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CBSE Class 12 Accountancy Syllabus 2020-21

CBSE Class 12 Accountancy Syllabus 2020-21 covers a wide range of significant topics such as accounting for not for profit organisation, reconstitution of a partnership firm – admission of a partner, accounting for partnership firms – basic concepts, dissolution of partnership firm, and reconstitution of a partnership firm – retirement/death of a partner. 

Some other significant topics covered in the CBSE Class 12 syllabus for Accountancy are cash flow statement, accounting ratios, analysis of financial statements, financial statements of a company, issue and redemption of debentures and accounting for share capital.

CBSE Syllabus for Class 12 Accountancy 2020-21

CBSE Class 12th Accountancy Syllabus comprises 2 parts. Part A consists of 5 chapters, and part B consists of 6 chapters. Below is a brief overview of the chapters.

CBSE Class 12 Accountancy Part A Syllabus

Chapter 1: Accounting for Not for Profit Organisation

Accounting for Not for Profit Organisation of Class 12 Accountancy introduces you to the meaning and characteristics of the not-for-profit organisation, accounting records of not-for-profit organisation, receipt and payment account, income and expenditure account, balance sheet, some peculiar items, income and expenditure account based on trial balance and incidental trading activity. This chapter also covers components of balance sheets such as fictitious assets, liquid assets, current assets, fixed assets, current liabilities, fixed liabilities, fund and reserve. 

Here you will also learn the principal sources of income for a non-profit organisation such as subscriptions from members, legacies, grant-in-aid, donations and income from investments. Here, you will also read about Cash, Accounts receivable, Inventory, Other assets, accounts payable, accrued liabilities, debt, other liabilities, common stock and retained earnings.

Chapter 2: Accounting for Partnership Firms – Basic Concepts

The second chapter of Class 12 Accountancy explains to you the nature of the partnership, partnership deed, registration of partnership deed, special aspects of partnership accounts, maintenance of capital accounts of partners, distribution of profit among partners, the guarantee of profit to a partner, past adjustments and final accounts. The chapter also gives you a brief on the nature of the partnership with 2 or more persons, agreement and sharing of profit.

Here, the chapter also throws light on the drawings that can be made by each partner, The interest to be allowed on capital and interest charged on drawings, rights of partners, duties of partners, remuneration to partners, the method used for calculating goodwill and profit and loss sharing ratio.

Chapter 3: Reconstitution of a Partnership Firm – Admission of a Partner

The third chapter of Class 12 Accountancy, teaches you about modes of reconstitution of a partnership firm, admission of a new partner, new profit sharing ratio, sacrificing ratio, goodwill, adjustment for accumulated profits and losses, revaluation of assets and reassessment of liabilities, adjustment of capitals and change in profit sharing ratio among the existing partners. 

The chapter also explains the modes of reconstitution of partnership such as the admission of a new partner, changes in the profit-sharing ratio, retirement of an existing partner and death of a partner. It also teaches you treatment of goodwill through the premium method and revaluation method, adjustment of capital through Sacrificing ratio, and new profit sharing ratio. This chapter also discusses the revaluation of assets and reassessment of liabilities, valuation and adjustment of goodwill, adjustment of partners’ capitals and distribution of accumulated profits (reserves). 

Chapter 4: Reconstitution Of A Partnership Firm – Retirement/Death Of A Partner

The fourth chapter of Class 12 Accountancy Syllabus, introduces you to ascertaining the amount due to retiring or deceased partner, gaining ratio, treatment of goodwill, adjustment for revaluation of assets and liabilities, adjustment of accumulated profits and losses, disposal of the amount due to retiring partner, adjustment of partner’s capital and death of a partner. 

The chapter also briefs you about the credit balance of the retiring partner’s capital a/c, and credit balance of his current a/c (if any). Here you will also learn about partner’s share of goodwill, his share of accrued profits or reserves, his share in the profit of revaluation of assets and liabilities, his share of gains up to the date of retirement/death, interest on his capital, (only) if involved up to the date of retirement/death and commission/salary, if any, due to him until the date of retirement/death.

Chapter 5: Dissolution Of Partnership Firm

Dissolution of Partnership Firm of CBSE Class 12th Accountancy Syllabus 2020-21 explains you dissolution of the partnership, dissolution of a firm, what are the differences between the dissolution of partnership and dissolution of a firm. It also teaches you about the settlement of accounts and accounting treatment,  dissolution by agreement, dissolution by notice, dissolution by the court and compulsory dissolution and conditional dissolution

The chapter also gives you an idea of various aspects of dissolution such as a change in current profit sharing ratio (PSR) among partners, admission of a partner, death of a partner, the retirement of a partner, and completion of the deal and if a partnership is established for that.  It also teaches you how to work with the bankruptcy of a partner and expiry of the partnership period, and how to treat a partnership for a particular time frame. 

Here, you will also learn about how a partnership is dissolved by an act of the partners, by operation of law, by a court decree, statement of dissolution and personal notification. 

CBSE Class 12 Accountancy Part B Syllabus

Chapter 1: Accounting for Share Capital

Accounting for Share Capital of CBSE Class 12 Accountancy teaches you about features of a company, kinds of companies, share capital of a company, categories of share capital, nature and classes of shares, issue of shares, accounting treatment, forfeiture of shares. Some characteristic features of a company include a company is a corporate body, it is a separate legal entity, it is a limited liability, it faces continual succession, it has a common seal. This chapter also explains about its transferability of shares in a public company and a private company and how a company can sue or be sued. 

Further, you will also be taught of kinds of companies such as companies limited by shares, unlimited companies, a public company, private company and one person company or OPC, It also teaches you about the various types of share capital like authorised capital, issued capital, subscribed capital and called up capital. Further, you will learn about the various types of shares, such as preference shares and equity shares or ordinary shares.

Here, you will also come across the process of issuing of shares that involves the issue of the prospectus, receipt of applications and allocation of shares. 

Chapter 2: Issue and Redemption of Debentures

Issue and Redemption of Debentures of Class 12 Accountancy introduces you to the meaning of debentures, the distinction between shares and debentures, types of debentures, issue of debentures, oversubscription, issue of debentures for consideration other than cash, issue of debentures as collateral security, terms of issue of debentures, interest on debentures, interest on debentures and writing off discount/ loss on issue of debentures. 

Further, you will also come across redemption of debentures, redemption by payment in a lump sum, redemption by purchase in the open market, redemption by conversion and and sinking fund method.  Here you will also learn the types of debentures such as secured debentures, unsecured debentures, convertible debentures, non-convertible debentures, registered debentures and bearer debentures. This chapter also teaches you about the accounting treatment of over-subscription that involves the rejection of applications and acceptance of application partially. 

Here, you will also read about different ways of claiming debentures such as payment in a lump sum, payment in instalments, purchase in the open market and by conversion into shares or new debentures. Further, you will learn different types of debentures such as debentures from the point of view of security, debentures from the point of view of tenure, debentures from the point of view of convertibility, debentures from coupon rate point of view and debentures from the viewpoint of registration. 

Chapter 3: Financial Statements of a Company

Financial Statements of a Company of Class 12th Accountancy Syllabus, explains to you the meaning of financial statements, nature of financial statements, objectives of financial statements, types of financial statements, uses and importance of financial statements and limitation of financial statements. Some types of financial statements covered in this chapter are such income statements, balance sheets or statements of financial position, statement of change in equity, statement of cash flow, and noted (disclosure) to financial statements.

You will also read about uses of financial statements such as bridging the gap in management, availing credit from lenders and use for investors. It discusses the importance of financial statements to management and importance to the shareholders. This chapter teaches you limitations of financial statements such as its dependence on historical costs, and how assets may not realise.

Chapter 4: Analysis of Financial Statements

Analysis of Financial Statements of Class 12 Accountancy Syllabus, teaches you about the meaning and analysis of financial statements, the significance of analysis of financial statements, and objectives of analysis of financial statements. It also teaches you about the tools of analysis of financial statements such as comparative statements, trend analysis, common-size statements, and cash flow analysis and ratio analysis. 

It also discusses the limitations of the analysis of financial statements. Here you will read in details about the uses of financial statements in bridging the gap in management, availing credit from lenders.  

Chapter 5: Accounting Ratios

Accounting Ratios of Class 12 Accountancy introduces you to the meaning of accounting ratios, objectives of ratio analysis, advantages and disadvantages of ratio analysis, limitations of ratio analysis, types of ratios, liquidity ratios, solvency ratios, activity (or turnover) ratio, profitability ratios, classification of accounting ratios, items which are included in current assets, items which are included in current liabilities and items included in liquid or quick assets.

Further, you will also be taught about debt to equity ratio, proprietary ratio, total assets to debt ratio, interest coverage ratio, stock or inventory turnover ratio, average collection ratio, average payment period, operating profit ratio, net profit ratio, gross profit ratio and net credit purchase. 

Chapter 6: Cash Flow Statement

Cash Flow Statement of Class 12 Accountancy explains you about cash and cash equivalents, what is operating cash flow, elements of cash flow, cash flow from operating activities, cash flow from investing activities and cash flow from financing activities. It teaches you various components of cash flow statements such as cash flow from the operation, additions to cash, subtractions from cash, cash flow from investing and cash flow from financing. 

Further, the chapter also teaches you about operating activities such as vouchers from sales of goods and services, interest returns, payment of Income-tax, the payment credited to suppliers for goods and services used for production, payment to salaries and wages, rent payments and additional operating expenses. It discusses in detail about cash flow calculation. 

Here, the chapter also throws light on the methods of cash flow statement such as direct and indirect method.