CBSE Class 12 Accountancy

Our content provided above has been checked by senior commerce teachers with over 20 years of experience in board evaluation. We understand exactly where students lose marks from missing marrations in Journal entries to incorrect working notes.

Examiners are now using On-Screen Marking (OSM). For your answer sheet to be clear:
a) Use a sharp pencil and scale for drawing Ledger Formats.
b) Always include Working Notes as they carry up to 25% of the total marks for a numerical question.
c) Highlight the final answer (e.g., Cash Flow from Operating Activities = XXX) in a box.

Success in Class 12 Accountancy is the first major milestone for any aspiring CA, CS, or CMA professional. Our content provided above ensures that your basics are strong enough to manage university level commerce subjects and competitive entrance exams like CUET. Students should focus on the latest Competency Based pattern so that you can develop critical thinking skills required in modern financial world. You should also stay consistent with your practice and use our interactive mock tests. Remember, a perfect score in Accountancy is not just about the numbers as there is a logic behind every journal entry.

Unit 1: Accounting for Partnership Firms (36 Marks)

• 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: meaning, 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.
• 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 re-assessment 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)).
• Note: (i) If the realized value of tangible assets is not given it should be considered as realized at book value itself. (ii) If the realized value of intangible assets is not given it should be considered as nil (zero value). (iii) In case, the realization expenses are borne by a partner, clear indication should be given regarding the payment thereof.

This unit covers the accounting intricacies of partnership firms, including profit distribution, reconstitution due to changes in partnership, and the eventual dissolution of the firm.

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 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 (concept of TDS is excluded). 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).

This unit introduces company accounting, specifically the procedures for issuing, forfeiting, and reissuing shares, as well as the issuance and redemption of debentures.

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 and sub 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: Comparative statements, common size statements, Ratio analysis, Cash flow 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.

Focusing on the interpretation of corporate financial data, this unit teaches students to analyze company performance using ratios and comparative statements as per the Companies Act 2013.

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).
• Note: (i) Adjustments relating to depreciation and amortization, profit or loss on sale of assets including investments, dividend (both final and interim) and tax. (ii) Bank overdraft and cash credit to be treated as short term borrowings. (iii) 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.

This unit details the preparation of the Cash Flow Statement, helping students understand how cash is generated and utilized across different business activities.

Part C: Project Work (20 Marks)

• One specific project based on financial statement analysis of a company covering any two aspects from the following:
• 1. Comparative and common size financial statements
• 2. Accounting Ratios
• 3. Segment Reports
• 4. Cash Flow Statements

OR

Part B: Computerised Accounting (20 Marks)

• 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.

The final component allows students to specialize in either in-depth financial analysis of a company or the application of computerized accounting systems in modern business environments.