Units and Topics
# | Unit/Topic | Marks |
---|---|---|
100 | Financial Accounting 1 | - |
200 | Financial Accounting 2 | - |
Total | - |
Syllabus
- Basis of Accounting System - Cash Basis
- Basis of Accounting System - Accrual Or Mercantile Basis
- Qualitative Characteristics of Accounting Information
- Reliability of Accounting Information
- Relevance of Accounting Information
- Understandability of Accounting Information
- Comparability of Accounting Information
- Business Transaction-Cash Transactions
- Business Transaction-Credit Transactions
- Goods
- Profit
- Loss
- Difference Between Profit and Income
- Non-current and Current Asset
- Assets
- Fixed Assets
- Liabilities
- Capital and Drawings
- Cash Discount
- Trade Discount
- Stock
- Concept of Accounting and Objectives
- Advantages and Limitations of Accounting
- Accounting Information Types and Needs
- Inventory
- Trade Receivables (Debtors and Bills Receivable)
- Trade Payables(Creditors and Bills Payable)
- Fundamental Accounting Assumptions-Going Concern
- Fundamental Accounting Assumptions-Consistency
- Fundamental Accounting Assumptions-Accrual
- Accounting Standards
- Study of Double Entry Book-keeping System
- Advantages of Double Entry Book Keeping Systems or Accounting
- Explanation About IFRS (International Financial Reporting Standards)
- concept and objectives
- Accounting Principles Or GAAP-Accounting Entity
- Accounting Principles Or GAAP-Accounting Period
- Accounting Principles Or GAAP-Full Disclosure
- Accounting Principles Or GAAP-Materiality Concept
- Accounting Principles Or GAAP-Prudence,
- Accounting Principles Or GAAP-Cost Concept
- Accounting Principles Or GAAP-Matching Concept
- Accounting Principles Or GAAP-Dual Aspect Concept
- Purchases
- Purchases Returns
- Sales
- Sales Return
- Capital Expenditure
- Revenue and Deferred Revenue Expenditure
Introduction to Accounting
• Accounting- concept, objectives, and limitations, types of information; users of accounting and their needs. advantages accounting information
• Basic accounting terms: business transaction, account, capital, drawings, liabilities (non - current and current); assets (non-current and current) fixed assets (tangible and intangible assets), receipts (capital and revenue), expenditure (capital, revenue and deferred), expense, income, profits, gains and losses, purchases, purchases returns, sales, sales returns, goods, stock, inventory, trade receivables (debtors and bills receivable), trade payables (creditors and bills payable), cost, vouchers, discount - trade and cash.
Theory Base of Accounting
• Fundamental accounting assumptions: going concern, consistency and accrual.
• Accounting principles: accounting entity, money measurement, accounting period, full disclosure, materiality, prudence, cost concept, matching concept and dual aspect.
• Accounting Standards and IFRS (International Financial Reporting Standards): concept and objectives
• Double entry system of accounting.
• Bases of accounting - cash basis and accrual basis.
- Vouchers
- Cash Memo
- Debit and Credit Note
- Cheque
- Bearer
- Order
- Crossed
- Account payee
- Cash Book with Cash Column
- Cash Book with Cash and Bank Columns
- Columns in Cash Book with Cash and Bank columns
- Format of Cash Book with Cash and Bank columns
- Accounting treatment of banking transactions in Cash Book with Cash and Bank
- Balancing of Cash Book with Cash and Bank column
- Petty Cash Book
Types of Petty Cash Book
- Simple petty cash
- Analytical Columnar Petty Cash Book
- Purchase Book Or Purchases Day Book
- Sales Book Or Sales Day Book
- Purchase Return Book Or Purchases Return Day Book
- Sales Return Book Or Sales Return Day Book
- Journal Proper
Following transactions are recorded in this Journal Proper
- Opening Entries
- Adjustment Entries
- Rectification Entries
- Transfer Entries
- Other Entries
- Analysis of Transactions Using Accounting Equation.
- Rules of Debit and Credit for Assets
- Rules of Debit and Credit for Liabilities
- Rules of Debit and Credit for Capital
- Rules of Debit and Credit for Revenue and Expenses.
- Origin of Transactions
- Preparation of Accounting Vouchers- Cash (Debit and Credit)
- Preparation of Accounting Vouchers- Non Cash (Transfer).
- Books of Original Entry
- Format and
- Recording Journal
- Specimen of Ledger
- Balancing of Ledger Accounts.
- Personal Account
- Real Account
- Nominal Account
- Ledger-Posting from Journal
- Need and Importance of Bank Reconciliation Statement
- Preparation of Bank Reconciliation Statement
- Calculating Bank Balance at an Accounting Date
- Corrected Cash Book Balanced
- Meaning and Purpose of Trial Balance
- Preparation of the Trial Balance by the Balance Method
- Meaning and Effects of Errors
- Types of Errors-Errors of Principles
- Types of Errors-Errors of Ommission
- Types of Errors-Errors of Commission
- Types of Errors-Compensating Errors
- Errors Affecting and Not Affecting Trial Balance
- Treatment of Balance of Suspense Account
- Rectification Entries
- Detection of Error
- Depreciation
- Meaning
- Definition
- Importance
- Methods of Depreciation-Straight Line Method
- Methods of Depreciation-Written Down Value Method
- Accounting Treatment of Depreciation-By Charging to Asset Account
- Accounting Treatment of Depreciation-By Creating Provision for Depreciation
- Accounting Treatment of Depreciation-Accumulated Depreciation Account
- Accounting Treatment of Depreciation-Treatment of Disposal of Asset
- Provisions and Reserves
- Meaning and Objectives
- Difference Between Provisions and Reserves
- Types of Reserves-Revenue Reserve
- Types of Reserves-Capital Reserve
- Types of Reserves-General Reserve
- Types of Reserves-Specific Reserves
- Promissory Note
- Important Terms of Bills of Exchange - Term of Bill
- Important Terms of Bills of Exchange - Due Date
- Important Terms of Bills of Exchange - Days of Grace
- Important Terms of Bills of Exchange - Date of Maturity
- Important Terms of Bills of Exchange - Discounting of Bill,
- Important Terms of Bills of Exchange - Endorsement of Bill
- Important Terms of Bills of Exchange - Bill Sent for Collection
- Important Terms of Bills of Exchange - Dishonor of Bill
- Important Terms of Bills of Exchange - Noting of Bill
- Important Terms of Bills of Exchange - Retirement and Renewal of a Bill
- Accounting Treatment of Bill Transactions
Recording of Transactions
• Accounting equation: analysis of transactions using accounting equation.
• Rules of debit and credit: for assets, liabilities, capital, revenue and expenses.
• Origin of transactions- source documents/ supporting vouchers (invoice, cash memo, pay in slip, cheque), debit note, credit note, preparation of accounting vouchers - cash (debit and credit) and non cash (transfer).
• Books of original entry: format and recording - Journal.
• Cash book: simple cash book and cash book with bank col u m n petty cash book.
• Other books: purchases book, sales book, purchases returns book, sales returns book and journal proper. Preparation of Bank Reconciliation Statement, Ledger and Trial Balance
• Bank reconciliation statement- concept calculating bank balance at an accounting date: need and preparation. Corrected cash book balance.
• Ledger - format, posting from journal, cash book and other special purpose books, balancing of accounts.
• Trial balance: objectives and preparation (Scope: Trial balance with balance method only)Depreciation, Provisions and Reserves.
• Depreciation: concept, need and factors affecting depreciation; methods of computation of depreciation: straight line method, written
•down value method (excluding change in method)
• Accounting treatment of depreciation: by charging to asset account, by creating provision for depreciation/ accumulated depreciation account, treatment of disposal of asset.
• Provisions and reserves: concept, objectives and difference between provisions and reserves; types of reserves- revenue reserve, capital reserve, general reserve and specific reserves.
Accounting for BUls of Exchange. 16 Periods
• Bills of exchange and promissory note: definition, features, parties, specimen and distinction.
• Important terms: term of bill, due date, days of grace, date of maturity, discounting of bill, endorsement of bill, bill sent for collection, dishonor of bill, noting of bill, retirement and renewal of a bill.
• Accounting treatment of bill transactions. Rectificatf on of Errors 17 Periods
• Errors: types-errors of omission, commission, principles, and compensating; their effect on Trial Balance.
• Detection and rectification of errors; preparation of suspense account.
- Concept of Financial Statements
- Preparation of Trading Account
- Preparation of Profit and Loss Account
- Gross Profit
- Preparation of Balance Sheet
- Effects of Adjustments-Closing Stock
- Effects of Adjustments-Outstanding Expenses
- Effects of Adjustments-Prepaid Expenses
- Effects of Adjustments-Accrued Income
- Effects of Adjustments-Income Received in Advance
- Effects of Adjustments-Goods Distributed as Free Sample
- Adjustments of Financial Statements - Abnormal Loss
- Effects of Adjustments-Depreciation
- Adjustments of Financial Statements - Goods Taken for Personal Use
- Adjustments of Financial Statements - Goods Distributed as Free Samples and Manager's Commission
- Incomplete Records
- Ascertainment of Profit or Loss by Statement of Affairs Method
- Marshalling of a Balance Sheet Or Assets and Liabilities
- Preparation of Trading and Profit and Loss Account and Balance Sheet of Sole Proprietorship
• Financial statements: objective and importance.
• Trading and Profit and Loss Account, gross profit, operating profit and net profit.
• Balance sheet: need, grouping, marshalling of assets and liabilities.
• Adjustments in preparation of financial statements : with respect to closing stock, outstanding expenses, prepaid expenses, accrued income, income received in advance, depreciation, bad debts, provision for doubtful debts, provision for discount on debtors, abnormal loss, goods taken for personal use, goods distributed as free samples and manager's commission.
• Preparation of Trading and Profit and Loss account and Balance Sheet of sole proprietorship.
• Incomplete records: uses and limitations.
• Ascertainment of profit/loss by statement of affairs method
- Concept of Not-for-profit Organizations
- Feature of Receipts and Payments Account
- Preparation of Receipts and Payments Account
- Difference Between Receipts and Payments Account and Cash Book
- Feature of Income and Expenditure Account
- Preparation of Income and Expenditure Account
- Balance Sheet from the Given Receipts
- Payments Account with Additional Information
• Not-for-profit organizations: concept.
• Receipts and Payments Account: features and preparation.
• Income and Expenditure Account: features, preparation of income and expenditure account and balance sheet from the given receipts and payments account with additional information.
Scope:
(i) Adjustments in a question should not exceed 3 or 4 in number and restricted to subscriptions, consumables and sale of assets I old material.
(ii) Entrance! admission fees and general donations are to be treated as revenue receipts.
(iii) Trading Account of incidental activities is not to be prepared.
- Introduction to Operating Software, Utility Software and Application Software
- Introduction to Computers
- elements, capabilities, limitations of computer system
- Introduction to Accounting Information System (AIS) as a Part of MIS
- Stages in Automation - Accounting Process in a Computerised Environment
- Comparison Between Manual Accounting Process and Computerised Accounting Process
- Stages in Automation - Sourcing of Accounting Software
- Kinds of Software - Readymade Software
- Kinds of Software - Customised Software
- Kinds of Software - Tailor-made Software
- Generic Considerations before Sourcing Accounting Software
- Stages in Automation - Creation of Account Groups and Hierarchy
- Stages in Automation - Generation of Reports - Trial Balance, Profit and Loss Account and Balance Sheet
• Introduction to computer and accounting information system {AIS}: Introduction to computers (elements, capabilities, limitations of computer system),
• Introduction to operating software, utility software and application software. Introduction to accounting information system (AIS) as a part of MIS
• Automation of accounting process: meaning
• Stages in automation: (a) Accounting process in a computerised environment; comparison between manual accounting process and computerised accounting process, (b) Sourcing of accounting software; kinds of software: readymade software; customised software and tailor-made software; generic considerations before sourcing accounting software (c) creation of account groups and hierarchy ( d) generation of reports - trial balance, profit and loss account and balance sheet.
Scope:
(i) The scope of the unit is to understand accounting as an information system for the generation of accounting information and preparation of accounting reports.
(ii) It is presumed that the working knowledge of any appropriate accounting software will be given to the students to help them learn basic accounting operations on computers. For this, the teachers may refer to Chapter 4 of Class XII NCERT textbook on Computerized Accounting System.