and Previous Year
- Additional Information - Subscription Received in Advance
- Additional Information - Subscription Outstanding of the Current and Previous Year
- Additional Information - Capitalisation of Entrance Fees
- Additional Information - Creation of Special Funds Out of Donations
- Additional Information - Stock of Stationery
- Additional Information - Opening Balances of Assets and Liabilities
- Income and Expenditure Account
Dissolution of Partnership Firm
- Concept of Dissolution of Partnership Firm
- Difference Between Dissolution of Partnership and Dissolution of Firm
- Accounting at the Time of Dissolution of a Firm
- Types of Firm Dissolution> Simple Dissolution
- Accounting Entries To Close The Books Of Accounts
- Transfer Stage
- Realisation/Disposal Stage
- Distribution Stage
- Treatment of Unrecorded (Undisclosed) Assets and Liabilities
- Process of Dissolution> Valuation of Goodwill
- Process of Dissolution> Realisation Account
- Examples on Simple Dissolution
- Types of Firm Dissolution> Dissolution under Insolvency Situation
- When One Partner Becomes Insolvent
- When Two Partners Become Insolvent
- When All Partners Are Insolvent
Single Entry System
- Concept of Single Entry System
- Statements of Affairs
- Additional Information - Additional Capital
- Effects of Adjustments-Drawings
- Concept of Depreciation
- Additional Information - Undervaluation of Assets and Liabilities
- Additional Information - Overvaluation of Assets and Liabilities
- Interest on Capital and Current Accounts
- Additional Information - Partners Salary
- Illustrations of Single Entry System
Bill of Exchange (Only Trade Bill)
- Necessity of Bill of Exchange (Only Trade Bill)
- Acceptance
- Concept of Bills of Exchange
- Honouring and Dishonouring of Bill of Exchange
- Accounting Treatment> Discounting the Bill of Exchange
- Accounting Treatment> Retaining the Bill till the Due Date
- Accounting Treatment> Endorsement of Bill of Exchanges
- Accounting Treatment > Bills Sent to Bank for Collection
- Insolvency of Drawee
- Retirement of Bill under Rebate
- Accounting at the Time of Dissolution of a Firm
- Examples on Bills of Exchange
Bills of Exchange
- Credit Transactions
- Concept of Bills of Exchange
- Acceptance
- Due Date
- Promissory Note
- Honouring and Dishonouring of Bill of Exchange
- Classification of Bills for Accounting
- Accounting Treatment> Retaining the Bill till the Due Date
- Accounting Treatment> Discounting the Bill of Exchange
- Accounting Treatment> Endorsement of Bill of Exchanges
- Accounting Treatment > Bills Sent to Bank for Collection
- Renewal Bill of Exchange
- Retirement of Bill under Rebate
- Insolvency of Drawee
- Examples on Bills of Exchange
Company Accounts - Issue of Shares
- Joint Stock Company
- Concept of Shares
- Kinds of Shares> Equity Shares
- Kinds of Shares> Preference Shares
- Shareholder's Fund> Share Capital of a Company
- Treatment of Share Capital in Balance Sheet
- Methods of Issue of Share Capital
- Terms of Issue of Shares> Issue of Shares at Par
- Terms of Issue of Shares> Issue of Shares at Premium
- Terms of Issue of Shares> Issue Shares at Discount
- Over Subscription of Shares
- Pro-rata Allotment
- Under Subscription of Shares
- Calls-In-Arrears
- Calls-In-Advance
- Issue of Shares for Consideration other than Cash
- Forfeiture of Shares
- When Shares Were Originally Issued at a Premium
- When Shares Were Originally Issued at Discount
- Reissue of Forfeited Shares
Company Accounts
- Concept of Shares
- Shareholder's Fund> Share Capital of a Company
- Private Placement of Shares
- Terms of Issue of Shares> Issue of Shares at Par
- Under Subscription of Shares
- Over Subscription of Shares
- Types of Share Issue
- Forfeiture of Shares
- Concept of Debentures
- Terms of Issue of Debentures> Issue of Debentures at Par
- Issue of Debentures for Consideration Other than Cash
- Interest on Debentures
Analysis of Financial Statements
- Concept of Financial Statements
- Concept of Financial Statement Analysis
- Formats of Financial Statement Analysis
- Tools of Analysis of Financial Statements
- Comparative Financial Statement
- Comparative Balance Sheet
- Comparative Income Statement
- Common-Size Statement
- Common Size Balance Sheet
- Common-Size Income Statement
- Concept of Cash Flow Statement
- Preparation of Cash Flow Statement
- Concept of Ratio Analysis
- Current Ratios/Working Capital Ratios
- Quick Ratio/Acid Test Ratio/Liquid Ratio
- Gross Profit Ratio
- Net Profit Ratio
- Operating Profit Ratio
- Operating Ratio
- Return on Investment
- Return on Capital Employed
Analysis of Financial Statements
- Comparative Financial Statement
- Common-Size Statement
- Concept of Cash Flow Statement
- Quick Ratio/Acid Test Ratio/Liquid Ratio
- Classification of Ratios> Income Statement Ratio
- Classification of Ratios> Combined/Mixed Ratio
- ROCE
Computer In Accounting
- Important Instructions
- Trial Balance Items Treatment
- Problem-Solving Steps
Maharashtra State Board: Class 12
Adjustments
| Adjustment | 1st Effect | 2nd Effect | |
|---|---|---|---|
| 1. | Closing Stock | Balance Sheet (Asset) | Trading A/c (Credit) |
| 2. | Outstanding Expenses | Add to expenses in P&L A/c | Balance Sheet (Liability) |
| 3. | Prepaid Expenses | Deduct from expenses in P&L A/c | Balance Sheet (Asset) |
| 4. | Income Received in Advance | Deduct from income in P&L A/c | Balance Sheet (Liability) |
| 5. | Income Receivable | Add to income in P&L A/c | Balance Sheet (Asset) |
| 6. | Bad Debts | Show in P&L A/c | Deduct from Debtors (Asset) |
| 7. | Provision for Doubtful Debts | Show in P&L A/c | Deduct from Debtors (Asset) |
| 8. | Reserve for Discount on Debtors | Show in P&L A/c | Deduct from Debtors (Asset) |
| 9. | Depreciation | Show in P&L A/c | Deduct from Asset in Balance Sheet |
| 10. | Interest on Capital | Show in P&L A/c (Debit) | Partners' Capital/Current A/c (Credit) |
| 11. | Interest on Drawings | Partners' Capital/Current A/c (Debit) | Show in P&L A/c (Credit) |
| 12. | Interest on Loan Taken | P&L A/c (Debit) | Add to Loan (Liability) |
| 13. | Interest on Investment/Loan Given | P&L A/c (Credit) | Show in Balance Sheet (Asset) |
| 14. | Goods Destroyed (Insured) | Trading A/c (Credit) | Show Claim & Loss separately |
| 15. | Goods Destroyed (Uninsured) | P&L A/c (Debit) | Trading A/c (Credit) |
| 16. | Goods Stolen/Free Samples | P&L A/c (Debit) | Trading A/c (Credit) |
| 17. | Goods Withdrawn by Partners | Trading A/c (Credit) or deduct from Purchases | Partners' Capital/Current A/c (Debit) |
| 18. | Unrecorded Purchases/Sales | Add to Purchases/Sales | Add to Creditors/Debtors in Balance Sheet |
| 19. | Wrong Classification of Capital/Revenue | Adjust between Asset or Expense in correct account | Reflect proper classification in Balance Sheet |
| 20. | Bills Dishonoured (Receivable/Payable) | Add to Debtors/Creditors | Deduct from Bills Receivable/Payable |
| 21. | Deferred Expenses | Current year portion in P&L A/c | Remaining as Prepaid in Balance Sheet |
| 22. | Wrongly included Revenue/Capital Receipts | Adjust in Sales or Asset side | Correct classification in Trading/Balance Sheet |
| 23. | Partner's Commission (on GP/Sales) | Show in P&L A/c (Debit) | Show in Partners' Capital/Current A/c (Credit) |
Maharashtra State Board: Class 12
Hidden Adjustments from Trial Balance
| Hidden Adjustment | P&L Effect | Balance Sheet Effect | |
|---|---|---|---|
| 1. | Salaries/Rent Paid for 10 Months | Add 2 months to P&L A/c | Show 2 months as outstanding on Liability Side |
| 2. | Insurance Paid till June | Deduct 3 months from Insurance in P&L | Show 3 months as Prepaid (Asset) |
| 3. | Advertisement for 4 Years | 1/4 in P&L A/c | 3/4 as Prepaid on Asset Side |
| 4. | Rent Received for 11 Months | Add 1 month to P&L A/c | Show 1 month as Income Receivable (Asset) |
| 5. | Loan Taken (10%) on Jan 1, 2018 | Add 3 months' interest in P&L A/c (Debit) | Add interest payable in Loan (Liability) |
| 6. | Investment (16%) from Jan 1, 2019 | Add 3 months' interest in P&L A/c (Credit) | Show as interest receivable (Asset) |
| 7. | 10% Government Bonds | Add interest receivable in P&L A/c (Credit) | Show separately or under Investments in Asset Side |
Maharashtra State Board: Class 12
Net Profit before Charging Commission
\[\text{Commission Amount}=\frac{\text{Rate of Commission}\times\text{Net~Profit}}{100}\]
Maharashtra State Board: Class 12
Net Profit after Charging Commission
\[\text{Commission Amount}=\frac{\text{Rate of Commission}\times\text{Net~Profit}}{100+\text{Rate of Commission}}\]
