ISC Class 12 Accountancy Revised Syllabus for 2024 Exam: Download Syllabus PDF

S. No.

UNIT

TOTAL WEIGHTAGE

SECTION A: 60 Marks

1

Partnership Accounts

A. Fundamentals of Partnership

10 Marks

B. Goodwill

15 Marks

C. Reconstitution of Partnership

I. Admission

II. Retirement and Death of a Partner

III. Dissolution of a Partnership Firm

8 Marks

2.

Joint Stock Company Accounts

A. Issue of Shares

11 Marks

B. Issue of Debentures

9 Marks

C. Redemption of Debentures

D. Final Accounts of Companies

7 Marks

SECTION B (MANAGEMENT ACCOUNTING): 20 Marks

3.

Financial Statement Analysis

4 Marks

4.

Cash Flow Statement

8 Marks

5.

Ratio Analysis

8 Marks

OR

SECTION C (COMPUTERISED ACCOUNTING): 20 Marks

6.

Accounting Application of Electronic Spread Sheet

10 Marks

7.

Database Management System (DBMS)

10 Marks

TOTAL

80 Marks

Section A

1. Partnership Accounts

A. Fundamentals of Partnership

(i) Definition, meaning and features of a Partnership. 

Self-explanatory. 

(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 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, 

(b) Guarantee of profits 

(c) Past adjustments (Relating to interest on capital, interest on drawing, salary and profit-sharing ratio).

NOTE: 

• Interest on loan given by the partner to the firm is to be taken as a charge against profits. This interest will be debited to the P/L account and credited to his loan account. 

• Interest on loan taken by a partner from the firm should be credited to P/L account and debited to his capital/current account as the case may be. 

• Rent due to a partner is a charge against profit and is to be credited to partners’ current account in case of fixed capital system or to partners’ capital account when capitals are fluctuating. 

• Percentage of Partner’s commission / General Reserve to be calculated only on the correct trading profit and not on the divisible profit. 

• Rectification of errors (past adjustments) through a single journal entry/ adjusting and closing journal entries, preparation of partners’ adjusted capital/current accounts. 

• Admission of manager as a Partner is excluded from the topic of past adjustments/guarantee of profits.  

B. Goodwil

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 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.

Self-Explanatory

(ii) Accounting treatment of goodwill on 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 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 old partner’s Capital Accounts on the basis of the new partner’s capital. 

(b) Calculation of new partner’s capital on the basis of old partner’s adjusted capital. 

(vi) Change in Profit-Sharing Ratio. 

Change in PSR takes place at the time of admission of 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. 

Self-Explanatory. 

(ii) Adjustment with regard to goodwill including hidden goodwill. 

Self-Explanatory. 

(iii)Adjustment with regard to undistributed profits and losses. 

Self-Explanatory. 

(iv) Adjustment with regard to 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. Self-Explanatory. 

(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 amount due to retiring partner. 

Self-Explanatory. 

(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). 

Self-explanatory. 

(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 realized value of tangible assets and investments it should be considered as realized at book value itself. 

• If the question is silent about the realized value of intangible assets, accrued income and prepaid expenses it should be considered as nil (zero value). 

• 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. 

• Realization expenses – paid by the firm; paid by a partner; borne by a partner; to be borne by a partner but paid by the firm on his behalf; partner reimbursed by the firm for the realization expenses paid by him with an asset of the firm. 

• Admission cum retirement, amalgamation of firms and conversion/sale to a company together with piecemeal distribution and insolvency of a partner / partners not required

2. 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. 

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. 

(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. 

NOTE: All capital losses to be written off in the year in which they occur.

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. 

Self-Explanatory. 

NOTE: 

I. All capital losses to be written off in the year in which they occur. 

II. Calculation of ex-interest and cum-interest are not required. 

III. 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. 

IV. 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 any DRR. 

(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 any DRR. 

(iii) For unlisted companies (other than NBFCs and HFCs), DRR is created to the extent of 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. 

Amendments: 

1. 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. 

2. Schedule III of the Companies Act, 2013, has been amended whereby: 

(I) The sub-head ‘Fixed Assets’ under Non-Current Assets is replaced with ‘Property, Plant and Equipment and Intangible Assets.’

(II) Tangible Assets under Fixed Assets is replaced with ‘Property, Plant and Equipment.’ 

3. Current maturities of long-term borrowings to be shown under the Head - Current Liabilities Sub head- Short Term Borrowing. 

4. Securities Premium Reserve to be replaced with Securities Premium. 

All capital losses to be written off in the year in which they occur unless otherwise mentioned