Accountancy Class 12 Syllabus

The syllabus consists of two parts: (A) Accounting for Partnership Firms and Companies (B) Financial Statement Analysis or Computerized Accounting.

Exam Structure

Units  Chapters Marks 
Part A  Accounting for Partnership Firms and Companies 60
Unit 1 Accounting for Partnership Firms 36
Unit 2 Accounting for Companies 24
Part B Financial Statement Analysis 20
Unit 3 Analysis of Financial Statements 12
Unit 4 Cash Flow Statement 8
Part B Computerized Accounting 20
Unit 4 Computerized Accounting 20

Unit 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 and Loss Appropriation account - division 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.

Note: Interest on partner's loan is to be treated as a charge against profits.

Goodwill: meaning, factors affecting, need for valuation, methods for calculation (average profits, super profits and capitalization) , adjusted through partners capital/ current account or by raising and writing off goodwill (AS 26)

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 reassessment of liabilities and treatment of reserves and accumulated profits. Preparation of revaluation account and balance sheet.

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 reassessment of liabilities, treatment of reserves, accumulated profits and losses, adjustment of capital accounts and preparation of capital, current account and balance sheet.

Retirement and death of a partner: effect of retirement / death of a partner on change in profit sharing ratio, treatment of goodwill (as per AS 26), treatment for revaluation of assets and reassessment of liabilities, adjustment of accumulated profits, losses and reserves, adjustment of capital accounts and preparation of capital, current account and 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 and his executor’s account.

Dissolution of a partnership firm: meaning of dissolution of partnership and partnership firm, types of dissolution of a firm. Settlement of accounts - preparation 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)).

Unit 2: Accounting for Companies

Accounting for Share Capital

Features and types of companies

Share and share capital: nature and types.

Accounting for share capital: issue and allotment of equity and preferences shares. Public subscription of shares - over subscription and under subscription of shares; issue at par and at premium, calls in advance and arrears (excluding interest),
issue of shares for consideration other than cash.

Concept of Private Placement and Employee Stock Option Plan (ESOP), Sweat Equity. 

Accounting treatment of forfeiture and re-issue of shares.

Disclosure of share capital in the Balance Sheet of a company.

Accounting for Debentures

Debentures: Meaning, types, 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 collateral security-concept, interest on debentures. Writing off discount / loss on issue of debentures.

Unit 3: Analysis of Financial Statements

Financial statements of a company: Meaning, Nature, Uses and importance of financial Statement. Statement of Profit and Loss and Balance Sheet in prescribed form with major headings and sub headings (as per Schedule III to the Companies Act, 2013)

Financial Statement Analysis: Meaning, Significance Objectives, importance and limitations.

Tools for Financial Statement Analysis: Cash flow analysis, ratio analysis.

Accounting Ratios: Meaning, Objectives, Advantages, 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 Coverage Ratio. Debt to Capital Employed Ratio.

Activity Ratios: Inventory Turnover Ratio, Trade Receivables Turnover Ratio, Trade Payables Turnover Ratio, Fixed Asset
Turnover Ratio, Net Asset Turnover Ratio and Working Capital Turnover Ratio.  

Profitability Ratios: Gross Profit Ratio, Operating Ratio, Operating Profit Ratio, Net Profit Ratio and Return on Investment.

Unit 4: Cash Flow Statement

Meaning, objectives Benefits, Cash and Cash Equivalents, Classification of Activities and preparation (as per AS 3 (Revised) (Indirect Method only)

Part B / Unit 4: 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 accounting; 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.