Accountancy

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Strictly Based on the Latest Syllabus issued by CBSE Board for 2015 Examination

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Includes Compartment (Solved) Paper - 2014

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CONTENTS

Syllabus v - viii

Compartment (Solved) Paper, 2014 1 - 39

PART - A : Accounting for Partnership firms and Companies

Unit 1 : Accounting For Partnership Firms

1. Accounting for Partnership Firms 1 - 23

2. Reconstitution and Dissolution 24 - 34

3. Admission of a Partner 35 - 64

4. Retirement & Death of a Partner 65 - 98

5. Dissolution of Partnership Firm 99 - 127

Unit 2 : Accounting for Companies

6. Accounting for Share Capital 128 - 184

7. Accounting for Debentures 185 - 222

PART - B : Financial Statement Analysis

Unit 3 : Analysis of Financial Statements

8. Financial Statements 223 - 230

9. Analysis of Financial Statement 231 - 234

10. Tools for Financial Analysis 235 - 250

11. Accounting Ratios 251 - 271

Unit 4 : Cash Flow Statement

12. Cash Flow Statements 272 - 304

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PREFACE

Class 12

( v )

SYLLABUSAccountancy (Code No. 055)

Class–XII (2014-15)One Paper Theory: 80 Marks

3 Hours

Units Periods MarksPart A Accounting for Partnership Firms and Companies

Unit 1. Accounting for Partnership Firms 90 35Unit 2. Accounting for Companies 60 25

150 60Part B Financial Statement Analysis

Unit 3. Analysis of Financial Statements 30 12Unit 4. Cash Flow Statement 20 8

50 20Part C Project Work 40 20

Project work will include:Project File: 4 MarksWritten Test: 12 Marks (One Hour)Viva Voce: 4 Marks OR

Part B Computerized AccountingUnit 3. Computerized Accounting 60 20

Part C Practical Work 26 20Practical work will include:File 4 MarksPractical Examination 12 Marks (One Hour)Viva Voce 4 Marks

Part A: Accounting for Partnership Firms and Companies 60 Marks 150 PeriodsUnit 1: Accounting for Partnership Firms

• Partnership: features, Partnership deed.• Provisions of the Indian Partnership Act 1932 in the absence of partnership deed.• Fixed v/s fluctuating capital accounts.Preparation of Profit & Loss Appropriation account- divi-

sion of profit among partners, guarantee of profits.• Past adjustments (relating to interest on capital, interest on drawing, salary and profit sharing

ratio).• Goodwill: nature, factors affecting and methods of valuation - average profit, super profit and

capitalization.Scope: Interest on partner’s loan is to be treated as a charge against profits.Accounting for Partnership firms - Reconstitution and Dissolution.• Change in the Profit Sharing Ratio among the existing partners - sacrificing ratio, gaining ratio.

Accounting for revaluation of assets and re-assessment of liabilities and treatment of reserves andaccumulated profits.

• Admission of a partner - effect of admission of a partner on change in the profit sharing ratio,treatment of goodwill (as per AS 26), treatment for revaluation of assets and re - assessment ofliabilities, treatment of reserves and accumulated profits, adjustment of capital accounts andpreparation of balance sheet.

• Retirement and death of a partner: effect of retirement /death of a partner on change in profitsharing ratio, treatment of goodwill (as per AS 26), treatment for revaluation of assets and re -assessment of liabilities, adjustment of accumulated profits and reserves, adjustment of capitalaccounts and preparation of balance sheet. Preparation of loan account of the retiring partner.– Calculation of deceased partner’s share of profit till the date of death. Preparation of deceased

partner’s capital account, executor’s account and preparation of balance sheet.• Dissolution of a partnership firm: types of dissolution of a firm. Settlement of accounts - prepara-

tion of realization account, and other related accounts: Capital accounts of partners and Cash/Bank A/c(excluding piecemeal distribution, sale to a company and insolvency of partner(s)).

Note:(i) If value of asset is not given, its realised value should be taken as nil.(ii) In case, the realisation expenses are borne by a partner, clear indication should be given regarding

the payment thereof.(iii) Workmen Compensation Fund is to be discussed.

Unit -2 Accounting for CompaniesAccounting for Share Capital• Share and share capital: nature and types.• Accounting for share capital: issue and allotment of equity shares, private placement of shares,

Public subscription of shares - over subscription and under subscription of shares; Issue at parand at premium and at discount, calls in advance and arrears (excluding interest), issue of sharesfor consideration other than cash.

• Accounting treatment of forfeiture and re-issue of shares.• Disclosure of share capital in company’s Balance Sheet.Accounting for Debentures• Debentures: Issue of debentures at par, at a premium and at a discount. Issue of debentures for

consideration other than cash; Issue of debentures with terms of redemption; debentures as collat-eral security-concept, interest on debentures.

• Redemption of debentures: Lump sum, draw of lots and purchase in the open market (excludingexinterest and cum-interest). Creation of Debenture Redemption Reserve.

Part B: (i) Financial Statement Analysis 20 Marks 50 PeriodsUnit 3: Analysis of Financial Statements

• Financial statements of a company: Statement of Profit and Loss and Balance Sheet in the pre-scribed form with major headings and sub headings (as per Schedule VI to the Companies Act,1956).Scope: Exceptional Items, Extraordinary Items and Profit (loss) from Discontinued Operations areexcluded.

• Financial Statement Analysis: Objectives and limitations.• Tools for Financial Statement Analysis: Comparative statements, common size statements, cash

flow analysis, ratio analysis.• Accounting Ratios: Objectives, classification and computation.Liquidity Ratios: Current ratio and Quick ratio.Solvency Ratios: Debt to Equity Ratio, Total Asset to Debt Ratio, Proprietary Ratio and Interest Cover-age Ratio.Activity Ratios: Inventory Turnover Ratio, Trade Receivables Turnover Ratio, Trade Payables TurnoverRatio and Working Capital Turnover Ratio.Profitability Ratios: Gross Profit Ratio, Operating Ratio, Operating Profit Ratio, Net Profit Ratio andReturn on Investment.Scope: As ratio analysis is a managerial tool, for the computation of profitability ratios, relevant informationshould be specified whether it is a part of Statement of Profit and Loss as per Schedule VI or not.

( vi )

Unit 4: Cash Flow Statement• Meaning, objectives and preparation (as per AS 3 (Revised) (Indirect Method only)Scope:(i) Adjustments relating to depreciation and amortisation, profit or loss on sale of assets including invest-

ments, dividend (both final and interim) and tax.(ii) Bank overdraft and cash credit to be treated as short term borrwings.(iii) Current Investments to be taken as Marketable securities unless otherwise specified.

PROJECT WORK 20 Marks 40 PeriodsKindly refer to the Guidelines published by the CBSE.

ORPart B: Computerised Accounting 20 Marks 60 PeriodsUnit 3: Computerised Accounting

Overview of Computerised Accounting System.• Introduction: Application in Accounting.• Features of Computerised Accounting System.• Structure of CAS.• Software Packages: Generic; Specific; Tailored.Accounting Application of Electronic Spreadsheet.• Concept of Electronic Spreadsheet.• Features offered by Electronic Spreadsheet.• Application in Generating Accounting Information - Bank Reconciliation Statement; Asset Ac-

counting; Loan Repayment of loan schedule, Ratio Analysis• Data Representation- Graphs, Charts and Diagrams.Using Computerized Accounting System.• Steps in installation of CAS, codification and Hierarchy of account heads, creation of accounts.• Data: Entry, Validation and Verification.• Adjusting entries, preparation of balance sheet, profit and loss account with closing entries and

opening entries.• Need and security features of the system.Database Management System (DBMS)• Concept and Features of DBMS.• DBMS in Business Application.• Generating Accounting Information - Payroll.

Part C : Practical Work 20 Marks 26 PeriodsPlease refer to the guidelines published by CBSE.

Prescribed Books:Financial Accounting -I Class XI NCERT PublicationAccountancy -II Class XI NCERT PublicationAccountancy -I Class XII NCERT PublicationAccountancy -II Class XII NCERT Publication

( vii )

Suggested Question Paper Design Accountancy (Code No. 055)

Class XII (2014-15) March 2015 Examination

One Paper Theory: 80 Marks Duration: 3 hrs.

S. No.

Typology of Questions Very Short

Answer MCQ

1 Mark

Short

Answer I

3 Marks

Short

Answer II

4 Marks

Long Answer I

6 Marks

Long Answer

II

8 Marks

Marks

%

1. Remembering- (Knowledge based Simple recall questions, to know specific facts, terms, concepts, principles, or theories; Identify, define, or recite, information)

3 1 2 1 - 20 25

2. Understanding- (Comprehension –to be familiar with meaning and to understand conceptually, interpret, compare, contrast, explain, paraphrase, or interpret information)

2 - 1 1 1 20 25

3. Application (Use abstract information in concrete situation, to apply knowledge to new situations; Use given content to interpret a situation, provide an example, or solve a problem)

- 2 1 1 - 16 20

4. High Order Thinking Skills (Analysis & Synthesis- Classify, compare, contrast, or differentiate between different pieces of information; Organize and/or integrate unique pieces of information from a variety of sources)

2 - 1 1 1 16 20

5. Evaluation and Multi-Disciplinary- (Appraise, judge, and/or justify the value or worth of a decision or outcome, or to predict outcomes based on values)

1 1 1 - - 08 10

TOTAL

8x1=8 4x3=12 5x4=20 4x6=24 2x8=16 80(23)

+20 Projects

100

( viii )

Time allowed: 3 hours ] [ Maximum Marks : 80

GENERAL INSTRUCTIONS

(i) This question paper contains three parts A, B and C. (i) Part A is compulsory for all candidates. (i) Candidates can attempt only one part of the remaining parts B and C. (i) All parts of the questions should be attempted at one place.

Delhi Set 1 Code : 67/1/1

PART – A (Accounting for Partnership Firms and Companies)

1. The partnership deed is silent on payment of salary to partners. Amita, a partner, claimed that since she managed the business, she should get a monthly salary of ` 10,000. Is she entitled for the salary ? Give reason. 1

2. Under what circumstance will the premium for goodwill paid by the incoming partner not be recorded in the books of accounts ? 1

3. Name the asset that is not transferred to the debit side of Realisation account, but brings certain amount of cash against its disposal at the time of dissolution of the firm. 1

4. What is meant by private placement of shares ? 1

5. P, Q and R were partners in a firm sharing profits in the ratio of 5 : 4 : 3 respectively. Their capitals were ` 50,000, ̀ 40,000 and ` 30,000 respectively. State the ratio in which the goodwill of the firm, amounting to ` 6,00,000, will be adjusted in the capital accounts of the remaining partners on the retirement of Q. 1

6. At what rate, interest on calls-in-advance is paid by the company according to Table A of Companies Act, 1956 ? 1

7. What is meant by ‘Debenture’ ? 1

8. A business earned average profits of ̀ 6,00,000 during the last few years. The normal rate of profits in the similar type of business is 10%. The total value of assets and liabilities of the business were ` 22,00,000 and ` 5,60,000 respectively. Calculate the value of goodwill of the firm by super profit method if the goodwill is valued at 2½ years’ purchase of super profits. 3

9. Sargam Ltd. issued ` 1,00,000 6% debentures of ` 10 each at a permium ` 2 per debenture on 1st April, 2012. The issue was fully subscribed. Interest will be paid at the end of each financial year. Pass necessary journal entries for the year 2012-13. 3

10. Maharana Ltd’s main business is manufacturing of tyres. The company is very particular about the observation of the provisions of the Companies Act and SEBI guidelines. On 1st April, 2010 the company issued ̀ 18,00,000, 8% debentures of ̀ 100 each. The debentures were redeemed. Since the manufacturing of tyres results in air pollution, the company had installed a plant for its effective control.

Pass necessary journal entries for the redemption of debentures. Also identify the value observed by Maharana Ltd. It is assumed that the company has adequate balance in Debenture Redemption Reserve Account. 3

Compartment 2014Accountancy (Delhi & Outside Delhi)

Class XIISOLVEDPAPER

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