1. Introduction to Accounting
Background: Understanding the fundamentals of accounting and accountancy, types of accounts, basic terms, and the Accounting Equation.
- Evolution of Accounting: The three phases.
- Basic Terms: Definitions for key concepts like Event, Transaction, Vouchers, Capital, Assets (intangible, tangible, fixed, current, liquid, wasting, fictitious), Liabilities (internal and external – current, long-term, contingent), Trade Debtors, Trade Creditors, Purchases, Sales, Goods traded in, Stock (raw material, work in progress, finished goods), Profit, Loss, Expense, Revenue, Income, Drawings.
- Accounting Equation: Meaning and usefulness.
- Definitions: Book-keeping, Accounting, and Accountancy; distinctions between these terms and an overview of the accounting cycle.
- Users of Accounting Information.
- Subfields of Accounting: Financial accounting, cost accounting, and management accounting.
Note: No practical problems on Accounting Equation are required.
2. Journal, Ledger, and Trial Balance
Journal: Recording entries in a journal with narration.
- Classification of Accounts: Traditional classification or modern approach.
- Double Entry System.
- Rules of Journalizing: Traditional classification or modern approach.
- Definition: Purpose and advantages of using a journal.
- Format of Journal.
- Types of Entries: Simple and compound entries, opening journal entries.
- GST Entries: Input CGST and SGST/IGST; Output CGST and SGST/IGST, and offsetting Input GST against Output GST.
Ledger: Posting entries from journal to ledgers.
- Definition: Purpose and format of a ledger.
- Posting Mechanics: Closing/Balancing of accounts; transferring expenses and revenues to Trading/Profit & Loss Account based on direct/indirect nature; carrying down balances of Assets, Liabilities, and Capital.
- Adjusting and Closing Entries.
Sub-divisions of Journal: Cash book, petty cash book, sales day book, purchases day book, sales return day book, purchases return day book, and journal proper.
- Cash Book: Simple and triple column (cash, bank, discount) cash book, with adjustments.
- Petty Cash Book: Including analytical and imprest system.
- Day Books: Sales and purchases day books (simple and columnar).
- Returns Day Book: Sales return and purchases return day books.
- Journal Proper.
Trial Balance:
- Definition: Purpose, advantages, and limitations of a Trial Balance.
- Preparation: Using the balance method from given ledger balances.
3. Depreciation
- Definition: Importance, causes, objectives, and characteristics of depreciation.
- Methods of Depreciation: Straight Line and Written Down Value methods; advantages, limitations, and differences.
- Recording Depreciation: Charging to asset account or creating a provision/accumulated depreciation.
- Asset Problems: Purchase and sale of assets (with/without asset disposal account), including depreciation under the two methods.
Note: Changing methods from SLM to WDV and vice-versa is not required.
4. Bills of Exchange
Introduction to Negotiable Instruments: Key terms and definitions.
- Types of Negotiable Instruments: Bills of Exchange, promissory note, cheque, including basic terms (e.g., drawer, drawee, payee, endorser, endorsement, etc.).
- Practical Problems: Involving Journal entries and Ledger accounts for drawer, drawee, and endorsee.
Note: Excludes accommodation bill and recording in bank’s books.
5. Accounting Concepts
- GAAP: Understanding basic concepts (e.g., Going Concern, Money Measurement, Revenue Recognition, etc.).
- Basis of Accounting: Cash basis vs. accrual basis.
- Accounting Standards: Meaning and importance.
- IFRS: Purpose, fundamental assumptions, and differences from Indian GAAP.
6. Final Accounts and Balance Sheet
- Capital and Revenue: Differentiating expenditures, receipts, profits/income, and losses.
- Provisions and Reserves: Definitions, importance, and types.
- Trading, Profit and Loss Account, Balance Sheet: Preparation (with and without adjustments), marshalling order (permanence/liquidity).
- Adjustments: Closing stock, expenses, income, and others in the balance sheet.
Note: Excludes provision for doubtful debts.
7. Rectification of Errors
- Types of Errors: Omission, commission, principle, compensating errors.
- Error Correction: Using suspense account (if required), or through the Profit and Loss Adjustment Account.
Note: Redrafting of Balance Sheet is not required.
8. Non-Trading Organization
- Definition and Objectives: Understanding non-trading organizations and specific treatment of items.
- Books Maintained: Differences between Receipts and Payments Accounts, Income and Expenditure Accounts, and Balance Sheet.
- Account Preparation: Creating Income and Expenditure Account and Balance Sheet based on receipts and payments.
Note: Receipt/Payment and Income/Expenditure Account preparation from incomplete records is not required.
Paper II – Project Work
20 Marks
No comments:
Post a Comment