Syllabus: Accountancy for Class 11 | Accountancy Class 11 - Commerce PDF Download

 Page 1


 
Accountancy (Code No.055) 
Course Structure 
Class-XI (2023-24) 
Theory: 80 Marks          3 Hours 
Project: 20 Marks 
Units  Periods Marks 
Part A: Financial Accounting-1   
 Unit-1: Theoretical Framework  25 12 
 Unit-2: Accounting Process 115 44 
Part B: Financial Accounting-II   
 Unit-3: Financial Statements of Sole Proprietorship 60 24 
Part C: Project Work 20 20 
 
PART A: FINANCIAL ACCOUNTING - I        
 
Unit-1: Theoretical Frame Work          
Units/Topics Learning Outcomes 
Introduction to Accounting                      
? Accounting- concept, meaning, as a source 
of information,  objectives, advantages and 
limitations, types of accounting information; 
users of accounting information and their 
needs. Qualitative Characteristics of 
Accounting Information. Role of Accounting in 
Business. 
? Basic Accounting Terms- Entity, Business 
Transaction, Capital, Drawings. Liabilities 
(Non Current and Current). Assets (Non 
Current, Current); Expenditure (Capital and 
Revenue), Expense, Revenue, Income, 
Profit, Gain, Loss, Purchase, Sales, Goods, 
Stock, Debtor, Creditor, Voucher, Discount 
(Trade discount and Cash Discount) 
 
Theory Base of Accounting                    
? Fundamental accounting assumptions: 
GAAP: Concept 
? Basic Accounting Concept : Business Entity, 
After going through this Unit, the students will be 
able to: 
? describe the meaning, significance, 
objectives, advantages and limitations of 
accounting in the modem economic 
environment with varied types of business 
and non-business economic entities. 
? identify / recognise the individual(s) and 
entities that use accounting information for 
serving their needs of decision making. 
? explain the various terms used in accounting 
and differentiate between different related 
terms like current and non-current, capital 
and revenue. 
? give examples of terms like business 
transaction, liabilities, assets, expenditure 
and purchases. 
? explain that sales/purchases include both 
cash and credit sales/purchases relating to 
the accounting year. 
Page 2


 
Accountancy (Code No.055) 
Course Structure 
Class-XI (2023-24) 
Theory: 80 Marks          3 Hours 
Project: 20 Marks 
Units  Periods Marks 
Part A: Financial Accounting-1   
 Unit-1: Theoretical Framework  25 12 
 Unit-2: Accounting Process 115 44 
Part B: Financial Accounting-II   
 Unit-3: Financial Statements of Sole Proprietorship 60 24 
Part C: Project Work 20 20 
 
PART A: FINANCIAL ACCOUNTING - I        
 
Unit-1: Theoretical Frame Work          
Units/Topics Learning Outcomes 
Introduction to Accounting                      
? Accounting- concept, meaning, as a source 
of information,  objectives, advantages and 
limitations, types of accounting information; 
users of accounting information and their 
needs. Qualitative Characteristics of 
Accounting Information. Role of Accounting in 
Business. 
? Basic Accounting Terms- Entity, Business 
Transaction, Capital, Drawings. Liabilities 
(Non Current and Current). Assets (Non 
Current, Current); Expenditure (Capital and 
Revenue), Expense, Revenue, Income, 
Profit, Gain, Loss, Purchase, Sales, Goods, 
Stock, Debtor, Creditor, Voucher, Discount 
(Trade discount and Cash Discount) 
 
Theory Base of Accounting                    
? Fundamental accounting assumptions: 
GAAP: Concept 
? Basic Accounting Concept : Business Entity, 
After going through this Unit, the students will be 
able to: 
? describe the meaning, significance, 
objectives, advantages and limitations of 
accounting in the modem economic 
environment with varied types of business 
and non-business economic entities. 
? identify / recognise the individual(s) and 
entities that use accounting information for 
serving their needs of decision making. 
? explain the various terms used in accounting 
and differentiate between different related 
terms like current and non-current, capital 
and revenue. 
? give examples of terms like business 
transaction, liabilities, assets, expenditure 
and purchases. 
? explain that sales/purchases include both 
cash and credit sales/purchases relating to 
the accounting year. 
Money Measurement, Going Concern, 
Accounting Period, Cost Concept, Dual 
Aspect, Revenue Recognition, Matching, Full 
Disclosure, Consistency, Conservatism,  
? Materiality and Objectivity 
? System of Accounting. Basis of Accounting: 
cash basis and accrual basis 
? Accounting Standards: Applicability of 
Accounting Standards (AS) and Indian 
Accounting Standards (IndAS) 
? Goods and Services Tax (GST): 
Characteristics and Advantages. 
 
? differentiate among income, profits and gains. 
? state the meaning of fundamental accounting 
assumptions and their relevance in 
accounting. 
? describe the meaning of accounting 
assumptions and the situation in which an 
assumption is applied during the accounting 
process. 
? explain the meaning, applicability, objectives, 
advantages and limitations of accounting 
standards. 
? appreciate that various accounting standards 
developed nationally and globally are in 
practice for bringing parity in the accounting 
treatment of different items. 
? acknowledge the fact that recording of 
accounting transactions follows double entry 
system. 
? explain the bases of recording accounting 
transaction and to appreciate that accrual 
basis is a better basis for depicting the 
correct financial position of an enterprise. 
? Explain the meaning, advantages and 
characteristic of GST. 
 
Unit-2: Accounting Process         
 
Units/Topics Learning Outcomes 
Recording of Business Transactions         
? Voucher and Transactions: Source 
documents and Vouchers, Preparation of 
Vouchers, Accounting Equation Approach: 
Meaning and Analysis, Rules of Debit and 
Credit. 
? Recording of Transactions: Books of Original 
Entry- Journal 
? Special Purpose books: 
? Cash Book: Simple, cash book with bank 
column and petty cashbook 
After going through this Unit, the students will be 
able to: 
? explain the concept of accounting equation 
and appreciate that every transaction affects 
either both the sides of the equation or a 
positive effect on one item and a negative 
effect on another item on the same side of 
accounting equation. 
? explain the effect of a transaction (increase or 
decrease) on the assets, liabilities, capital, 
revenue and expenses. 
Page 3


 
Accountancy (Code No.055) 
Course Structure 
Class-XI (2023-24) 
Theory: 80 Marks          3 Hours 
Project: 20 Marks 
Units  Periods Marks 
Part A: Financial Accounting-1   
 Unit-1: Theoretical Framework  25 12 
 Unit-2: Accounting Process 115 44 
Part B: Financial Accounting-II   
 Unit-3: Financial Statements of Sole Proprietorship 60 24 
Part C: Project Work 20 20 
 
PART A: FINANCIAL ACCOUNTING - I        
 
Unit-1: Theoretical Frame Work          
Units/Topics Learning Outcomes 
Introduction to Accounting                      
? Accounting- concept, meaning, as a source 
of information,  objectives, advantages and 
limitations, types of accounting information; 
users of accounting information and their 
needs. Qualitative Characteristics of 
Accounting Information. Role of Accounting in 
Business. 
? Basic Accounting Terms- Entity, Business 
Transaction, Capital, Drawings. Liabilities 
(Non Current and Current). Assets (Non 
Current, Current); Expenditure (Capital and 
Revenue), Expense, Revenue, Income, 
Profit, Gain, Loss, Purchase, Sales, Goods, 
Stock, Debtor, Creditor, Voucher, Discount 
(Trade discount and Cash Discount) 
 
Theory Base of Accounting                    
? Fundamental accounting assumptions: 
GAAP: Concept 
? Basic Accounting Concept : Business Entity, 
After going through this Unit, the students will be 
able to: 
? describe the meaning, significance, 
objectives, advantages and limitations of 
accounting in the modem economic 
environment with varied types of business 
and non-business economic entities. 
? identify / recognise the individual(s) and 
entities that use accounting information for 
serving their needs of decision making. 
? explain the various terms used in accounting 
and differentiate between different related 
terms like current and non-current, capital 
and revenue. 
? give examples of terms like business 
transaction, liabilities, assets, expenditure 
and purchases. 
? explain that sales/purchases include both 
cash and credit sales/purchases relating to 
the accounting year. 
Money Measurement, Going Concern, 
Accounting Period, Cost Concept, Dual 
Aspect, Revenue Recognition, Matching, Full 
Disclosure, Consistency, Conservatism,  
? Materiality and Objectivity 
? System of Accounting. Basis of Accounting: 
cash basis and accrual basis 
? Accounting Standards: Applicability of 
Accounting Standards (AS) and Indian 
Accounting Standards (IndAS) 
? Goods and Services Tax (GST): 
Characteristics and Advantages. 
 
? differentiate among income, profits and gains. 
? state the meaning of fundamental accounting 
assumptions and their relevance in 
accounting. 
? describe the meaning of accounting 
assumptions and the situation in which an 
assumption is applied during the accounting 
process. 
? explain the meaning, applicability, objectives, 
advantages and limitations of accounting 
standards. 
? appreciate that various accounting standards 
developed nationally and globally are in 
practice for bringing parity in the accounting 
treatment of different items. 
? acknowledge the fact that recording of 
accounting transactions follows double entry 
system. 
? explain the bases of recording accounting 
transaction and to appreciate that accrual 
basis is a better basis for depicting the 
correct financial position of an enterprise. 
? Explain the meaning, advantages and 
characteristic of GST. 
 
Unit-2: Accounting Process         
 
Units/Topics Learning Outcomes 
Recording of Business Transactions         
? Voucher and Transactions: Source 
documents and Vouchers, Preparation of 
Vouchers, Accounting Equation Approach: 
Meaning and Analysis, Rules of Debit and 
Credit. 
? Recording of Transactions: Books of Original 
Entry- Journal 
? Special Purpose books: 
? Cash Book: Simple, cash book with bank 
column and petty cashbook 
After going through this Unit, the students will be 
able to: 
? explain the concept of accounting equation 
and appreciate that every transaction affects 
either both the sides of the equation or a 
positive effect on one item and a negative 
effect on another item on the same side of 
accounting equation. 
? explain the effect of a transaction (increase or 
decrease) on the assets, liabilities, capital, 
revenue and expenses. 
? Purchases book 
? Sales book 
? Purchases return book 
? Sales return book 
? Journal proper 
Note: Including trade discount, freight and cartage 
expenses for simple GST calculation.  
? Ledger: Format, Posting from journal and 
subsidiary books, Balancing of accounts 
                                                                       
Bank Reconciliation Statement: 
? Need and preparation, Bank Reconciliation 
Statement  
Depreciation, Provisions and Reserves     
? Depreciation: Meaning, Features, Need, 
Causes, factors 
? Other similar terms: Depletion and 
Amortisation 
? Methods of Depreciation: 
i. Straight Line Method (SLM) 
ii. Written Down Value Method (WDV) 
Note: Excluding change of method 
? Difference between SLM and WDV; 
Advantages of SLM and WDV 
? Method of recoding depreciation 
i. Charging to asset account 
ii. Creating provision for 
depreciation/accumulated depreciation 
account 
? Treatment of disposal of asset 
? Provisions, Reserves, Difference Between 
Provisions and Reserves. 
? Types of Reserves: 
i. Revenue reserve 
ii. Capital reserve 
iii. General reserve 
iv. Specific reserve 
v. Secret Reserve 
? Difference between capital and revenue 
reserve 
 
? appreciate that on the basis of source 
documents, accounting vouchers are 
prepared for recording transaction in the 
books of accounts. 
? develop the understanding of recording of 
transactions in journal and the skill of 
calculating GST. 
? explain the purpose of maintaining a Cash 
Book and develop the skill of preparing the 
format of different types of cash books and 
the method of recording cash transactions in 
Cash book. 
? describe the method of recording 
transactions other than cash transactions as 
per their nature in different subsidiary books . 
? appreciate that at times bank balance as 
indicated by cash book is different from the 
bank balance as shown by the pass book / 
bank statement and to reconcile both the 
balances, bank reconciliation statement is 
prepared. 
? develop understanding of preparing bank 
reconciliation statement. 
? appreciate that for ascertaining the position of 
individual accounts, transactions are posted 
from subsidiary books and journal proper into 
the concerned accounts in the ledger and 
develop the skill of ledger posting. 
? explain the necessity of providing 
depreciation and develop the skill of using 
different methods for computing depreciation. 
? understand the accounting treatment of 
providing depreciation directly to the 
concerned asset account or by creating 
provision for depreciation account. 
? appreciate the method of asset disposal 
through the concerned asset account or by 
preparing asset disposal account. 
? appreciate the need for creating reserves and 
Page 4


 
Accountancy (Code No.055) 
Course Structure 
Class-XI (2023-24) 
Theory: 80 Marks          3 Hours 
Project: 20 Marks 
Units  Periods Marks 
Part A: Financial Accounting-1   
 Unit-1: Theoretical Framework  25 12 
 Unit-2: Accounting Process 115 44 
Part B: Financial Accounting-II   
 Unit-3: Financial Statements of Sole Proprietorship 60 24 
Part C: Project Work 20 20 
 
PART A: FINANCIAL ACCOUNTING - I        
 
Unit-1: Theoretical Frame Work          
Units/Topics Learning Outcomes 
Introduction to Accounting                      
? Accounting- concept, meaning, as a source 
of information,  objectives, advantages and 
limitations, types of accounting information; 
users of accounting information and their 
needs. Qualitative Characteristics of 
Accounting Information. Role of Accounting in 
Business. 
? Basic Accounting Terms- Entity, Business 
Transaction, Capital, Drawings. Liabilities 
(Non Current and Current). Assets (Non 
Current, Current); Expenditure (Capital and 
Revenue), Expense, Revenue, Income, 
Profit, Gain, Loss, Purchase, Sales, Goods, 
Stock, Debtor, Creditor, Voucher, Discount 
(Trade discount and Cash Discount) 
 
Theory Base of Accounting                    
? Fundamental accounting assumptions: 
GAAP: Concept 
? Basic Accounting Concept : Business Entity, 
After going through this Unit, the students will be 
able to: 
? describe the meaning, significance, 
objectives, advantages and limitations of 
accounting in the modem economic 
environment with varied types of business 
and non-business economic entities. 
? identify / recognise the individual(s) and 
entities that use accounting information for 
serving their needs of decision making. 
? explain the various terms used in accounting 
and differentiate between different related 
terms like current and non-current, capital 
and revenue. 
? give examples of terms like business 
transaction, liabilities, assets, expenditure 
and purchases. 
? explain that sales/purchases include both 
cash and credit sales/purchases relating to 
the accounting year. 
Money Measurement, Going Concern, 
Accounting Period, Cost Concept, Dual 
Aspect, Revenue Recognition, Matching, Full 
Disclosure, Consistency, Conservatism,  
? Materiality and Objectivity 
? System of Accounting. Basis of Accounting: 
cash basis and accrual basis 
? Accounting Standards: Applicability of 
Accounting Standards (AS) and Indian 
Accounting Standards (IndAS) 
? Goods and Services Tax (GST): 
Characteristics and Advantages. 
 
? differentiate among income, profits and gains. 
? state the meaning of fundamental accounting 
assumptions and their relevance in 
accounting. 
? describe the meaning of accounting 
assumptions and the situation in which an 
assumption is applied during the accounting 
process. 
? explain the meaning, applicability, objectives, 
advantages and limitations of accounting 
standards. 
? appreciate that various accounting standards 
developed nationally and globally are in 
practice for bringing parity in the accounting 
treatment of different items. 
? acknowledge the fact that recording of 
accounting transactions follows double entry 
system. 
? explain the bases of recording accounting 
transaction and to appreciate that accrual 
basis is a better basis for depicting the 
correct financial position of an enterprise. 
? Explain the meaning, advantages and 
characteristic of GST. 
 
Unit-2: Accounting Process         
 
Units/Topics Learning Outcomes 
Recording of Business Transactions         
? Voucher and Transactions: Source 
documents and Vouchers, Preparation of 
Vouchers, Accounting Equation Approach: 
Meaning and Analysis, Rules of Debit and 
Credit. 
? Recording of Transactions: Books of Original 
Entry- Journal 
? Special Purpose books: 
? Cash Book: Simple, cash book with bank 
column and petty cashbook 
After going through this Unit, the students will be 
able to: 
? explain the concept of accounting equation 
and appreciate that every transaction affects 
either both the sides of the equation or a 
positive effect on one item and a negative 
effect on another item on the same side of 
accounting equation. 
? explain the effect of a transaction (increase or 
decrease) on the assets, liabilities, capital, 
revenue and expenses. 
? Purchases book 
? Sales book 
? Purchases return book 
? Sales return book 
? Journal proper 
Note: Including trade discount, freight and cartage 
expenses for simple GST calculation.  
? Ledger: Format, Posting from journal and 
subsidiary books, Balancing of accounts 
                                                                       
Bank Reconciliation Statement: 
? Need and preparation, Bank Reconciliation 
Statement  
Depreciation, Provisions and Reserves     
? Depreciation: Meaning, Features, Need, 
Causes, factors 
? Other similar terms: Depletion and 
Amortisation 
? Methods of Depreciation: 
i. Straight Line Method (SLM) 
ii. Written Down Value Method (WDV) 
Note: Excluding change of method 
? Difference between SLM and WDV; 
Advantages of SLM and WDV 
? Method of recoding depreciation 
i. Charging to asset account 
ii. Creating provision for 
depreciation/accumulated depreciation 
account 
? Treatment of disposal of asset 
? Provisions, Reserves, Difference Between 
Provisions and Reserves. 
? Types of Reserves: 
i. Revenue reserve 
ii. Capital reserve 
iii. General reserve 
iv. Specific reserve 
v. Secret Reserve 
? Difference between capital and revenue 
reserve 
 
? appreciate that on the basis of source 
documents, accounting vouchers are 
prepared for recording transaction in the 
books of accounts. 
? develop the understanding of recording of 
transactions in journal and the skill of 
calculating GST. 
? explain the purpose of maintaining a Cash 
Book and develop the skill of preparing the 
format of different types of cash books and 
the method of recording cash transactions in 
Cash book. 
? describe the method of recording 
transactions other than cash transactions as 
per their nature in different subsidiary books . 
? appreciate that at times bank balance as 
indicated by cash book is different from the 
bank balance as shown by the pass book / 
bank statement and to reconcile both the 
balances, bank reconciliation statement is 
prepared. 
? develop understanding of preparing bank 
reconciliation statement. 
? appreciate that for ascertaining the position of 
individual accounts, transactions are posted 
from subsidiary books and journal proper into 
the concerned accounts in the ledger and 
develop the skill of ledger posting. 
? explain the necessity of providing 
depreciation and develop the skill of using 
different methods for computing depreciation. 
? understand the accounting treatment of 
providing depreciation directly to the 
concerned asset account or by creating 
provision for depreciation account. 
? appreciate the method of asset disposal 
through the concerned asset account or by 
preparing asset disposal account. 
? appreciate the need for creating reserves and 
Trial balance and Rectification of Errors        
? Trial balance: objectives, meaning and 
preparation 
(Scope: Trial balance with balance method only) 
? Errors: classification-errors of omission, 
commission, principles, and compensating; 
their effect on Trial Balance. 
? Detection and rectification of errors; 
(i) Errors which do not affect trial balance 
(ii) Errors which affect trial balance 
?  preparation of suspense account. 
 
also making provisions for events which may 
belong to the current year but may happen in 
next year. 
? appreciate the difference between reserve 
and reserve fund. 
? state the need and objectives of preparing 
trial balance and develop the skill of 
preparing trial balance. 
? appreciate that errors may be committed 
during the process of accounting. 
? understand the meaning of different types of 
errors and their effect on trial balance. 
? develop the skill of identification and location 
of errors and their rectification and 
preparation of suspense account. 
 
Part B: Financial Accounting - II                                                                         
 
Unit 3: Financial Statements of Sole Proprietorship        
 
Units/Topics Learning Outcomes 
Financial Statements 
Meaning, objectives and importance; Revenue and 
Capital Receipts; Revenue and Capital Expenditure; 
Deferred Revenue expenditure. Opening journal 
entry. Trading and Profit and Loss Account: Gross 
Profit, Operating profit and Net profit. Preparation. 
Balance Sheet: need, grouping and marshalling of 
assets and liabilities. Preparation. Adjustments in 
preparation of financial statements with respect to 
closing stock, outstanding expenses, prepaid 
expenses, accrued income, income received in 
advance, depreciation, bad debts, provision for 
doubtful debts, provision for discount on debtors, 
Abnormal loss, Goods taken for personal use/staff 
welfare, interest on capital and managers 
commission. Preparation of Trading and Profit and 
Loss account and Balance Sheet of a sole 
proprietorship with adjustments. 
 
After going through this Unit, the students will be 
able to: 
? state the meaning of financial statements the 
? purpose of preparing financial statements. 
? state the meaning of gross profit, operating 
profit and net profit and develop the skill of 
preparing trading and profit and loss account. 
? explain the need for preparing balance sheet. 
? understand the technique of grouping and 
marshalling of assets and liabilities. 
? appreciate that there may be certain items 
other than those shown in trial balance which 
may need adjustments while preparing 
financial statements. 
? develop the understanding and skill to do 
adjustments for items and their presentation 
in financial statements like depreciation, 
closing stock, provisions, abnormal loss etc. 
? develop the skill of preparation of trading and 
profit and loss account and balance sheet. 
Page 5


 
Accountancy (Code No.055) 
Course Structure 
Class-XI (2023-24) 
Theory: 80 Marks          3 Hours 
Project: 20 Marks 
Units  Periods Marks 
Part A: Financial Accounting-1   
 Unit-1: Theoretical Framework  25 12 
 Unit-2: Accounting Process 115 44 
Part B: Financial Accounting-II   
 Unit-3: Financial Statements of Sole Proprietorship 60 24 
Part C: Project Work 20 20 
 
PART A: FINANCIAL ACCOUNTING - I        
 
Unit-1: Theoretical Frame Work          
Units/Topics Learning Outcomes 
Introduction to Accounting                      
? Accounting- concept, meaning, as a source 
of information,  objectives, advantages and 
limitations, types of accounting information; 
users of accounting information and their 
needs. Qualitative Characteristics of 
Accounting Information. Role of Accounting in 
Business. 
? Basic Accounting Terms- Entity, Business 
Transaction, Capital, Drawings. Liabilities 
(Non Current and Current). Assets (Non 
Current, Current); Expenditure (Capital and 
Revenue), Expense, Revenue, Income, 
Profit, Gain, Loss, Purchase, Sales, Goods, 
Stock, Debtor, Creditor, Voucher, Discount 
(Trade discount and Cash Discount) 
 
Theory Base of Accounting                    
? Fundamental accounting assumptions: 
GAAP: Concept 
? Basic Accounting Concept : Business Entity, 
After going through this Unit, the students will be 
able to: 
? describe the meaning, significance, 
objectives, advantages and limitations of 
accounting in the modem economic 
environment with varied types of business 
and non-business economic entities. 
? identify / recognise the individual(s) and 
entities that use accounting information for 
serving their needs of decision making. 
? explain the various terms used in accounting 
and differentiate between different related 
terms like current and non-current, capital 
and revenue. 
? give examples of terms like business 
transaction, liabilities, assets, expenditure 
and purchases. 
? explain that sales/purchases include both 
cash and credit sales/purchases relating to 
the accounting year. 
Money Measurement, Going Concern, 
Accounting Period, Cost Concept, Dual 
Aspect, Revenue Recognition, Matching, Full 
Disclosure, Consistency, Conservatism,  
? Materiality and Objectivity 
? System of Accounting. Basis of Accounting: 
cash basis and accrual basis 
? Accounting Standards: Applicability of 
Accounting Standards (AS) and Indian 
Accounting Standards (IndAS) 
? Goods and Services Tax (GST): 
Characteristics and Advantages. 
 
? differentiate among income, profits and gains. 
? state the meaning of fundamental accounting 
assumptions and their relevance in 
accounting. 
? describe the meaning of accounting 
assumptions and the situation in which an 
assumption is applied during the accounting 
process. 
? explain the meaning, applicability, objectives, 
advantages and limitations of accounting 
standards. 
? appreciate that various accounting standards 
developed nationally and globally are in 
practice for bringing parity in the accounting 
treatment of different items. 
? acknowledge the fact that recording of 
accounting transactions follows double entry 
system. 
? explain the bases of recording accounting 
transaction and to appreciate that accrual 
basis is a better basis for depicting the 
correct financial position of an enterprise. 
? Explain the meaning, advantages and 
characteristic of GST. 
 
Unit-2: Accounting Process         
 
Units/Topics Learning Outcomes 
Recording of Business Transactions         
? Voucher and Transactions: Source 
documents and Vouchers, Preparation of 
Vouchers, Accounting Equation Approach: 
Meaning and Analysis, Rules of Debit and 
Credit. 
? Recording of Transactions: Books of Original 
Entry- Journal 
? Special Purpose books: 
? Cash Book: Simple, cash book with bank 
column and petty cashbook 
After going through this Unit, the students will be 
able to: 
? explain the concept of accounting equation 
and appreciate that every transaction affects 
either both the sides of the equation or a 
positive effect on one item and a negative 
effect on another item on the same side of 
accounting equation. 
? explain the effect of a transaction (increase or 
decrease) on the assets, liabilities, capital, 
revenue and expenses. 
? Purchases book 
? Sales book 
? Purchases return book 
? Sales return book 
? Journal proper 
Note: Including trade discount, freight and cartage 
expenses for simple GST calculation.  
? Ledger: Format, Posting from journal and 
subsidiary books, Balancing of accounts 
                                                                       
Bank Reconciliation Statement: 
? Need and preparation, Bank Reconciliation 
Statement  
Depreciation, Provisions and Reserves     
? Depreciation: Meaning, Features, Need, 
Causes, factors 
? Other similar terms: Depletion and 
Amortisation 
? Methods of Depreciation: 
i. Straight Line Method (SLM) 
ii. Written Down Value Method (WDV) 
Note: Excluding change of method 
? Difference between SLM and WDV; 
Advantages of SLM and WDV 
? Method of recoding depreciation 
i. Charging to asset account 
ii. Creating provision for 
depreciation/accumulated depreciation 
account 
? Treatment of disposal of asset 
? Provisions, Reserves, Difference Between 
Provisions and Reserves. 
? Types of Reserves: 
i. Revenue reserve 
ii. Capital reserve 
iii. General reserve 
iv. Specific reserve 
v. Secret Reserve 
? Difference between capital and revenue 
reserve 
 
? appreciate that on the basis of source 
documents, accounting vouchers are 
prepared for recording transaction in the 
books of accounts. 
? develop the understanding of recording of 
transactions in journal and the skill of 
calculating GST. 
? explain the purpose of maintaining a Cash 
Book and develop the skill of preparing the 
format of different types of cash books and 
the method of recording cash transactions in 
Cash book. 
? describe the method of recording 
transactions other than cash transactions as 
per their nature in different subsidiary books . 
? appreciate that at times bank balance as 
indicated by cash book is different from the 
bank balance as shown by the pass book / 
bank statement and to reconcile both the 
balances, bank reconciliation statement is 
prepared. 
? develop understanding of preparing bank 
reconciliation statement. 
? appreciate that for ascertaining the position of 
individual accounts, transactions are posted 
from subsidiary books and journal proper into 
the concerned accounts in the ledger and 
develop the skill of ledger posting. 
? explain the necessity of providing 
depreciation and develop the skill of using 
different methods for computing depreciation. 
? understand the accounting treatment of 
providing depreciation directly to the 
concerned asset account or by creating 
provision for depreciation account. 
? appreciate the method of asset disposal 
through the concerned asset account or by 
preparing asset disposal account. 
? appreciate the need for creating reserves and 
Trial balance and Rectification of Errors        
? Trial balance: objectives, meaning and 
preparation 
(Scope: Trial balance with balance method only) 
? Errors: classification-errors of omission, 
commission, principles, and compensating; 
their effect on Trial Balance. 
? Detection and rectification of errors; 
(i) Errors which do not affect trial balance 
(ii) Errors which affect trial balance 
?  preparation of suspense account. 
 
also making provisions for events which may 
belong to the current year but may happen in 
next year. 
? appreciate the difference between reserve 
and reserve fund. 
? state the need and objectives of preparing 
trial balance and develop the skill of 
preparing trial balance. 
? appreciate that errors may be committed 
during the process of accounting. 
? understand the meaning of different types of 
errors and their effect on trial balance. 
? develop the skill of identification and location 
of errors and their rectification and 
preparation of suspense account. 
 
Part B: Financial Accounting - II                                                                         
 
Unit 3: Financial Statements of Sole Proprietorship        
 
Units/Topics Learning Outcomes 
Financial Statements 
Meaning, objectives and importance; Revenue and 
Capital Receipts; Revenue and Capital Expenditure; 
Deferred Revenue expenditure. Opening journal 
entry. Trading and Profit and Loss Account: Gross 
Profit, Operating profit and Net profit. Preparation. 
Balance Sheet: need, grouping and marshalling of 
assets and liabilities. Preparation. Adjustments in 
preparation of financial statements with respect to 
closing stock, outstanding expenses, prepaid 
expenses, accrued income, income received in 
advance, depreciation, bad debts, provision for 
doubtful debts, provision for discount on debtors, 
Abnormal loss, Goods taken for personal use/staff 
welfare, interest on capital and managers 
commission. Preparation of Trading and Profit and 
Loss account and Balance Sheet of a sole 
proprietorship with adjustments. 
 
After going through this Unit, the students will be 
able to: 
? state the meaning of financial statements the 
? purpose of preparing financial statements. 
? state the meaning of gross profit, operating 
profit and net profit and develop the skill of 
preparing trading and profit and loss account. 
? explain the need for preparing balance sheet. 
? understand the technique of grouping and 
marshalling of assets and liabilities. 
? appreciate that there may be certain items 
other than those shown in trial balance which 
may need adjustments while preparing 
financial statements. 
? develop the understanding and skill to do 
adjustments for items and their presentation 
in financial statements like depreciation, 
closing stock, provisions, abnormal loss etc. 
? develop the skill of preparation of trading and 
profit and loss account and balance sheet. 
Incomplete Records 
Features, reasons and limitations. 
Ascertainment of Profit/Loss by Statement of Affairs 
method. (excluding conversion method) 
 
Part C: Project Work (Any One)        
1. Collection of source documents, preparation of vouchers, recording of transactions with the help of vouchers. 
2. Preparation of Bank Reconciliation Statement with the given cash book and the pass book with twenty to 
twenty-five transactions. 
3. Comprehensive project of any sole proprietorship business. This may state with journal entries and their 
ledgering, preparation of Trial balance. Trading and Profit and Loss Account and Balance Sheet. Expenses, 
incomes and profit (loss), assets and liabilities are to be depicted using pie chart / bar diagram. This may 
include simple GST related transactions.