[ISC] Accounts Syllabus Class 12 (2023-24)
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Don’t worry I have explained the syllabus of Class 12 Accountancy syllabus of the ISC Board for the 2023-24 Session.
Syllabus of Accountancy class 12 ISC Board 2023-24
There will be two papers on the subject. Following are the brief detail.
| Paper – I | Theory | 3 Hours | 80 Marks |
| Paper-II | Project Work | 20 Marks |
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Detail of Paper – I (Theory)
Theory Paper consists of 80 Marks of 3 hours duration. There will be 3 sections A, B, and C.
| Section-A (60 Marks) | 10 Questions | Part – I (12 Marks) It is Compulsory and consists of only 1 Question Consisting of 10 Question (This question will include MCQs Short answer questions, testing knowledge, application, and skills relating to elementary/fundamental aspects. Part – II (50 Marks) There are 9 Questions in Part 2nd. | Part – 1 10 Q -10 Marks Part – II 4 Q × 3 = 12 Marks 3 Q × 6 = 18 Marks 2 Q × 10 = 20 Marks |
| Section-B (20 Marks) | 4 Questions | There are 4 Questions in this section B Q. 11 (5 short Questions) 1 Mark each Q. 12 – 3 Marks Q. 13 – 6 Marks Q. 14 – 6 Marks | |
| Section-C (20 Marks) | 4 Questions | There are 4 Questions in this section C Q. 15 – (5 Short Questions) – 1 Mark each Q. 16 – 3 Marks Q. 17 – 6 Marks Q. 18 – 6 Marks |
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Note:- The Students have a choice of Section B or Section C. A student is required to attempt only one section out of Section B and Section C.
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SECTION A
Partnership Accounts
A. Fundamentals of Partnership
(i) Definition, meaning, and features of a Partnership.
(ii) Provisions of The Indian Partnership Act, 1932, with respect to books of accounts.
(i) Meaning and importance.
(ii) Rules applicable in the absence of a partnership deed.
(iii)Preparation of Profit and Loss Appropriation Account and Partners’ Capital and Current Accounts.
a) Profit and Loss Appropriation Account.
(b) Partners’ capital accounts: fixed and fluctuating.
(c) Partners’ Current Accounts when the fixed capital method is followed.
Interest on capital, interest on drawings, interest on current accounts (debit and credit) salary, commission to partners and managers, transfer to reserves, division of profit among partners,
(d) Guarantee of profits.
(e) Past adjustments (relating to interest on capital, interest on drawing, salary, and profit-sharing ratio).
Note:- Admission of the manager as a partner is excluded from the topic of past adjustments/guarantee
of Profits.
B. Goodwill
Concept of goodwill and mode of valuation.
(a) Meaning, nature, and features of Goodwill.
(b) Factors affecting the value of goodwill.
(c) Mode of Valuation.
Average profit method – Meaning and practical application.
− Simple average.
− Weighted average method.
Super profit method – Meaning and practical application.
Capitalization method – Meaning and practical application.
Capitalization of average profit.
Capitalization of super profit.
Note:- Capital Employed/Net Assets are Total assets (excluding purchased goodwill, non-trade investments, and fictitious assets) less outside liabilities. Investments are to be taken as non-trade investments unless specified as trade investments.
C. Reconstitution of Partnership
I. Admission
(i) Calculation of new profit-sharing ratio, sacrificing ratio, and gaining ratio.
(ii) Accounting treatment of goodwill on the admission of a partner.
Based on Accounting Standard -26 issued by the Institute of Chartered Accountants of India in the context of Intangible Assets.
(a) Premium for goodwill paid privately.
(b) Premium for goodwill paid (in cash or kind) and retained in the business.
(c) Premium for goodwill paid and withdrawn by the old partners.
(d) When the incoming partner cannot bring premium for goodwill in cash, adjustments are to be done through his current account.
(e) Hidden goodwill.
(f) When goodwill appears in the old Balance Sheet.
(iii)Preparation of Revaluation Account.
Preparation of a Revaluation Account where changes in the values of assets and liabilities are reflected in the new Balance Sheet after the reconstitution of a partnership firm.
(iv) Accounting treatment of accumulated profits and losses.
General Reserve / Reserve Fund, Workmen Compensation Reserve/ Fund, Investment Fluctuation Reserve/Fund, Contingency Reserve, Profit, and Loss Account (Debit and Credit balance), and Advertisement Suspense Account/
Deferred Revenue Expenditure.
(v) Adjustment of Capitals.
(a) Adjustment of the old partner’s Capital Accounts on the basis of the new partner’s capital.
(b) Calculation of the new partner’s capital on the basis of the old partner’s adjusted capital.
(vi) Change in Profit-Sharing Ratio.
Change in PSR takes place at the time of admission to a partnership firm.
Accounting treatment of accumulated profits and losses through one journal entry: (Adjustment of the incoming partner’s share to be done through his current account-similar to the treatment of goodwill not brought in cash.)
Gaining Partners’ Cap/Current A/c Dr.
To Sacrificing Partners Cap/Current
(in case of profits).
Sacrificing Partners’ Cap/Current A/c Dr.
To Gaining Partners Cap/Current
(in case of losses)
General Reserve/ Reserve fund, Workmen Compensation Reserve/ Fund, Investment Fluctuation Reserve/ Fund, Contingency Reserve, Profit and Loss Account (Debit and Credit Balance) and Advertisement Suspense Account/ Deferred Revenue Expenditure.
NOTE:- Preparation of Balance Sheet during admission of a partner to be done in Horizontal format Memorandum revaluation account, Joint Life Policy, Individual life policy are excluded from the syllabus. Admission of a partner during an accounting year is excluded from the syllabus
II. Retirement and death of a partner
(i) Calculation of new profit-sharing ratio, gaining ratio, and sacrificing ratio.
(ii) Adjustment with regard to goodwill including hidden goodwill.
(iii)Adjustment with regard to undistributed profits and losses.
(iv) Adjustment with regard to the share of profits of the retiring or deceased partner from the date of the last
Balance Sheet to the date of retirement or death (on the basis of time or turnover).
Through P & L Suspense A/c (in case of no change in PSR of remaining partners).
Through Gaining Partners capital/ current A/c (in case of change in PSR of remaining partners).
(v) Preparation of Revaluation Account on retirement or death of a partner.
(vi) Adjustment of capitals.
(a) Readjusting the adjusted capital of the continuing partners in the new profit-sharing ratio.
(b) Adjusting the capitals of the continuing partners on the basis of the total capital of the new firm.
(c) When the continuing partners bring in cash to pay off the retiring partners.
(vii) Calculation and payment of the amount due to retiring partner.
(viii) Preparation of retiring partner’s loan accounts and deceased partner’s executor’s loan account (with interest
on loan accrued and due and interest on loan accrued but not due).
(ix) Change in Profit-Sharing Ratio. Change in PSR takes place at the time of retirement/death of a partnership
firm.
Accounting treatment of accumulated profits and losses through one journal entry:
Gaining Partners’ Cap Current A/c Dr.
To Sacrificing Partners’ Cap/Current
(in case of profits).
Sacrificing Partners’ Cap/Current A/c Dr.
To Gaining Partners’ Cap/Current (in case of losses)
General Reserve/ Reserve fund, Workmen Compensation Reserve/ Fund, Investment Fluctuation Reserve/ Fund,
Contingency Reserve, Profit and Loss Account (Debit and Credit Balance), and Advertisement Suspense Account/
Deferred Revenue Expenditure.
NOTE: − Preparation of Balance Sheet during retirement / death of a partner to be done in Horizontal format only. Memorandum Revaluation Account, Joint Life Policy, Individual life policy are excluded from the syllabus.
III. Dissolution of a Partnership firm.
(i) Meaning of dissolution and settlement of
accounts under Section 48 of The Indian
Partnership Act 1932.
Self- Explanatory
(ii) Preparation of Memorandum Balance
Sheet, Realization Account, Partner’s
Loan Account, Partner’s Capital Account
and Cash/Bank Account.
Self-explanatory.
NOTE:
When an asset or a liability is taken to the
realization account any corresponding/related
fund or reserve is also transferred to realization
account and not to the partners’ capital
accounts.
When accounts are prepared on a fixed capital basis,
partners’ current account balances are to be
transferred to capital account. No adjustments are
required to be passed through current account.
Bank overdraft is to be taken to the Bank/Cash A/c and
not to be transferred to realization account but bank
loan must be transferred to realization account.
• If question is silent about the payment of a liability,
then it has to be paid out in full.
• If the question is silent about the realization of an
asset, its value is assumed to be nil.
• Loan taken from a partner will be passed through
cash or bank account even if the partner’s capital
account has a debit balance.
• Loan given to a partner will be transferred
(debited) to his Capital account.
• Admission cum retirement, amalgamation of firms
and conversion/sale to a company together with
piecemeal distribution and insolvency of a partner
/ partners not required.
- Joint Stock Company Accounts
A. Issue of Shares
Problems on issue of shares.
(a) Issue of shares at par and premium under
Companies Act, 2013.
(b) Issue of shares for considerations other
than cash:
• To promoters (can be considered
either through Goodwill account or
Incorporation costs account).
• To underwriters.
• To vendors.
(c) Calls in arrears, calls in advance and
interest thereon..
(d) Over and undersubscription (including
pro-rata allotment).
(e) Preparation of Journal; Cash Book and
Journal Proper; Ledger Accounts.
NOTE: In pro-rata allotment when shares are
issued at a premium, excess money received on
application will first be adjusted towards the
share capital. Any excess thereon will be utilized
towards the Securities Premium Reserve.
When allotment or any call money is due, it is to
be transferred to the calls in arrears account, on
which interest, if provided in the Articles of
Association, will be calculated.
(f) Forfeiture and reissue of shares at par,
premium or discount.
Self-explanatory.
(g) Disclosure of Share capital in the
company’s Balance Sheet.
NOTE: Issue of bonus and rights shares, private
placement of shares, sweat equity shares,
employees’ stock option scheme, reservations for
small individual participants and minimum
tradable lots are not required.
B. Issue of Debentures
Problems on issue of debentures (at par, at
premium and at discount.)
Problems on issue of debentures to include:
(a) Issue of debentures at par, at premium and
at discount under Companies Act 2013.
(b) Issue of debentures as collateral security
for a loan.
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(c) Issue of debentures for considerations
other than cash.
• To promoters.
• To underwriters.
• To vendors
(d) Accounting entries at the time of issue
when debentures are redeemable at par
and premium.
(e) Calls in arrears, calls in advance and
interest thereon.
(f) Interest on debentures (with TDS).
(g) Disclosure of Debentures in the
company’s Balance Sheet.
(h) Methods of writing off discount / loss on
issue of debentures- when debentures are
redeemable in a lump sum at the end of a
specified period; when debentures are
redeemable in instalments.
(i) Disclosure of discount on issue of
debentures in the company’s Balance
Sheet when debentures are redeemed in
instalments.
C. Redemption of Debentures
• Creation of Debenture Redemption
Reserve (wherever applicable)
• Redemption of debentures out of profits.
• Redemption of debentures out of capital.
• Redemption of debentures in a lump sum.
• Redemption of debentures in annual
instalments by draw of lots.
• Redemption of debentures by purchase in
the open market- for immediate
cancellation; as an investment and then
later cancelled.
Self-Explanatory.
NOTE:
I. Calculation of ex-interest and cum-interest are
not required.
II. In case of redemption of debentures in annual
instalments by draw of lots:
(i) The entire DRI purchased for the
redemption of the instalment of
debentures is not sold at the end
of the year
but sold/further purchased to the extent to
maintain 15% of the face value of the
debentures to be redeemed in the next
instalment. In case of redemption in equal
instalments, DRI purchased for the first
instalment remains invested till the last
instalment.
(ii) Wherever applicable, DRR is transferred
to General Reserve in proportion to the
debentures redeemed.
III. Rules relating to creation of
Debenture Redemption Reserve (DRR):
(i) Listed companies including NBFCs
registered with RBI and HFCs registered
with National Housing Bank (NHB) both
for public issue as well as private
placements do not require the creation of
a DRR of 25 per cent of the value of
outstanding non-convertible debentures.
(ii) Unlisted NBFCs registered with RBI and
HFCs registered with National Housing
Bank (NHB) both for public issue as well
as private placements do not require the
creation of a DRR of 25 per cent of the
value of outstanding non-convertible
debentures.
(iii) For unlisted companies (other than
NBFCs and HFCs), DRR is reduced from
the present level of 25 per cent to 10 per
cent of the outstanding debentures.
Rules regarding Debenture Redemption
Investment (DRI)
• Unlisted NBFCs and HFCs need not
deposit any amount of its debentures
maturing during the year with
scheduled banks or invest it in specified
government securities.
• The following companies will continue
to invest or deposit, on or before 30th
April in each year, a sum which shall
not be less than 15 per cent, of the
amount of its debentures maturing
during the year, ending on 31st March
of the next year, in deposits with any
scheduled bank, free from any charge
or lien / in unencumbered securities of
the Central Government or any State
Government / in unencumbered
securities mentioned in Section 20 of
the Indian Trusts Act, 1882/ in
unencumbered bonds issued by any
other company notified under Section
20 of the Indian Trusts Act, 1882:
(i) Listed companies including
NBFCs registered with RBI HFCs
National Housing Bank (NHB) and
unlisted companies (other than
NBFCs and HFCs).
(ii) Unlisted companies (other than
NBFCs and HFCs).
Basically, All India Financial Institutions
regulated by RBI, Banking Companies for both
public as well as privately placed debentures,
other Financial Institutions within the
meaning of Section 2(72) of the Companies
Act, 2013 and unlisted NBFCs registered with
RBI and HFCs registered with National
Housing Bank (NHB) are exempted both, from
creating DRR and from making a DRI.
D. Final Accounts of Companies
Preparation of the Balance Sheet of a company
(along with notes to accounts) as per Schedule
III Part I of Companies Act 2013.
As per the amendment made in Accounting
Standard 4, dividend proposed for a year is not
a liability till it has been approved by the
shareholders. Thus, proposed dividend is not
shown as a short-term provision in the current
Balance Sheet of a company but disclosed in
Notes to Accounts under Contingent
Liabilities.
All capital losses to be written off in the year
in which they occur unless otherwise
mentioned.
NOTE: Schedule III Part II of Companies Act
2013 (Statement of Profit and Loss) is not
required for the purpose of preparing final
accounts of a Company.
However, for the preparation of Comparative and
Common Size Income Statements (Section B –
Unit 4: Financial Statement Analysis), the extent
and format of the Statement of Profit and Loss as
per Schedule III Part II of the Companies Act
2013 to be studied is as follows:
SECTION B
MANAGEMENT ACCOUNTING
- Financial Statement Analysis
Comparative Statements and Common Size
Statements.
Meaning, significance and limitations of
Comparative Statements and Common Size
Statements.
Preparation of Comparative Balance Sheet and
Statement of Profit and Loss (inter-firm and intrafirm) showing absolute change and percentage
change.
Common size Balance Sheet to be prepared as a
percentage of total assets and total liabilities.
Common size Statement of Profit and Loss to be
prepared as a percentage of Revenue from
operations.
NOTE: Preparation of comparative statements and
common size statements to be made from the
Balance Sheets and Statements of P/L without
notes to accounts. - Cash Flow Statement (Only for Manufacturing
Companies)
(i) Meaning, importance and preparation of a
Cash Flow Statement.
NOTE: Based on Accounting Standard – 3
(revised) issued by the Institute of Chartered
Accountants of India.
(ii) Calculation of net cash flows from operating
activities based on Indirect Method only.
Preparation of a Cash Flow Statement from
two consecutive years’ Balance Sheet with or
without adjustments.
Preparation of complete/partial cash flow
statement from extracts of Balance Sheets and
Statements of P/L with or without adjustments.
NOTE: Any adjustment or an item in the Balance
Sheet relating to issue of bonus shares,
extraordinary items and refund of tax are not
required.
(iii) Preparation of Cash Flow Statement on basis
of operating, investing and financing
activities.
The following items are to be taken when
calculating net cash flows from financing
activities:
• Issue of shares at par and premium, issue
of debentures at par, premium and
discount.
• Redemption of preference shares and
debentures at par.
• Interest paid on Long-Term and ShortTerm Borrowings.
• Dividend– interim and final- paid on
shares.
• Long-term borrowings and Short-term
borrowings – bank overdraft, cash credit
and short-term loan. whether taken or
repaid.
• Share issue expenses / underwriting
commission paid.
The following items are to be taken when
calculating net cash flows from investing
activities:
• Cash purchase of fixed assets.
• Cash sale of fixed assets.
• Purchase of shares or debentures or longterm investments of other companies.
• Interest and dividend received on shares
or debentures or long- term investments of
other companies.
• Sale of shares or debentures or long- term
investments of other companies.
The following items are to be taken for cash
and cash equivalents:
• Cash
• Bank
• Short term investments
• Marketable securities
NOTE:
(i) Adjustments relating to provision for taxation,
proposed dividend, interim dividend,
amortization of intangible assets, profit or loss
on sale of fixed assets including provision
for/accumulated depreciation on them, Profit
or loss on sale of investment are also included.
(ii) Treatment of proposed dividend:
(a) Dividend proposed for the previous year
will be an outflow for cash, unless
otherwise stated, on the assumption that
the proposed amount has been approved
by the shareholders in the AGM.
(b) No effect is given to Proposed Dividend
for the current year as it is not provided
for and is a contingent liability.
(c) Any unpaid dividend is transferred to
Dividend Payable Account / Unpaid
Dividend Account which is shown in the
Balance Sheet of the current year as Other
Current Liabilities under Current
Liabilities.
(iii) Treatment of provision for doubtful debtsProvision for doubtful debts can be treated as
a charge against profits or as part of the
working capital changes. In case of good
debtors, the provision will be treated as an
appropriation of profit.
(iv) To calculate cash flow from operating
activities the Adjusted Profit and Loss Account
is not acceptable as per AS-3.
(v) Calculation of Net Profit before Tax has to be
shown as a Working Note.
(vi) Excluded: Any transaction pertaining to
Capital Reserve.
