ISC Class 12 Accounts Syllabus 2023-24: Download Revised Class 12th Accounts Syllabus PDF

ISC Class 12th Accounts Syllabus 2024: Accounts, Subject Code: 858, is one of the ,ost major subjects in ISC Class 12th for the Commerce stream candidates. The syllabus has been designed encompassing various important theory topics and their practical applications. The ISC class 12 Accounts paper for 2023-24 is divided into two: theory and project work. The theory paper, carrying 80 marks, is divided into three sections A, B and C. Students will have the duration of 3 hours to solve the paper. The Project Work will carry 20 marks. The syllabus is aimed at providing  an understanding of the principles of accounts and practice in recording transactions and interpreting individual as well as company accounts and developing an understanding of the form and classification of financial statements as a means of communicating financial information. Check the complete syllabus below:

ISC Board Class 12 Accounts Syllabus

Distribution Of Marks For The Theory Paper

SECTION A

1. Partnership Accounts

• 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,

(d) Guarantee of profits

(e) 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.

• 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.

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.

• Reconstitution of Partnership

1. 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. 3

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.

2. 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 account.

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.

3. 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.

1. Joint Stock Company Accounts

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. (a) Issue of debentures at par, at premium and at discount under Companies Act 2013.

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