ACCOUNTANCY
Course Content
Accounting for Partnership Firms and Companies
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 accountdivision
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.
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 (as per AS 26), treatment for revaluation of assets and re -
assessment of liabilities, adjustment of accumulated profits and reserves, adjustment of capital
accounts 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 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)).
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 there of.
Accounting for Companies
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 (excluding interest), 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.
Accounting for Debentures
- Debentures: Issue of debentures at par, at premium and at discount. Issue of debentures for
consideration other than cash; Issue of debentures with terms of redemption; debentures as collateral
security-concept, interest on debentures.
- Redemption of debentures: Lump sum, draw of lots and purchase in the open market (excluding
ex-interest and cum-interest).
Financial Statement Analysis
Analysis of Financial Statements
- Financial statements of a company: Statement of Profit and Loss and Balance Sheet in the
prescribed 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
are excluded.
- 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
Coverage Ratio.
- Activity Ratios: Stock Turnover Ratio, Debtors Turnover Ratio, Creditors Turnover Ratio and Working
Capital Turnover Ratio.
- Profitability Ratios: Gross Profit Ratio, Operating Ratio, Operating Profit Ratio, Net Profit Ratio and
Return on Investment.
Cash Flow Statement
- Meaning, objectives and preparation (as per AS 3 (Revised) (Indirect Method only)
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.
Database Management System (DBMS)
- Concept and Features of DBMS.
- DBMS in Business Application.
- Generating Accounting Information - Payroll.