Advanced Financial Accounting

The book has been prepared strictly according to the new syllabus for B.Com. Second Semester effective from academic session 2022-23 for H.N.B. Garhwal University, Srinagar Garhwal.

Some of the special features of this book are :

• In each chapter of the book final accounts have been closed on 31st March only.
• In each chapter Descriptive Answer Type Questions, Short Answer Type Questions and large number of M.C.Q. with Answer have been given.
  After going through the theory, illustrations and questions of this book, one can easily solve questions of university examinations.

Advanced Financial Accounting Syllabus For B.Com. IInd Semester of Hemvati Nandan Bahuguna Garhwal University

Course Objective : The course aims to help learners in attaining expertise in the field of advanced accounting related to the topics covered.

Course Outcomes: On successful completion of the course, the students will be able to: 1. Understand & compute the amount of claims for loss of stock & loss of profit. 2. Learn various methods of accounting for hire purchase transactions and deal with inter-departmental transfers and their accounting treatment. 3. Understand the accounting treatment of departmental undertaking. 4. Demonstrate various accounting treatments for dependent branch & independent branch. 5. Prepare the accounting for the dissolution of partnership firms.

Unit 1 : Insurance Claims for Loss of Stock Meaning, Needs and Advantages of Fire Insurance; Special terminologies in Fire Insurance Claims: Insurer, Insured, Premium, Salvage, Insurance Policy, Sum Assured, Under Insurance, Over insurance, Average Clause, Claim; Problems on Ascertainment of Fire Insurance Claim, including problems on loss of profits as consequential claim.

Unit 2 : Accounts from Incomplete Records Meaning; Features; Merits; Demerits; Types; Preparation of Statement of Affairs Account for calculation of Net Profit; Conversion of Single Entry System into Double Entry system; Need for Conversion; Preparation of Cashbook, Memorandum Trading Account, Total Debtors Account, Total Creditors Account, Bills Receivable Account, Bills Payable Account, Statement of Trading and Profit & Loss and Balance Sheet.

Unit 3 : Hire Purchase Accounting Meaning of Hire Purchase and Installment Payment System; Difference between Hire Purchase and Installment Payment System; Important Definitions: Hire Purchase Agreement, Hire Purchase Price, Cash Price, Hire Purchase Charges; Various methods of calculation of Interest; Calculation of Cash Price; Journal Entries and Ledger Accounts in the books of Hire Purchaser and Hire Vendor, including Default in Payment, Total Repossession and Partial Repossession by vendor.

Unit 4 : Departmental Accounting and Branch Accounting

(a) Departmental Accounting: Meaning and Features of Departmental Undertaking; Examples of Department Specific Expenses and Common Expenses; Need and Bases of Apportionment of Common Expenses; Preparation of Statement of Trading and Profit and Loss in Columnar form, Statement of General Profit and Loss and Balance Sheet; Simple problems involving Inter-Departmental Transfers (vertical form); Calculation of Stock Reserves.

(b) Branch Accounting: Meaning of Branch Accounts; Objectives and Advantages of Branch Accounting;

Types of Branches; Meaning and Features of Dependent Branches, Independent Branches, and Foreign

Branches; Methods of maintaining books of accounts by the Head Office; Debtors System; Ascertainment of Profit or Loss of Branch under Debtors System; Supply of goods at Cost Price and supply of goods at Invoice Price; Wholesale branch; Accounting of Independent Branch and Foreign Branch.

Unit 5 : Accounting for Dissolution of Partnership Firm Accounting of Dissolution of the Partnership Firm including Insolvency of partners, sale to a limited company, and piecemeal distribution.

Advanced Financial Accounting Contents:-

1. Insurance Claims For Loss of Stock
2. Accounts From Incomplete Records
3. Hire-Purchase Accounting
4. Instalment Payment System
5. Departmental Accounting
6. Branch Accounting
7. Dissolution of Partnership Firm—1 (Including Piecemeal Distribution)
8. Dissolution of Partnership Firm—2 (With Insolvency Of Partner)
9. Sale of Partnership Business To A Limited Company
10. Piecemeal Distribution