ISC Accounts

What are Accounts?

Accounts are the art of communicating financial information about a company/business entity to users such as shareholders, managers, and directors. It is a subject of numbers, and to master it; one needs to have a good grip on the topics such as; ledgers; debiting and crediting; balance sheets, and even journal entries.

The Aim of the Subject

1. To provide the students with a proper understanding of principles and practices of recording transactions and interpreting individual and company accounts.
2. To evolve students’ understanding of the distinction between the form and classification of financial statements as a means of communicating financial information.

Topics in the Subject:

Class XI

PAPER – I (THEORY) – 80 Marks

There will be one paper of 3 hours duration of 80 marks divided into two parts.

Part I (20 marks) will be compulsory and consist of short answer questions, testing knowledge, application, and skills relating to elementary/fundamental aspects of the entire syllabus.

Part II (60 marks): Candidates will be required to answer five questions out of eight from this section. Each question shall carry 12 marks.

Basic Accounting Concepts-

• Background of accounting and accountancy.
• Knowledge and understanding of IFRS (International Financial Reporting Standards).
• GAAP (Generally Accepted Accounting Principles), types of accounts; basic terms used in accounting, Accounting Standards, and Accounting Equations.

Journal, Ledger and Trial Balance-

• Journal: recording of entries in the journal with narration.
• Ledger: posting from journal to respective ledgers.
• Subdivision of journal.
• Trial balance.

Bank Reconciliation Statement-

• Bank reconciliation statements.
• Meaning and need for bank reconciliation statement.
• Preparation of a bank reconciliation statement from the given cash book balance or passbook balance, or both.
• Preparation of a bank reconciliation statement from the extract of the cash book and the passbook relating to the same month.

Depreciation, Provisions, and Reserves-

• Depreciation (meaning, need, causes, objectives, and characteristics).
• Methods of charging depreciation (Straight Line and Written Down Value method).
• Problems relating to the purchase and sale of assets incorporating the application of depreciation under the two stated methods.

Bills of Exchange-

• Introduction to Negotiable Instruments: explanation of basic terms.
• Practical problems on the above in the books of the drawer, drawee, endorsed, and bank.

Final Accounts and Concept of Trading, Profit and Loss account and Balance Sheet (with and without adjustments), Marshalling of Balance Sheet-

• Capital and revenue expenditure/income.
• Provisions and Reserves (Meaning, importance; the difference between provisions and reserves; types of reserves – revenue reserve, capital reserve, general reserve, specific reserve, and private reserve).

Accounts from incomplete records-

1. Single entry and difference with double entry.

• Meaning, characteristics and limitations.
• Difference between Statement of Affairs and Balance Sheet.
• Ascertainment of profit/loss by the statement of affairs method, including application.
• Conversion of Single entry into the double entry.
• Preparation of Trading and Profit & Loss Account and Balance Sheet (regarding missing figures in total debtors account, entire creditors account, Bills Receivable account, and Bills Payable account).

Non-Trading Organization–

• Non-trading organization: meaning, objectives, necessity, and treatment of specific items.
• Different books were maintained and differences between them.
• Preparation of Income and Expenditure Account and Closing Balance Sheet.

Rectification of Errors-

• Errors and types of errors: errors of omission; errors of commission; errors of principle; compensating errors.
• Errors disclosed by the trial balance.
• Errors not disclosed by the trial balance.
• Rectification of errors after the preparation of trial balance and use of suspense account.
• Rectification of Errors after the preparation of Final Accounts.

Introduction to the use of computers in Accounting-

Introduction to Computerized Accounting System: Components of CAS, Features, Grouping of Accounts. Advantages and Limitations of CAS, Accounting Information System.

Application of computers in Accounting (Only Theory) — Automation of accounting process, designing accounting reports (MIS reports) – Chart of accounts – Assets/liabilities/ income/ expenses/ capital, customer and supplier masters, type of transaction: cash, bank, sale, purchase, journal vouchers; general ledger/trial balance, balance sheet, profit and loss, data exchange with other information systems.

Comparison of accounting processes in manual and computerized accounting.

Part II – Project Work – 20 Marks

Candidates will be expected to have completed two projects from any topic covered in Theory. Marks allocation for each project is 10 marks.

A list of suggested projects is given below;

1. Preparation of Journal, Ledger, Trial Balance, and Financial Statements of a trading organization based on a case study.

• Develop a case study of a sole trader starting a business with a certain amount of capital.
• Wrote in detail his transactions during the year – his purchases – cash and credit, expenses, purchase of fixed assets and depreciation charged on them, any outstanding expenses, prepaid expenses, accrued income, drawing bills of exchanges, accepting bills payable, etc.
• From the case study developed (which should have at least 15 transactions), pass the journal entries, post them into the ledger, and prepare a Trial Balance and Trading and Profit and Loss Account Balance Sheet.
• The various expenses for comparison purposes could be depicted in the form of a bar diagram, pie charts, etc.

2. Preparation of the accounts of a Non-Profit Organization based on a case study.

Develop a case study of an NPO by beginning with the primary motive of establishing it, that is, why have you decided to open a club or a library or a hospital, etc?

Write in detail about the capital fund sources, subscriptions, donations, other receipts, and payment of your NPO.

From this case study, prepare the NOP’s Receipts and Payment Accounts, its Income and Expenditure Account, and its Balance Sheet.

The various expenses, for comparison, purposes could be depicted in the form of a bar diagram, pie charts, etc.

Prepare a Bank Reconciliation Statement and Amended Cash Book from the information given in your Cash Book and Bank Statement (Pass Book).

Class XII

There will be one paper of 3 hours duration of 80 marks divided into three Sections A, B, and C.

It will be compulsory for all candidates to attempt Section A.

Section A (60 Marks) will consist of two parts, Part I and Part II, and have a total of eight questions.

Part I (20 Marks): will consist of Question 1 (compulsory). This question will include short answer questions, testing knowledge, application, and skills relating to elementary/fundamental aspects of the entire syllabus. Question 1 will be based on Section A of the syllabus.

Part II (40 Marks): Candidates will be required to answer four questions out of seven from this part. Each question shall carry 10 marks. Part II will also be based on Section A of the syllabus.

Section B/ C (20 marks): Candidates will have a choice of attempting questions either from Section B or Section C. Candidates will be required to answer two questions out of three from the section of their choice. Each question shall carry 10 marks.

Section A

Joint Venture- Joint Venture: objectives; necessity and methods of accounting (recording of transactions in the books of one Co-venturer, recording of transactions in the books of all Co-ventures, recording of transactions in separate sets of books).

Partnership Accounts

1. Fundamentals of Partnership

• Definitions, meaning, and features of a Partnership.
• Provisions of The Indian Partnership Act, 1932, concerning books of accounts.
• Preparation of Profit and Loss Appropriation Accounts and Capital Accounts.
• Goodwill – concept, and mode of valuation.

2. Reconstitution of Partnership

1. Admission

• Calculation of new profit sharing ratio, sacrificing ratio and gaining ratio.
• Accounting treatment of Goodwill on the admission of a partner.
• Preparation of Revaluation Account.
• Accounting treatment of accumulated profits and losses.
• Adjustment of Capitals.

3. Change in profit sharing ratio

• Calculation of a new profit sharing ratio, sacrificing ratio and gaining ratio.
• Accounting treatment of Goodwill.
• Accounting treatment of accumulated profits and losses.

4. Retirement and death of a Partner.

• Calculation of a new profit sharing ratio, sacrificing ratio and gaining ratio.
• Adjustment concerning Goodwill, including hidden Goodwill.
• Adjustment about undistributed profits and losses.
• Adjustment concerning the share of profits from the date of the last Balance Sheet to the date of retirement or death.
• Preparation of a Revaluation Account on retirement or death of Partner.

5. Dissolution of a Partnership firm.

• Meaning of dissolution, modes of settlement of accounts.
• Preparation of Realization Account.
• Treatment of undistributed profits and losses.
• Preparation of a memorandum balance sheet.

6. Joint Stock Company Accounts-

• Issue of Shares
• Issue of Debentures
• Final Accounts of Company

7. Financial Statement Analysis

8. Cash Flow Statement (Only for Non-Financial Companies)

9. Ratio Analysis

10. Accounting Application of Electronic Spread Sheet.

1. Concept of Electronic Spreadsheet.
2. Features offered by Electronic Spreadsheet.
3. Application of spreadsheet in generating the following accounting information-

• Payroll.
• Data Presentation.

11. Database Management System (DBMS)

• Concepts and Features of DBMS
• DBMS in Business Application

Paper-II

Candidates will be expected to have completed two projects from any topic covered in Theory.

The teacher and a visiting examiner appointed locally and approved by the council will assess the project work.

A list of suggested topics for the project is given below;

1. Preparation of Journal, Ledger, Trial Balance, and Financial Statements of a partnership form of business based on a case study.

• Develop a case study showing how two or more friends decide to come together and start a business with a certain amount of capital.
• Prepare a Partnership Deed.
• Write in detail their transactions during the year: purchases- cash and credit, sales – cash and credit, expenses, prepaid expenses, purchase of fixed assets and depreciation charged on them, any outstanding expenses, prepaid expenses, accrued income, drawing bills of exchange, accepting bills payable, etc.
• This case study developed (which should have at least 15 transactions), pass the journal entries, post them into the ledger, and prepare a Trial Balance and the Trading and Profit and Loss Account, Profit and Loss Appropriation Account, and Balance Sheet.

2. Preparation of a Cash Flow Statement with the help of imaginary Balance sheets of a company for two consecutive years could be taken along with at least five additional pieces of information (depreciation, purchase/ sale of fixed assets, Dividend paid/ proposed, Tax paid/ proposed).

• The results of the operating, investing, and financing activities could be shown graphically and/ or pictorially (bar diagrams, pie charts).

3. Preparation of a company’s Common Size and Comparative Income Statement and Balance Sheet by taking into account its audited financial results of two quarters of an accounting year.

• The comparison has to be made in Common Size and Comparative Income Statement and Balance Sheet.
• The comparison could also be shown graphically and/ or pictorially (bar diagrams, pie charts).

4. Taking the audited/ unaudited financial results of any leading company, its liquidity, solvency, turnover, and profitability ratios of two years should be calculated. Comparing the ratios of both years should be shown graphically and/ or pictorially (bar diagrams, pie charts).

5. Employee Salary Sheet:

6. Revenue and Commission Statement.

7. The spreadsheet on Outstanding Report Prepares and Present a Spreadsheet for a list of outstanding notes receivable each month.

8. Database Management

• Create a Database with at least 10 records, with each record having the following fields: Employees Details: PAN Number, Name, Address, and Phone Number
• Sort the names in alphabetical order.

9. The Employee database has another table called Loan Details that stores the details of loans taken by various employees. Create a query that gives a list of employees’ names along with loan details. The loan details table has the following fields: Loan Amount, Loan Date, Interest Rate, Amount Paid, and Amount Balance.

Also Recommended: ISC Economics 

For any help, feel free to contact us by filling in our student assistance form.
SOURCE: https://www.cisce.org/