Topics
Partnership Accounts
Fundamentals of Partnership
- 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 Capital Account> Fluctuating Capital Account
- Difference Between Fixed Capital Account and Fluctuating Capital Account
- Examples on Partners’ Capital Accounts
- Profit and Loss Appropriation Account
- Profit & Loss Account vs Profit & Loss Appropriation Account
- Difference Between Charge Against Profit and Appropriation out of Profit
- Interest on Capital and Current Accounts
- Interest on Capital and Current Accounts> Accounting Treatment of Interest on Capital
- Opening Capital
- Interest on Loan by Partner to the Firm
- Interest on Loan by the Firm to a Partner
- Rent Paid or Due to Partner
- Interest on Drawings
- Partner's Remuneration (Salary or Commission)
- Transfer to Reserves
- Past Adjustments
- Guarantee of Profit to a Partner
- Interest on Drawings> Drawings Against Profit and Drawings Against Capital
- Adjustments Before the Closing of Partnership Accounts
Goodwill
- Concept of Goodwill
- Classification of Goodwill> Purchased Goodwill
- Classification of Goodwill> Self-Generated Goodwill
- Methods of Valuation of Goodwill
- Average Profit Method
- Average Profit Method> Simple Average Profit Method
- Average Profit Method> Weighted Average Profit Method
- Super Profit Method
- Capitalisation Method> Capitalisation of Average Profit
- Capitalization Method> Capitalisation of Super Profit
- Difference Between Average Profit and Super Profit
Admission of Partner
- Admission of Partner
- Admission of Partner> Change in Profit-Sharing Ratio
- New Profit Sharing Ratio
- Sacrificing Ratio
- Difference Between Sacrificing Ratio and New Profit-Sharing Ratio
- Admission of Partner> Accounting Treatment of Goodwill
- Admission of Partner> Revaluation of Assets and Liabilities
- Admission of Partner> Reserves and Accumulated Profit/Losses
- Workmen's Compensation Reserve
- Investment Fluctuation Reserve
- General Reserve
- Accounting for Retained Profits, Losses & Reserves via Single Entry
- Admission of Partner> Adjustment of Capital
Retirement and Death of a Partner
- Retirement of Partner
- Retirement/Death of a Partner> New Profit Sharing Ratio
- Retirement/Death of a Partner> Gaining Ratio
- Difference Between Sacrificing Ratio and Gaining Ratio
- Retirement/Death of a Partner> Treatment of Goodwill
- Hidden Goodwill
- Retirement/Death of a Partner> Reserves and Accumulated Profits/Losses
- Computation of Amount Due to the Retiring Partner
- Payment of Amount due to Retiring Partner
- Retirement/Death of a Partner> Adjustment of Capitals
- Retirement and Settlement of Loan
- Retirement During the Accounting Year
- Death of Partner
- 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
Dissolution of a 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
- Process of Dissolution> Realisation Account
- For Closing Assets Accounts
- For Closing Liabilities Accounts
- For Realisation of Assets
- For Payment of Outside Liabilities
- For Payment of Realisation Expenses
- For Closing Realisation Account
- Process of Dissolution> Loan by Partner to the Firm
- Process of Dissolution> Loan by Firm to the Partner
- Process of Dissolution> Partner's Capital Account
- Process of Dissolution> Cash and Bank Accounts
- Process of Dissolution> Valuation of Goodwill
- Treatment of Unrecorded (Undisclosed) Assets and Liabilities
- Memorandum Balance Sheet
Joint Stock Company Accounts
Issue of Shares
- Concept of Company
- Kinds of Companies
- Incorporation of a Company
- Difference Between Reserve Capital and Capital Reserve
- Shareholder's Fund> Share Capital of a Company
- Concept of Shares
- Kinds of Shares> Preference Shares
- Kinds of Shares> Equity Shares
- Difference Between Preference Shares and Equity Shares
- Format of Company's Balance Sheet
- Disclosure of Share Capital in a Company's Balance Sheet
- Terms of Issue of Shares> Issue of Shares at Par
- Terms of Issue of Shares> Issue of Shares at Par
- Terms of Issue of Shares> Issue of Shares at Premium
- Issue of Shares for Consideration other than Cash
- Calls-In-Arrears
- Interest on Calls-In-Arrears
- Calls-In-Advance
- Interest on Calls-In-Advance
- Difference Between Calls-In-Arrears and Calls-In-Advance
- Over Subscription of Shares
- Under Subscription of Shares
- Difference Between Oversubscription and Undersubscription of Shares
- Forfeiture of Shares
- When Shares Were Originally Issued at a Premium
- When Shares Were Originally Issued at Discount
- Reissue of Forfeited Shares
- Forfeiture of Shares Allotted Under Pro-rata Category
Issue of Debentures
- Concept of Debentures
- Difference Between Debentures and Shares
- Difference Between Debentureholder and Shareholder
- Types of Debentures
- Issue of Debentures for Cash
- Terms of Issue of Debentures> Issue of Debentures at Par
- Terms of Issue of Debentures> Issue of Debentures at Premium
- Terms of Issue of Debentures> Issue of Debentures at Discount
- Oversubscription of Debentures
- Undersubscription of Debentures
- Issue of Debentures for Consideration Other than Cash
- Issue of Debentures as Collateral Security
- Issue of Debentures with Terms of Redemption
- Debentures Issued at Par and are Redeemable at Par
- Debentures Issued at Discount and are Redeemable at Par
- Debentures Issued at Premium and are Redeemable at Par
- Debentures Issued at Par and are Redeemable at Premium
- Debentures Issued at Discount and are Redeemable at Premium
- Debentures Issued at Premium and redeemable at Premium
- Difference Between Premium on Issue of Debentures and Redemption of Debentures
- Issue of Debentures> Calls-In-Arrears
- Issue of Debentures> Calls-In-Advance
- Interest on Debentures
- Writing off Discount/Loss on Issue of Debentures
Redemption of Debentures
- Concept of Redemption of Debentures
- Sources of Redemption of Debentures
- Debentures Redemption Reserve (DRR)
- Debenture Redemption Investment (DRI)
- Methods of Redemption of Debentures> Redemption by Payment in Lump Sum
- Methods of Redemption of Debentures> Redemption by Payment in Instalments by Draw of Lots
Final Accounts of Companies
- Concept of Financial Statements
- Format of Company's Balance Sheet
- Difference Between Company's Balance Sheet and Firm's Balance Sheet
- Contents of Balance Sheet> Equity and Liabilities
- Shareholder's Fund> Share Capital of a Company
- Disclosure of Share Capital in a Company's Balance Sheet
- Shareholders' Fund> Reserves and Surplus
- Shareholders' Fund> Money Received Against Share Warrants
- Equity and Liabilities> Share Application Money Pending Allotment
- Current Liabilities – Based on Operating Cycle
- Equity and Liabilities> Non-Current Liabilities
- Equity and Liabilities> Current Liabilities
- Contents of Balance Sheet> Assets
- Current Assets – Based on Operating Cycle
- Assets> Non-Current Assets
- Assets> Current Assets
- Contingent Liabilities and Commitments
- Statement of Profit and Loss
- Provisions and Reserves
- Types of Reserves
- Examples on Financial Statements
Financial Statement Analysis
Cash Flow Statement
- Concept of Cash Flow
- Concept of Cash Flow Statement
- Difference Between Cash Flow Statement and Cash Budget
- Difference Between Cash Flow Statement and Income Statement
- Procedure of Preparing Cash Flow Statement
- Classification of Business Activities as per AS-3
- Treatment of Some Peculiar Items
- Cash Flow from Operating Activities
- Cash Flow from Investing Activities
- Cash Flow from Financing Activities
- Preparation of Cash Flow Statement
- Examples on Cash Flow Statement
Ratio Analysis
- Concept of Ratio
- Concept of Ratio Analysis
- Classification of Ratios
- Liquidity Ratios
- Current Ratios/Working Capital Ratios
- Quick Ratio/Acid Test Ratio/Liquid Ratio
- Difference Between Current Ratio and Quick Ratio
- Solvency Ratios
- Debt to Equity Ratio
- Debt to Total Assets Ratio
- Proprietary Ratio
- Interest Coverage Ratio
- Activity Ratios
- Inventory Turnover Ratio
- Trade Receivables Turnover Ratio
- Trade Payables Turnover Ratio
- Working Capital Turnover Ratio
- Profitability Ratios
- Gross Profit Ratio
- Operating Ratio
- Net Profit Ratio
- Operating Profit Ratio
- Earnings Per Share
- Price Earnings Ratio
- Return on Investment
- Introduction
- Horizontal Analysis vs Vertical Analysis
- Intra-Firm Comparison and Inter-Firm Comparison
CISCE: Class 12
Difference Between Horizontal Analysis and Vertical Analysis
| Basis | Horizontal Analysis | Vertical Analysis |
|---|---|---|
| Period | Uses financial data of two or more periods | Uses data of one accounting period |
| Items | Same items across different periods | Different items of the same period |
| Information | Shows data in absolute & percentage terms | Shows data only in percentage terms |
| Usefulness | Used for Time Series Analysis (trend over time) | Used for Cross-Sectional Analysis (within a period) |
| Method | Comparative Balance Sheet & P&L Statement | Common Size Balance Sheet, P&L, and ratios |
CISCE: Class 12
Key Points: Methods of Financial Statement Analysis
- Internal Analysis: Done by management using internal records; helps in planning and decision-making.
- External Analysis: Done by outsiders like investors, creditors, and the government using published financial data.
- Horizontal (Dynamic) Analysis: Compares financial data over 2 or more years to identify trends and changes. Useful for long-term planning.
- Vertical (Static) Analysis: Analyses data of a single year by expressing items as a percentage of a base figure. Useful for comparing performance within departments or firms.
- Horizontal vs. Vertical: Horizontal shows trends over time (more useful), while vertical shows structure in a single period (limited use).
