CBSE-2016 Syllabus for Accountancy Classes XI and XII

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 Partnership Firms and Companies are to be taught as a compulsory part. Students will also be given an opportunity to understand further about ComputerizedAccounting System, as an optional course to Analysis of Financial Statements.

Objectives

  • To familiarize 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 and dissolution of partnership firms
  • To enable the students to understand and analyse the financial statements
  • To familiarize students with the fundamentals of computerized system of accounting

Class XI (11th)

One paper 3 Hours and 100 Marks

Part A: Financial Accounting-I

Units

Periods

Marks

Introduction to Accounting

10 Periods

5 Marks

Theory Base of Accounting

14 Periods

7 Marks

Recording of Transactions

18 Periods

9 Marks

Preparation of Ledger, Trial Balance and Bank Reconciliation Statement.

18 Periods

9 Marks

Depreciation, Provision and Reserves

16 Periods

8 Marks

Accounting for Bills of Exchange

16 Periods

8 Marks

Rectification of Errors

14 Periods

7 Marks

Financial statements of sole proprietorship

24 Periods

12 Marks

Total

130 Periods

65 Marks

Part B: Financial Accounting-II

Units

Periods

Marks

Financial statements of not-for-profit organizations

22 Periods

10 Marks

Accounts from incomplete records

14 Periods

5 Marks

Computers inAccounting

22 Periods

10 Marks

Project Work

22 Periods

10 Marks

Total

80 Periods

35 Marks

Class XI Periods

Part A: Financial Accounting-I (Periods 120)

Unit 1: Introduction to Accounting (Periods 10)

Accounting-objectives, advantages and limitations, types of accounting information; users of accounting information and their needs.

Basic accounting terms: Business transaction, account, capital, drawings, liability (internal & external, long term & short term) asset (tangible & intangible, fixed, current, liquid and fictitious) receipts (capital & revenue), expenditure (capital, revenue & deferred), expense, income, profits, gains and losses, purchases, sales, stock, debtors, bills receivable, creditors, bills payable, goods, cost, vouchers, discount-trade and cash.

Unit 2: Theory Base of Accounting (Periods 14)

  • 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.
  • Double entry system.
  • Basis of accounting-cash basis and accrual basis.
  • Accounting standards: Concept & objective. IFRS (International Financial Reporting Standards).

Unit 3: Recording of Transactions- (Periods 18)

  • 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 (invoice, cash memo, pay in slip, cheque), preparation of vouchers-cash (debit & credit) and non cash (transfer).
  • Books of original entry: Format and recording-Journal.
  • Cash book: Simple, cash book with bank column, petty cash book
  • Other books: Purchases book, sales book, purchases returns book, sales returns book, bills receivable book, bills payable book and journal proper.

Unit 4: Preparation of Ledger, Trial Balance and Bank Reconciliation Statement- (Periods 18)

  • Ledger-format, posting from journal, cash book and other special purpose books, balancing of accounts.
  • Trial balance: Objectives and preparation
  • Bank reconciliation statement: Need and preparation. Corrected cash book balance.

Unit 5: Depreciation, Provisions and Reserves- (Periods 16)

  • 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, specific reserves and secret reserves.

Unit 6: Accounting for Bills of Exchange- (Periods 16)

  • 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, bill at sight, bill after date, discounting of bill, endorsement of bill, bill sent for collection, dishonor of bill, noting of bill, retirement and renewal of a bill, insolvency of acceptor.
  • Accounting treatment of bill transactions

Unit 7: Rectification of Errors- (Periods 14)

  • Errors: Types-errors of omission, commission, principles, and compensating; Their effect on Trial Balance.
  • Detection and rectification of errors; preparation of suspense account.

Unit 8: Financial Statements of Sole proprietorship (Periods 24)

  • 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, manager's commission, abnormal loss, goods taken for personal use and goods distributed as free sample.
  • Preparation of Trading and Profit and Loss Account and Balance Sheet of sole proprietorship.

Part B: Financial Accounting-II

Unit 9: Financial Statements of not-for-Profit Organizations (Periods22)

  • Not-for-profit organizations: Concept.
  • Receipts and payment account: Features.
  • Income and expenditure account: Features. Preparation of income and expenditure account and balance sheet from the given receipt and payment account with additional information.

Unit 10: Accounts from Incomplete Records- (Periods 14)

  • Incomplete records: Use and limitations.
  • Ascertainment of profit/loss by statement of affairs method.

Unit 11: Computers in Accounting- (Periods 22)

  • Introduction to Computer and Accounting Information system {AIS}
  • Application of computers in Accounting: Automation of accounting process, designing accounting reports, MIS reporting, data exchange with other information systems.
  • Comparison of accounting process in manual and computerized accounting highlighting advantages and limitations of automation. Sourcing of accounting system: Readymade, customized and tailormade accounting system. Advantages and disadvantages of each option.
  • Accounting and database system
  • Accounting and database Management system.
  • Concept of entity and relationship: Entities and relationships in anAccounting system: Designing and creating simple tables, forms, and reports in the context of accounting system.

Unit 12: Project Work (Any One) - (Periods 22)

  1. Collection of Source Documents, Preparation of Vouchers, Recording of Transactions with the help of vouchers.
  2. Preparation of Bank Reconciliation Statement with the help of given Cash book and Pass book.
  3. Project Work on any Windows based Accounting package: Installing & starting the package, setting up a new Company, Setting up account heads, voucher entry, viewing and editing data.

Class XII (12th)

one Paper 3 Hours and 80 Marks

Part A: Accounting for Partnership Firms and Companies

Unit

Periods

Marks

Accounting for Partnership Firms-Fundamentals

20 Periods

10 Marks

Accounting for Partnership Firms-Reconstitution and Dissolution

52 Periods

25 Marks

Accounting for Share Capital

38 Periods

18 Marks

Accounting for Debentures

14 Periods

7 Marks

total

124 Periods

60 Marks

Part B: Financial Statement Analysis

Unit

Periods

Marks

Analysis of Financial Statements

24 Periods

12 Marks

Cash Flow Statement

20 Periods

8 Marks

Project Work

42 Periods

20 Marks

Project Work-Unit 1: Project File-4 marks

Project Work-Unit 2: Written Test-12 marks (one hour)

Project Work-Unit 3: Viva Voce-4 marks

OR

86 Periods

40 Marks

Part C: Computerized Accounting

Unit

Periods

Marks

Overview of ComputerizedAccounting System

12 Periods

4 Marks

Accounting Applications of Electronic Spread sheet

24 Periods

6 Marks

Using ComputerizedAccounting System

12 Periods

4 Marks

Data Base Management System

12 Periods

6 Marks

Practical Work

26 Periods

20 Marks

Practical Work-Unit 1: File-4 marks

Practical Work-Unit 2: Practical Examination-2 marks (one hours)

Practical Work-Unit 3: Viva Voce-4 marks

Total

86 Periods

40 Marks

Class XII

PART A: Accounting for Partnership Firms and Companies

Unit 1. Accounting for Partnership firms-Fundamentals

  • Partnership: Features, Partnership deed.
  • Provisions of the Indian Partnership Act 1932 in the absence of partnership deed.
  • Fixed v/s fluctuating capital accounts, division of profit among partners, guarantee of profits, past adjustments (relating to interest on capital, interest on drawing, salary and profit sharing ratio), preparation of P&L Appropriation account.
  • Goodwill: Nature, factors affecting and methods of valuation-average profit, super profit, and capitalization

Unit 2. 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 distribution of reserves and accumulated 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 of liabilities, treatment of reserves and accumulated profits, adjustment of capital accounts and preparation of balance sheet
  • Retirement and death of a partner: Effect of retirement/death of a partner on change in profit sharing ratio, treatment of goodwill, treatment for revaluation of assets and re-assessment of liabilities, adjustment of accumulated profits and reserves. 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 partnership firms: Types of dissolution of firm. Settlement of accounts-preparation of realization account, and other related accounts (excluding piecemeal distribution, sale to a company and insolvency of partner's firm).

Accounting 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 par and at premium and at discount, calls in advance and arrears, issue of shares for consideration other than cash.
  • Accounting treatment of forfeiture and re-issue of shares.
  • Disclosure of share capital in company's Balance Sheet only.

Unit 4. Accounting for Debentures

  • Debentures: Issue of debentures at par, at premium and at discount. Issue of debentures for consideration other than cash, debentures as collateral security, interest on debentures
  • Redemption of debentures: Lump sum, draw of lots and conversion.

PART B: Financial Statement Analysis

Unit5. Analysis of financial Statements

  • Financial statements of a company: Balance sheet of a company in the prescribed form with major headings and sub headings (as per schedule VI to the Companies Act 1956).
  • Financial StatementAnalysis: Objectives and limitations.
  • Tools for Financial StatementAnalysis: Comparative statements, common size statements, cash flow analysis, ratio analysis.
  • Accounting Ratios: Objectives and classification.
  • Liquidity ratios: Current ratio and quick ratio.
  • Solvency Ratios: Debt to Equity Ratio, Total Asset to Debt Ratio, Proprietary Ratio, Interest Coverage Ratio.
  • Activity ratios: Stock Turnover Ratio, Debtors Turnover Ratio, Creditors Turnover Ratio, Working Capital Turnover Ratio.
  • Profitability Ratios: Gross Profit Ratio, Operating Ratio, Operating Profit Ratio, Net Profit Ratio and Return on Investment.

Unit 6. Cash Flow Statement

  • Meaning, objectives and preparation (as per AS 3 revised) (Indirect Method)

Unit7. Project work

  • Kindly refer to the Guidelines published by the CBSE.

OR

Part C: Computerised Accounting

Unit 5 Overview of Computerised Accounting System

  • Introduction: Application inAccounting
  • Features of ComputerisedAccounting System
  • Structure of CAS
  • Software Packages:
  • Generic
  • Specific
  • Tailored

Unit 6 Accounting Application of Electronic Spread Sheet

  • Concept of Electronic Spreadsheet
  • Features offered by Electronic Spreadsheet
  • Application in GeneratingAccounting Information I
  • Payroll
  • Data Presentation
  • Graphs, Charts and Diagrams

Unit 7 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

Unit 8 Database Management System (DBMS)

  • Concept and Features of DBMS
  • DBMS in BusinessApplication
  • GeneratingAccounting Information 1
  • Payroll
  • GeneratingAccounting Information 2
  • Debtors and Creditors
  • Bank Reconciliation Statement
  • AssetAccounting
  • InventoryAccounting

Unit 9. Practical Work

  • Please refer to the guidelines published by CBSE.