CBSE Releases Class 12 Accountancy Syllabus 2022-23
Central Board of Secondary Education (CBSE) has released the Class 12 Accountancy syllabus 2022-23 on their official website. Accountancy is introduced in class 11 and continues in 12. Accountancy is important for commerce students as it helps them to understand the business and financial processes.
CBSE Class – 12
Accountancy (Code No. 055)
Theory: 80 Marks
Project: 20 Marks
Time: 3 Hours
CBSE Class 12 Accountancy Syllabus 2022-23
Part A: Accounting for Partnership Firms and Companies (60 Marks)
Unit 1: Accounting for Partnership Firms (36 Marks)
Partnership: features, Partnership Deed.
- Provisions of the Indian Partnership Act 1932 in the absence of a partnership deed.
- Fixed v/s fluctuating capital accounts. Preparation of Profit and Loss Appropriation account- a division of profit among partners, a guarantee of profits.
- Past adjustments (relating to interest on capital, interest on drawing, salary and profit-sharing ratio).
- Goodwill: meaning, nature, factors affecting and methods of valuation – average profit, super profit and capitalization.
Note: Interest on a 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, accumulated profits and losses.
- 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)).
- If the realized value of tangible assets is not given it should be considered as realized at book value itself.
- If the realized value of intangible assets is not given it should be considered as nil (zero value).
- In case, the realization expenses are borne by a partner, clear indication should be given regarding the payment thereof.
Unit-2 Accounting for Companies (24 Marks)
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 reissue 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.
Note: Discount or loss on issue of debentures to be written off in the year debentures are allotted from Security Premium Reserve (if it exists) and then from Statement of Profit and Loss as Financial Cost (AS 16).
Part B: Financial Statement Analysis (20 Marks)
Unit 3: Analysis of Financial Statements (12 Marks)
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 (as per Schedule III to the Companies Act, 2013)
Note: Exceptional items, Extraordinary items and profit (loss) from discontinued operations are excluded.
- 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.
Note: Net Profit Ratio is to be calculated on the basis of profit before and after tax.
Unit 4: Cash Flow Statement (8 Marks)
Meaning, objectives Benefits, Cash and Cash Equivalents, Classification of Activities and preparation (as per AS 3 (Revised) (Indirect Method only).
- Adjustments relating to depreciation and amortization, profit or loss on sale of assets including investments, dividend (both final and interim) and tax.
- Bank overdraft and cash credit to be treated as short term borrowings.
- Current Investments to be taken as Marketable securities unless otherwise specified.
Note: Previous years’ Proposed Dividend to be given effect, as prescribed in AS-4, Events occurring after the Balance Sheet date. Current years’ Proposed Dividend will be accounted for in the next year after it is declared by the shareholders.
Part C: Project Work (20 Marks)
Note: Kindly refer to the Guidelines published by the CBSE.
The comprehensive project may contain simple GST calculations.
Project work will include:
- Project File: 4 Marks
- Written Test: 12 Marks (One Hour)
- Viva Voce: 4 Marks
Part B: Computerised Accounting
Unit 4: Computerised Accounting (20 Marks)
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.
Part C: Practical Work (20 Marks)
Note: Kindly refer to the Guidelines published by the CBSE.
Practical work will include:
- Practical File 4 Marks
- Practical Examination 12 Marks (One Hour)
- Viva Voce 4 Marks