Courses of Studies 2011

Class : 11th & 12th

19. ACCOUNTANCY (Code No. 055)

Rationale

The course in Accountancy is introduced at + 2 stage of Senior Secondary education, as formal commerce education is provided after first ten years of schooling. With the fast changing economic scenario and business environment in a state of continuous flux, elementary business education along with accountancy as the language of business and as a source of financial information has carved out a place for itself at the Senior Secondary stage. Its syllabus content should give students a firm foundation in basic accounting principles and methodology and also acquaint them with the changes taking place in the presentation and analysis of accounting information, keeping in view the development of accounting standards and use of computers.

Against this background, the course puts emphasis on developing basic understanding about the nature and purpose of the accounting information and its use in the conduct of business operations. This would help to develop among students logical reasoning, careful analysis and considered judgement.

Accounting as an information system aids in providing financial information. The emphasis at Class XI is placed on basic concepts and process of accounting leading to the preparation of accounts for a sole proprietorship firm. Computerised accounting is becoming more and more popular with

increasing awareness about use of computers in business. Keeping this in view, the students are exposed compulsorily to the basic knowledge about computers and its use in accounting in the same year.

In class XII, Accounting for Not for Profit Organisations, Partnership Firms and companies are to be taught as a compulsory part. Students will also be given an opportunity to understand further about Computerized Accounting System, as an optional course to Analysis of Financial Statements.

Objectives :

To familiarise the students with accounting as an information system;

To acquaint the students with basic concepts of accounting and accounting standards;

To develop the skills of using accounting equation in processing business transactions;

To develop an understanding about recording of business transactions and preparation of financial statements;

To enable the students with accounting for reconstitution of partnership firms;

To enable the students to understand and analyse the financial statements; and

To familiarize students with the fundamentals of computerized system of accounting.

CLASS XI

One Paper                          3 Hours                          100 Marks

Part A : Financial Accounting-I

1. Introduction to Accounting                                                   14 Periods           7 Marks

2. Theory Base of Accounting                                                    14 Periods           7 Marks

3. Recording of Business Transactions                                        26 Periods        16 Marks

4. Trial Balance and Rectification of Errors                                 22 Periods          8 Marks

5. Depreciation, Provision and Reserves                                    22 Periods         12 Marks

6. Accounting for Bills of Exchange Transactions                       22 Periods          10 Marks

Part B: Financial Accounting-II

7. Financial statements                                                             35 Periods           22 Marks

8. Accounts from incomplete records                                       15 Periods             8 Marks

9. Computers in Accounting                                                     18 Periods             6 Marks

10. Accounting and Database System                                       18 Periods             4 Marks

CLASS XI

Part A: Financial Accounting – I                                    (Periods 120)

Unit 1: Introduction to Accounting                               (Periods 14)

Accounting- meaning, objectives, Accounting as source of information, internal and external users of Accounting information and their needs.

Qualitative characteristics of Accounting information-reliability, relevance, understandability and comparability.

Basic Accounting Terms - Asset, Liability, Capital, Expense, Income, Expenditure, Revenue, Debtors, Creditors, Goods, Cost, Stock, Purchase, Sales, Profit, Loss, Gain, Voucher, Discount, Transaction, Drawings.

Unit 2: Theory Base of Accounting                            (Periods 14)

Accounting Principles - meaning and nature

Accounting Concepts: Entity, Money Measurement, Going Concern, Accounting Period, Cost Concept, Dual Aspect, Revenue Recognition (Realisation), Matching, Accrual, Full Disclosure, Consistency, Conservatism, Materiality

Accounting Standards- Concept

Process of accounting-from recording of business transactions to preparation of trial balance.

Bases of Accounting - Cash Basis, Accrual Basis

Unit 3: Recording of Business Transactions                (Periods 26)

Voucher and Transactions: Origin of Transactions-Source Documents and Vouchers, preparation of Accounting vouchers; Accounting Equation Approach - Meaning and Analysis of transactions using Accounting Equation, Rules of Debit and Credit.

Recording of Transactions: Books of original entry - Journal, Special Purpose Books: i) Cash Book - Simple, Cashbook with Bank column and Petty Cashbook, ii) Purchases Book, Sales Book, Purchase Returns Book, Sales Returns Book; Ledger-meaning, utility, format; posting from Journal and Subsidiary books; Balancing of Accounts.

Bank Reconciliation Statement: Meaning, Need and Preparation, Corrected Cash Book Balance

Unit 4: Trial Balance and Rectification of Errors            (Periods 22)

Trial Balance: meaning, objectives and preparation.

Errors: Types of Errors: Errors of omission, commission, principles and compensating errors affecting Trial Balance; errors not affecting Trial Balance.

Detection and Rectificition of Errors (One Sided and Two Sided); use of Suspense Account.

Unit 5: Depreciation, Provisions and Reserves                (Periods 22)

Depreciation: Meaning and need for charging depreciation, factors affecting depreciation, methods of depreciation-Straight Line method, Written Down Value method (excluding change in method), Method of recording depreciation-charging to asset account, creating provision for depreciation/accumulated depreciation account; Treatment of disposal of asset.

Provisions and Reserves: meaning, importance, difference between Provisions and Reserves, types of Reserves: Revenue Reserve, Capital Reserve, General Reserve, Specific Reserve and Secret Reserves.

Unit 6: Accounting for Bills of Exchange Transactions    (Periods 22)

Bills of exchange and Promissory Note: definition, features, parties, specimen and distinction.

Important Terms: Term of Bill, Days of Grace, Date of Maturity, Bill at Sight, Negotiation, Endorsement, Discounting of Bill, Dishonour, Retirement and Renewal of a Bill.

Accounting treatment of trade bills.

Accomodation bills : concept and elementary accounting treatment.

Part B: Financial Accounting – II                                   (Periods 104)

Unit 7: Financial Statements                                         (Periods 35)

Financial statements: meaning and users.

Capital Expenditure, Revenue expenditure and Deferred Revenue Expenditure

Trading and Profit and Loss Account: Gross Profit, Operating and net profit.

Balance Sheet: need, grouping and marshalling of Assets and Liabilities. Vertical and Horizontal Presentation of Financial Statements.

Preparation of Trading and Profit & Loss Account and Balance Sheet of sole proprietorship.

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, manager's commission.

Unit 8: Accounts from incomplete records                (Periods 15)

Incomplete records : meaning, uses and limitations. Ascertainment of profit/loss by statement of affairs method, conversion method.

Unit 9: Computers in Accounting                              (Periods 18 )

Introduction to Computer and Accounting Information System (AIS)

Applications of computers in accounting:

- Automation of accounting process, designing accounting reports, MIS reporting, data exchange with other information systems

Comparison of accounting processes in manual and computerized accounting, highlighting advantages and limitations of automation

Sourcing of accounting system: readymade and customized and tailor-made accounting system. Advantages and disadvantages of each option.

Unit 10: Accounting and Database System                     (Periods 18 )

Accounting and Database Management System

Concept of entity and relationship: entities and relationships in an Accounting System: designing and creating simple tables, forms, queries and reports in the context of Accounting System.

Recommended text books

1. Accountancy Part - I, Published by NCERT

2. Accountancy Part - II — do —

CLASS XII

One Paper                        3 Hours                          80 Marks

Part A : Accounting for not for Profit Organisations, Partnership Firms and Companies

1. Accounting for not for profit organizations.                    22 Periods                  10 Marks

2. Accounting for Partnership Firms                                     14 Periods                   5 Marks

3. Reconstitution of Partnership                                          34 Periods                 20 Marks

4. Accounting for Share Capital and Debenture                   54 Periods                 25 Marks

Part B: Financial Statement Analysis

5. Analysis of Financial Statements                                      33 Periods                 12 Marks

6. Cash Flow Statement                                                       33 Periods                   8 Marks

7. Project Work                                                                   18 Periods                  20 Marks

Unit 1 : Project File                4 marks

Unit 2 : Written Test            12 marks (one hour)

Unit 3 : Viva Voce'                  4 marks

Part C: Computerized Accounting

5. Overview of Computerized Accounting System                    12 Periods               5 Marks

6. Accounting using Database Management System (DBMS)     26 Periods               8 Marks

7. Accounting Applications of Electronic Spread sheet            24 Periods               7 Marks

8. Practical Work in Computerized Accounting                         22 Periods             20 Marks

Unit 1 : File                                        4 marks

Unit 2 : Practical Examination          12 marks (one hours)

Unit 3 : Viva Voce'                             4 marks

CLASS XII

Part A: Accounting for Not-For-Profit Organisations, Partnership Firms and Companies.      (Periods 124)

Unit 1: Accounting for Not-for-profit Organisations                (Periods 22)

Meaning and features of not for profit organisations.

Meaning and features of fundbased acccounting.

Receipts and payments Account

Preparation of Income and Expenditure Account and Balance Sheet from Receipt and Payment Account with additional information.

Unit 2: Accounting for Partnership firms                                  (Periods 14)

Nature of Partnership firm, Partnership Deed-meaning, importance.

Partners' Capital Accounts : Fixed vs Fluctuating Capital, Division of Profit among partners, Profit and Loss Appropriation Account including past adjustments.

Unit 3: Reconstitution of Partnership                                     (Periods 34)

Changes in Profit Sharing Ratio among the existing partners-Sacrificing Ratio and Gaining Ratio.

Accounting for Revaluation of Assets and Liabilities and distribution of reserves (Accumulated Profits).

Goodwill: Nature, Factors affecting and methods of valuation: Average profit, Super profit and Capitalisation methods.

Admission of a Partner: Effect of Admission of Partner, Change in Profit Sharing Ratio, Accounting Treatment for Goodwill (as per AS 10), Revaluation of Assets and Liabilities, Adjustment of Capitals.

Retirement/Death of a Partner: Change in Profit Sharing ratio, accounting treatment of Goodwill, Revaluation of Assets and Liabilities, Adjustment of Capitals. Dissolution of a partnership firm. (excluding Garner Vs Murrey and Peace Meal System).

Unit 4: Accounting for Share Capital and Debenture                (Periods 54)

Share Capital: Meaning and Types.

Accounting for share capital: Issue and Allotment of Equity and Preference Shares; public subscription of shares : over subscription and under subscription; issue at par, premium and at discount; calls in advance, calls in arrears, issue of shares for consideration other than cash. Meaning of Private placement of shares and employee stock option plan.

Forfeiture of shares : accounting treatment, re-issue of forfeited shares.

Presentation of Share Capital in company’s Balance Sheet.

Issue of debentures at par; Premium and at discount; writing of discount and loss on issue of debentures; Issue of debentures as collatoral security; issue of debentures for consideration other than cash.

Redemption of debentures; sources : out of profits - debenture redemption reserve; out of capital-methods : lump sum payment, draw by lots, purchase in the open market and conversion (excluding cum-interest and ex-interest).

Part B: Financial Statement Analysis

Unit 5: Analysis of Financial Statements                 (Periods 33)

Financial Statements of a Company: preparation of simple balance sheet of a company in the prescribed form with major headings only.

Financial Statement Analysis: meaning, significance, limitations,

Tools for Financial Statement Analysis: Comparative Statements, Common Size Statements, Accounting Ratios: meaning and objectives, types of ratios:

Liquidity Ratios: Current Ratio, Liquid Ratio

Solvency Ratios: Debt to Equity, Proprietary Ratio

Activity Ratios: Inventory Turnover, Debtors Turnover, Working Capital Turnover, Fixed Assets Turnover,

Profitability Ratio: Gross Profit, Operating, Net Profit, Return on Investment, Earning per Share, Dividend per Share, Price Earning Ratio

Unit 6: Cash Flow Statement                                      (Periods 33)

Cash Flow Statement: Meaning and objectives, preparation, adjustments related to epreciation, dividend and tax, sale and purchase of non-current assets (as per revised tandard issued by ICAI)

Unit 7: Project Work in Accounting                             (Periods 18 )

(Please refer to the guidelines published by the CBSE)

OR

Part C: Computerised Accounting                                 (Periods 84)

Unit 5: Overview of Computerized Accounting System     (Periods 12)

Concept and types of Computerised Accounting System (CAS)

Features of a Computerized Accounting System

Structure of a Computerised Accounting System

Unit 6: Accounting using Database Management System (DBMS)                    (Periods 26)

Concept of DBMS

Objects in DBMS: Tables, Queries, Forms, Reports

Creating data tables for accounting

Using queries, forms and reports for generating accounting information.

Applications of DBMS in generating accounting information such as shareholders’ records, sales reports, customers’ profile, suppliers’ profile, payroll, employees’ profile, petty cash register.

Unit 7: Accounting Applications of Electronic Spreadsheet                    (Periods 24)

Concept of an Electronic Spreadsheet (ES)

Features offered by Electronic Spreadsheet

Applications of Electronic Spreadsheet in generating accounting information, preparing depreciation schedule, loan repayment schedule, payroll accouning and other such applications.

Unit 8: Practical Work in Computerised Accounting                              (Periods 22)

(Please refer to the guidelines published by the CBSE)

Recommended text books

1. Accountancy - I, Publishing by NCERT

2. Accountancy - II, Publishing by NCERT

Please visit for CBSE Board other syllabus (2011) Class 9th & 10th

Please visit for CBSE Board other syllabus (2011) Class 11th & 12th