CBSE XII Accountancy paper : Last moment quick revision ( Financial Statement Analysis)

 

 

 

We have already discussed about quick revision points in partnership Accounts , company Accounts and accounting for not-for profit organisations in previous posts. You can go through the following  link given after this post. In this article lets discuss the quick revision points to remember at the last moment in section-3 (analysis of financial statements) carrying 20 marks.

• Cash Flow Statement is prepared as per AS-3 revised.


• Cash Flow statement is prepared to know the inflow and outflow of cash from different business activities for a particular time period.


• Inflow of cash from operating activities- Sale of goods, cash received for the services rendered, Royalty received, Commission received etc.


• Outflow of cash from Operating activities- Purchase of goods for cash, rent paid, salary paid, commission paid, wages paid, payment made for services.


• Inflow of cash from Investing activities- Rent received, sale of tangible assets, sale of intangible assets, Dividend received, interest received.


• Outflow of cash from Investing activities- Purchase of Non- current assets.


• Inflow of cash from financing activities- Issue of shares for cash, issue of debentures for cash, took loan, increase in bank overdraft etc.


• Outflow of cash from for financing activities- Buy back of equity shares, redemption of debentures, repayment of loan and preference shares, payment for bank overdrafts, payment of dividend (interim as well as proposed), interest on loan.


• Interest received and dividend received results in inflow of cash from operating activities in case of financing company.


• Interest on loan,interest on debentures and interest on investment are calculated on previous year balance if question is silent on the date.


• Depreciation is a non cash expense.


• Cash and cash equivalent means cash in hand, cash at bank, marketable securities.


• Current investment is treated as marketable securities in the absence of specific information.


• Decrease in value of intangible assets is treated as amortisation not sale in the absence of any specific information.


• Decrease in the value of tangible assets upto 15% is treated as depreciation in the absence of any specific information.


• Current ratio is also known as working capital ratio.


• Ideal current ratio is 2:1, ideal liquid ratio 1:1.


• Liquidity ratios are expressed in absolute form.


• Solvency ratios except ICR are expressed in absolute form.


• Turnover ratios are expressed in times form.


• Profitability ratios are expressed in percentage.


• Cost of goods sold can be considered as net sales if it is not possible to find out net sales.

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For quick revision points in partnership just go through the following link: CBSE XII Accountancy Paper : Last moment quick revision (Partnership)

CBSE XII Accountancy Paper : Last moment quick revision (Company and NPO)

CBSE XII Accountancy Paper : Last moment quick revision (Company and NPO)

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This section consist four chapters ( Accounting for Not for profit organisations, Accounting for share capital, Issue of debentures and redemption of debentures) carrying 25 marks as per CBSE blue print. Lets recall the important points/ entries/ items from this section as a part of your quick revision strategy to give your preparation a final touch.

Not for Profit organisations : 

• Receipt and Payment Account is prepared to find out the receipts and payments of an NPO during a year.


• Cash basis of accounting is followed while preparing Receipt and Payment Account.


• In the absence of any specific information Legacy is treated as capital receipt hence recorded as  liability.


• Any capital nature receipt or receipt for specific purpose is treated as liability.


• Income and Expenditure Account is prepared to know the income position of an NPO.


• Accrual basis of accounting is followed while preparing Income and Expenditure Account.


• Opening Balance Sheet is prepared to find out opening capital.


• In the absence of any specific information donation is treated as Income and donation for specific purpose as Liability.


• Creditors Account is prepared to find out Net credit purchases.


• Hidden depreciation need to be calculated when opening and closing balance of an asset has given.


• Hidden investment is calculated when Interest on investment is given but Investment is missing from question.

Share Capital:

• Minimum Subscription = 90% of the issued shares.


• Discount on reissue of forfeited shares can't be more than the forfeited amount.


• While making forfeiture entry Security Premium Reserve is debited with the amount unpaid for Premium. If premium is received no need to debit.


• While making entry for issue of shares other than cash, if number of shares comes in decimals ( Eg. 199.33 shares) take it as as 199 shares and settle the balance by cash.


• No need to show receipt entries if cash book has to be prepared.


• While making a journal entry for forfeiture of shares share capital is always debited with called money out of face value of shares.


• No need to show calls in arrear and calls in advance account until and unless it is instructed in question.

Issue and Redemption of Debentures : 

• DRR- 25% of face value on outstanding balances of debentures.


• DRI- 15% of face value of redeemed value of debentures.


• Exception of DRR and DRI- Banking company, Financial Company, Housing company, Fully convertible debentures.


• Create a DRR of 100% if company is having sufficient profit.


• Interest on debentures and interest on DRI is not shown until clearly instructed.


• DRI is made on 30th April prior to the year of redemption, if not specified in question.


• Loss on issue of debentures are written off from books utilising Security premium reserve balance and then profit.


• Loss on issue of debentures are written off from books in the ratio of outstanding balances in debentures account at the end of year.

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For quick revision points in partnership just go through the following link: Partneship quick revision points

CBSE XII Accountancy Paper : Last moment quick revision (Partnership)

The countdown for CBSE XII Accountancy paper has begin. Just 6 days to go for exam. Students are giving final touch to their preparation. This is the time to be wise and selective while going through the revision. If you are also little bit confused with the topic you should go through at last moment in Accountancy. This post may help you to give your studies a final touch. This post is divided in three parts. In part-1, I am going to discuss the chapter wise important entries/items/points to be kept in mind and just go through once as a strategy of  quick revision.

 Partnership (35 Marks)

Fundamentals of Partnership :

• Provisions of Partnership Act in the absence of Partnership deed ( No salary, No commission, No IOC , No IOD, PSR- Equal, IOL-6% P.A.).


• There are only two cases when capital is treated as fixed capital: First when it is clearly specified in question or second when Partner's Current Account has given.


• We need to prepare Two accounts in case when Capital is fluctuating Profit and Loss Appropriation Account and Partner's Capital Account.


• We need to prepare three accounts in case when Capital is fixed Profit and Loss Appropriation Account, Partner's Capital Account and Partner's Current Account.


• Profit and Loss Account and Profit and Loss Appropriation Account is Nominal Account, whereas Partner's Capital Account and Partner's Current Account is Personal Account.


• Interest on loan is a charge so it has to be given even in case of loss.


• Interest on loan and Manager's Commission is a part of Profit and Loss Account. So it has to be shown in Dr. side of Profit and Loss Account as a part of working notes or deduct it directly from Net Profit while preparing Profit and Loss Appropriation Account.


• Interest on Capital is always calculated on Opening Capital.


• Drawing out of Capital is shown in Dr. side of Partner's Capital Account in both of the cases whether Capital is fixed or Fluctuating.

• If expenses of the firm are more than profit.  In the case necessary adjustments is to be made in contribution ratio.

Valuation of Goodwill :

• Factors affecting value of goodwill ( Quality, location, Managerial efficiency, time, patents, contracts etc.)


• Self generated goodwill is written off from books.


• Need for valuation of Goodwill (Admission, retirement, psr, Death, two firms join hands, amalgamation and acquisition).


• Abnormal profits are deducted and abnormal losses are added back in profit while calculating value of goodwill.

 Change in Profit Sharing Ratio:

• Gaining partner is the partner who gain their share due to reconstitution of partnership firm.


• Sacrificing partner is the partner who sacrifice their share due to reconstitution of partnership firm.


• Accumulated Loss, Advertising Suspense, Goodwill(Appeared)- to be debited in Partner's Capital Account in Old Ratio.


• Accumulated Profit/ General Reserve- In the absence of any specific information credited to Partner's Capital Account in old ratio. In the case when it has to be shown in new balance sheet/books- adjusted in SR/GR.


• Gaining partner is always debited and Sacrificing partner is always credited.


• Revaluation Account is also known as Profit and Loss Adjustment Account.


• Revaluation Account is a Nominal Account.


• Revaluation Account  is prepared in case of reconstitution of firm.


• Gaining ratio and sacrificing ratio is calculated in case of reconstitution of firm.


• Memorandum Revaluation Account is prepared when altered values are not updated in reconstituted balance sheet.

 Admission of  partner:

• A partner can be admitted by mutual consent of all partners.


• A person with unsound mind, insolvent or insane can't be admitted as a partner.


• Why there is a need to admit a partner ( Capital, skills, time devotion, Goodwill).


• Whenever a partner is admitted he/she contribute Premium for goodwill and capital may be in cash or in form of goods or assets.


• A minor can be admitted as a partner but doesn't participate in decision making nor bear risk or contribute for losses.


• Stock or any other tangible asset was found to be undervalued- credited to Revaluation Account.


• Stock or any other tangible asset was found to be overvalued- debited to Revaluation Account.


• Unexpired Insurance premium - credited to revaluation account.


• Creditors were written back - credited to revaluation account.


• If a partner is unable to bring amount of premium is cash, his/ her Capital Account is debited or current account is opened as per instruction given. In the absence of any specific information capital account has to be debited.


• While making capital adjustment necessary surplus or deficit is settled through cash or current account as per instruction given in question.

Retirement /death of partner : 

• There is no need to prepare loan Account if not instructed to do so.


• Profit and Loss Suspense Account denote that profit or loss is estimated.


• While calculating profit, IOC, IOD, salary consider number of months in case of death/ retirement during the year.

 Dissolution of firm: 

• Dissolution of firm and dissolution of partnership are different from each other. Dissolution of firm means firm comes to an end whereas dissolution of partnership means partnership comes to an end.


• In the absence of any specific information if assets remain unsold it is assumed that it was valueless.


• In the absence of any specific information liabilities are paid at their book vale.


• Means of dissolution of firm ( by notice, by mutual consent, completion of project, by court, happening of an event).


• Partner's loan is settled by preparing Partner's Loan Account.

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For quick revision points in NPO and Company just go through the following link: NPO and Company quick revision points

 

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ICWA/CMA Course at a Glance

In the age of cut throat competition cost reduction technique has become essential part of business strategy for survival and growth. Now companies are hiring professionals who is having the depth knowledge to manage business within available resources. Apart from private sector there is a huge demand of Cost Accountants in public sector also. Navratna companies and Banks are also hiring Cost Accountants. The two main reasons why Cost Accountants are in great demand first there is a very low supply of Cost Accountants as compared to demand and second it has become essential for every  organisation to work on cost reduction. If you don't want to go for job, you can work as independent professional or even you are having interest in business you can start your business. In simple words it is most trending course for commerce students having ocean of opportunities . It is also one of the highest paying job nowadays. So if you are a commerce student with perfection in Accountancy subject, ICWA can be a wiser career choice. But do remember one thing that this course expect a hard work and dedication, if you can just go ahead.

Duties of a Cost Accountant :

• Make a plan to minimise cost.


• Make a strategy to take company on heights through optimum utilisation of resources.


• Collection and planning of data to analyse cost.


• Preparation of financial reports related to revenue and expenses.


• Maintaining Cost Accountant

Job Title :                         

1. Managing Director

2. Cost Accountant

3. Cost Controller

4. Chief Auditor

5. Finance Controller

6. Financial Consultant

7. Finance Director

8. Head Accountant

9. Accounts Manager

Stages and Eligibility :

ICWA/CMA course is divided in three stages:

Foundation : If you have passed 12th you can enroll for foundation course, even if you are appearing for 12th exam you can enroll.

Intermediate : To enroll for intermediate course you should have 12th certificate and have cleared foundation. A graduate can directly enroll for intermediate .

Final: After clearing intermediate you can apply for final level.

Subjects:                                  

Fees:

          

  For more details regarding the syllabus and course go through the following link:

•   http://icmai.in/upload/Students/CMA-Course-Glance.pdf


• http://icmai.in/studentswebsite/

How to Score 95+ in XII Accountancy

 

CBSE and other state boards have released the XII board date sheet. Exams are going to start from first week of March in CBSE and state boards and in some state boards from last week of February. For Commerce students Accountancy is one of the most important and most challenging paper. But keep in mind that it is also one of the most scoring subject. You can't expect a good merit while ignoring Accountancy. If you are also a XII Commerce student and going to appear for board paper just keep in mind the following points to secure excellent marks in Accountancy.

1. Don't be in hurry while reading the questions: One of the common mistake committed by Accountancy students is they didn't pay attention while reading questions. Don't ever try to save time while reading questions even if you think that you are perfect with topic asked in the question. First read questions carefully then only go for answer.


2. Write items and entries in proper format : While passing journal entries or writing items in ledger accounts or Balance Sheet ensure that you are following proper format. If you are passing journal entries do remember to go through the proper journal format even if a single entry has to be passed. While preparing ledger Accounts ensure that you have written Dr. and Cr. on both of the side of the account, date is written in bracket if required, To and By respectively in D and Cr side. While preparing Cash Flow Statement don't forget to write Name of the company ,Cash Flow Statement ,as per AS-3 revised and date. Also carry the amount from inner column to outer column in proper way. Note it down that student is awarded marks even if some entries are wrong only when he has followed the format.


3. Write Narration : One common mistakes committed by students in Accountancy paper is not writing narration. Don't do this narration is a part of journal entry and checker expect the proper explanation of entries passed. You are expecting full marks from checker give a proper but short explanation in form of narration.


4. Avoid overwriting : Strictly avoid overwriting in Accountancy paper. If an amount has wrongly being written and you would like to change it just cut the figure and write the amount separately rather to overwrite it.


5. Show your workings clearly : Note it down that Working notes are the parts of your solution. So do your working clearly in a systematic way just below your solution or make a separate space for workings.


6. Be decisive while selecting choices: A good news is there for students CBSE has increased the internal choices in board paper. As per new guidelines issued by CBSE almost 33% to 45% questions in question paper would have internal choices. You can read the full guideline of CBSE by clicking the following link http://www.vedantaclasses.in. Be  decisive while selecting the internal option as per your perfection and hold on the topic.


7. Time Management : One of the most challenging task is the completion of paper on time. Accountancy paper is very lengthy as compared to other commerce subjects so make a proper strategy related to  paper completion on time. Plan 3 hours wisely and set the standard time for each part and each category of questions and strictly follow it.


8. Don't give extra time to any question: This is one of the most blunder mistake committed by Accountancy students in board papers. Sometimes while solving a question student is so much confident that balance sheet will match, but it didn't. Now what he did to check the error committed because of his confident again and again . It is suicidal decision and strictly avoid this. You can check it once but still if error is not found just leave it and go ahead. You can check the error if some sphere time left at the end.


9. Follow Hierarchy : It is not compulsory but desired. If it is possible and you are knowing all the questions just try to follow a hierarchy while attempting the questions to make a positive impression in front of checker. One more thing you can do is try to start paper from last one if you are comfortable.


10. Attempt all questions: Don;t leave any question unattempted even if are not knowing few entries. Just do it remember if you will leave it unattempted you will lose full marks but if will attempt with some wrong entries but proper format you will definitely be awarded some marks.


11. Don't put your brain on answer sheet : One common problem with Accountancy student is he or she put her brain on paper. Don't do this. Read carefully what is asked in question calculate, prepare ledger accounts or pass journal entries. You have to strictly answer what have been asked. Suppose in Admission question it is asked to journalise and you have prepared ledger accounts , definitely it was wastage of time and you will not be awarded with marks.


12. Give notes if required: I remember a question asked before three years in CBSE board exams in Cash Flow Statement. There was an item 'Short term provisions' but didn't specified whether it is proposed divided or provision for taxation or something else. Students get confused in such a case give a note and assume as per your convenience. You will be awarded full marks. (Copyright@vedantaclasses.in) 

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Good News : CBSE has increased the internal choices in Upcoming board exams

After discussing to experts and getting the feedback from various stakeholders CBSE has decided to change the question paper pattern for the classes X and XII for upcoming board exams. To make exam pattern more liberal and student friendly CBSE has increased the internal choices in question papers in mostly subjects for X and XII board exams. Definitely it is cheerful moment for the students and is a great relief for them. The internal choices will be given in all categories of questions and will be almost 33% of total weightage. As per CBSE these changes will be implemented from upcoming board exams. CBSE has issued sample papers and marking schemes for 2018-19 as per new pattern and can be downloaded from www.cbseacademic.nic.in  and cbse.nic.in. The new pattern will definitely be helpful for students as they are having more choices. Here is a list of the subjects where internal choices will be given.                                                        Class-XII

1. Accountancy


2. Business Studies


3. Economics


4. Mathematics


5. Physical Education


6. Physics


7. Chemistry


8. Hindi


9. English                                                                  CLASS-X


10. Science


11. Social Science


12. Hindi


13. Mathematics


14. Home Science


15. Sanskrit                                              To read the circular and to see the complete list click on the following link      http://cbseacademic.nic.in/web_material/Notifications/2018/33_Notification_2018.pdf

10 Tips to score 95+ in Business Studies in CBSE

" Aim for the moon. If you miss, you may hit a star".                                         W. Clement Stone 

Business studies is one of the most important and scoring subject for commerce students in CBSE as well as in ICSE and other state boards. Because of introducing case studies by CBSE, Business Studies has become challenge as well as opportunity for the students. Main motive of introducing case studies in Business Studies is to make this subject interesting and behavioral. It is a very appreciable move by CBSE to make students a good learner through understanding. CBSE is one of the most recognised exam conducting body of India. That's why experts are having close watch on CBSE exams and are giving their opinions to students to score high in board exams. Being a student you also want to clear the exam with flying colors. If you are a Commerce student and going to appear for XII board exam. These tips may help you scoring high in board exams in Business Studies.

1. Be attentive while reading questions : This is first and most important point is to be careful and attentive while reading questions. Never be in hurry while reading questions specially case studies, as case studies consist the key words which is helpful in identification and  answer writing. Don't ever think to save time while reading questions otherwise it may result in losing marks in board exams.


2. Be strict with word limit: While writing the answer in Business Studies follow the word limit guidelines by CBSE. Don't go beyond the word limit. For Example if you have been asked , Who is the father of Scientific Management in 1 mark. As per CBSE guidelines you are supposed to answer in one word to one sentence in case of 1 mark questions. So simply write the answer as "F.W.Taylor". Be strict with word limit will also be  helpful in completion of question paper on time.


3. Write to the point answer : You may have a very good command over the question asked, but you have to write the answer only that has exactly being asked. Don't ever try to put whole brain on the paper. It gives the examiner  a good impression and definitely you will be rewarded in the form of marks.


4. Use cartoons and diagrams: The most impressive thing in Business Studies paper is the way,  you are presenting your answer in front of checker. To give your answer a creative look use cartoons and diagrams if it is expected in question. It gives  a very positive impression of yours  in front of examiner. Do remember that checker doesn't know you by face, so introduce yourself through your answer sheet.


5. Make a meaningful combination of headings and paragraphs: While answering the descriptive type questions make a meaningful and proper combination of headings and paragraphs. Usually half of the marks are assigned for heading and half for explanation. In the case even after good explanation you will lose the marks if heading was expected but was missing from your answer.


6. Follow NCERT text books: Generally key terms used in case studies is copied from NCERT text books. So it is advisable to go through the NCERT for case studies. You can take the help of other reference books for practice but for study strictly go with NCERT text books.


7. Follow hierarchy while attempting questions: If  you are comfortable with all the questions try to follow a hierarchy while attempting the questions. You can start from last question and end with first one or start from first one and end with last one. It is not compulsory point and can be avoided but definitely it makes a first impression on checker.


8. Avoid overwriting: Business Studies is theoretical paper so it is expected from student to avoid overwriting and unnecessary cutting. Also ensure neatness and cleanliness in your answer sheet to put a first positive impression on checker. Also avoid using multi colors pens while writing answers, as you are writing business studies paper not arts.


9. Time Management : Before entering into examination hall ensure that you are going to complete the questions paper on time. You will not face any issue related to time if you have allocated the time for each question. Never give extra time to any question under any circumstances.


10. Never quit till final bell is rung: Try to attempt all the questions even if you are not knowing few ones correct answer. It's a theoretical paper you can write similar answers because nothing is better than something. If you have some sphere time in last hours, go for a quick revision.

20 Days Strategy for CBSE Exams

CBSE date sheet has been released for X and XII board for the academic session 2018-19 and as per CBSE date sheet exams are going to start from 2nd March this year . Most of the students have freed from CBSE practicals . It means students have almost 20 days to give their studies a final touch . Last 20 days are very much crucial to decide your performance in board exams . These 20 days should be managed in such a way to utilise it to the best extent . It is possible only when you make a proper strategy for these 20 days . So lets take a pen and diary to make a plan . Here are the things you can consider while preparing your 20 days strategies plan .

1. Determine your target : First thing you have to do is to determine the target you want to achieve . Do remember that you don't have the 365 days to achieve your target . So while determining the target ensure that it is feasible and achievable . Write your target in bold letters in front of your study table . It helps to recall  every time when ever you will go for studies .


2. Evaluate your Current position : After setting  a target evaluate your current position . There is saying " Telling a lie with yourself is most dangerous thing" . So Be honest and critic while evaluating your current position . You can make a proper plan only when you are honest and critic .


3. Make a Comparative study : Now make a comparative study of the target you have determined and your current position . What efforts and resources are required  to move forward from your current position to target .


4. Be in touch with teachers : Always remember that teacher is more knowledgeable and experienced than you . So it is always advisable to be in regular touch of teachers till exams . May be you are well prepared but a minor mistake may cause a difference . Be in touch doesn't means to go regularly to schools or tuition . Just go through him when ever you think that you are looking for  guidance .


5. Avoid negative people : It is best to avoid negative people till the exams are over . Negative people will give you hundreds of reasons that you can't do . But be confident and say to yourself ' I will '. Even you can write this word in front of your study table that will boost your morale .


6. Give equal importance to every subject : Keep in mind this fact that each and every subject is important . Your report card talks about the aggregate and admissions to the colleges and professional courses are determined on the basis of your aggregate  marks . So give every subject equal importance .


7. Avoid using social media these days : It is very crucial time to prove yourself . So it's better not to waste your valuable time on unproductive movements . Ensure you are not wasting your time on unproductive movements . Using the social media specially facebook, playing online games and watching cricket is just wastage of time . Even if you are using ensure that you are not addicted for this . Watching inspirational videos, news and morning and evening walk can be best alternatives to make yourself fresh and energetic during these days .


8. Go through the blue prints : You don't have the enough time to read and revise everything in deep . So it's better to take a blue print of every subject as per CBSE guidelines and make a study plan accordingly .


9. Mock Test : Judge yourself regularly by giving mock test . It helps you to boost you confidence level and time management . For mock test only go through the CBSE official sample papers or the sample papers prepared strictly as per CBSE blue prints and guidelines .


10. Take care of your health : Last and most important thing is to take care of your health . Avoiding taking junk foods and any thing that may affect your health . Also take care and ensure that you are not going to suffer with any injury till the exams . Your whole strategy will work only when you are healthy and fit.  (Copyright@vedantaclasses.in )