Financial Accounting

The book has been published strictly according to the new syllabus of B.Com (Hons) Semester I of Ranchi University, Kolhan Unversity, Chaibasa, St. Xavier’s College Ranchi, Marwari College Ranchi, Ranchi Women’s College of B.Com (Hons) Semester I According to New Syllabus (CBCS Pattern)

All the Chapters of the book have been thoroughly revised and updated. Statement of Profit and Loss and Balance Sheets of Companies in various chapters have been prepared in accordance with the Companies Act, 2013.

Chapters of ‘Accounting for Non-Profit Organization’, ‘Concept and Accounting of Depreciation’ and ‘Hire-Purchase System’ have been thoroughly revised. In this revised edition chapters on ‘Dissolution of Partnership Firm’ have also been revised and a new chapter ‘Piecemeal Distribution’ has been included.

While selecting the problems the author had kept in mind that the problems clearly illustrate the concepts and procedures discussed earlier. Besides, the problems included in the book serve as practice exercises for the preparation of universities and professional examinations. Most of the problems, that the author has included in the revised edition of the book, are from the latest examination question papers of various universities.

In our endeavor to make the book more student-oriented and fully meet their requirements, some important chapters have been dealt with in greater depth and have also been profusely illustrated with solved problems. While we have taken all possible care to see that the book has no errors, we would feel obliged if any mistakes are pointed out to us. Suggestions for further improvement would be more than welcome from both teachers and students.

SYLLABUS – B.Com. (Hons) Semester I | Paper–1.2 : FINANCIAL ACCOUNTING

RANCHI UNIVERSITY, RANCHI; MARWARI COLLEGE, RANCHI; RANCHI WOMEN’S COLLEGE, RANCHI;
NILAMBER-PITAMBER, UNIVERSITY, PALAMU

• Unit-I : Theoretical Framework
• I. Accounting as an information system, the users of financial accounting information and their needs.
  Qualitative characteristics of accounting information. Functions, advantages, and limitations of accounting.
  Branches of accounting, Bases of accounting, cash basis, and accrual basis.
• II. The nature of financial accounting principles, Concepts, benefits, accounting standards in India Salient
  features of Accounting Standard.
• Unit-II : Business Income
• I. Accounting for Non-Profit Organization. Preparation of Income and Expenditure A/c & Balance Sheet.
• II. The nature of depreciation. The accounting concept of depreciation. Factors in the measurement of
  Depreciation Methods of computing Depreciation: Straight Line method and diminishing balance method.
• III. Royalty Accounting
• Unit III : Accounting for Hire Purchase and Installment system
• Unit IV : Accounting for Inland Branches
  Concept of dependent Branches, Accounting aspects, cash and debtors system, stock and debtor system,
  Branch Final account System and Wholesale base system, independent branches: Concept accounting
  treatment, incorporation of Branche Trial Balance.
• Unit V : Accounting of Dissolution of Partnership Firm
  Accounting of Dissolution of the Partnership firm including Insolvency of partners, sale to an Ltd. company

ST. XAVIERS COLLEGE, RANCHI

• Unit-I
• (a) Theoretical Framework – Accounting as an information system, the users of financial accounting
  information and their needs. Qualitative characteristics of accounting information, functions, advantages
  and limitations of accounting. Branches of accounting, Bases of accounting, cash basis and accrual basis.
  The nature of financial accounting principles–Basic Concept, and conventions; entity, money measurement,
  going concern, cost realization, accruals, periodicity, consistency, prudence (conservatism), materiality
  and full disclosures.
  Financial Accounting Standards: Concept, benefits, the procedure for issuing accounting standards in India.
  International Financial Reporting Standards (IFRS): Need and procedures, convergence to IFRS.
  The distinction between INDIAN ACCOUNTING STANDARDS (IND ASs) and ACCOUNTING STANDARDS (ASs)
• (b) Accounting Process – From a recording of a business transaction fo preparation of trial balance including
  adjustments: capital and revenue expenditures and receipts preparation of profit and loss account and
  balance sheet (sole proprietorship only)
• Unit-II
• (a) Business Income
• (b) Measurement of business income–net income: the accounting period, the continuity doctrine, and matching
  concept. Objectives of income measurement.
  Revenue: concept, revenue recognition principles, recognition of expenses.
  The nature of depreciation. The accounting concept of depreciation. Factors in the measurement of
  depreciation Methods of computing depreciation: Straight Line method and diminishing balance method: disposal of the depreciable assets-change method.
• (c) Preparation of financial statements of a not-for-profit organization.
• Unit III : Accounting for Hire Purchase and Installment system
  Calculation for interest, partial and full repossession, hire purchase trading (total cash price basis), stock
  and debtor system. Concepts of operating and financial lease.
• Unit IV : Accounting for Inland Branches
  Concept of dependent branches, accounting aspects, debtor system, stock and debtor system, branch final
  accounts system and wholesale basis system, independent branches, concept-accounting treatment,
  important adjustment entries.
• Unit V : Accounting of Dissolution of Partnership Firm
  Accounting of dissolution of partnership firm including Insolvency of partners, sale to an Ltd. company

KOLHAN UNIVERSITY, CHAIBASA

• Unit-1 : Introduction
  Conceptual Framework: Accounting principle, Concepts, and Conventions, Introduction to Accounting
  Standards and Indian Accounting Standards (AS & Ind AS),
  The users of financial accounting information and their needs. Qualitative characteristics of accounting,
  information. Functions, advantages, and limitations of accounting. Branches of accounting. Bases of
  accounting; cash basis and accrual basis.
  Capital Expenditure (and Receipts), Revenue Expenditure (and Receipts), and Deferred Revenue
  Expenditure.
• Unit-2 : Accounting For Non-Profit Organizations
• Unit 3 : Depreciation Accounting and Inventory Valuation
  Depreciation: Meaning of Depreciation, Depletion, and amortization, Objective and Methods of depreciation
  (Straight line, Diminishing Balance), Change of Method, Accounting Standards AS-6 (ICAI),
  Inventory Valuation: Meaning, Significance of Inventory Valuation, Inventory Record System-Periodic
  and Perpetual, Methods of Inventory Valuation FIFO, LIFO and Weighted Average, Accounting Standard 2
  (ICAI).
• Unit 4 : Accounting for Inland Branches
  Concept of dependent branches; accounting aspects; stock and debtors system, branch final accounts
  system, and wholesale basis system. Independent branches: concept-accounting treatment: important
  adjustment entries.
• Unit 5 : Accounting for Royalty, Hire Purchase and Installment Payment Systems
• Unit 6 : Insolvency Accounts—Statement of Affairs and Deficiency Accounts
• Unit 7 : Accounting for Dissolution of the Partnership Firm
  Accounting of Dissolution of the Partnership Firm including Insolvency of partners, sale to a limited
  company and piecemeal distribution.

JAMSHEDPUR WOMEN’S COLLEGE, JAMSHEDPUR

• Unit-1 : Theoretical Frame work
• I. Accounting as an information system, the users of financial accounting information and their needs.
  Qualitative characteristics of accounting information. Functions, advantages, and limitations of accounting.
  Branches of accounting, Bases of accounting, cash basis, and accrual basis.
• II. The nature of financial accounting principles – Basic Concepts, and conventions: entity, money
  measurement, going concerned, cost realization, accruals, periodicity, consistency, prudence (conservatism),
  materiality and full disclosures.
• III. Financial Accounting Standards : Concept, benefits, the procedure for issuing Accounting Standards in India.
  Salient features of the First-Time Adoption of Indian Accounting Standard (Ind-AS) 101. International Financial
  Reporting (IFRS): –Need and procedures.
• Unit-2 : Accounting for Dissolution of Partnership Firm
  Including Insolvency of Partner, Sale to a Limited Company, and Piecemeal Distribution.
• Unit 3 : Accounting for Hire Purchase and Installment Systems
  Calculation of interest, partial and full repossession, Hire purchase trading (total cash price basis), stock
  and debtors system;
• Unit 4 : Accounting for Branches
  Accounting for Inland Branches
  Concept of dependent branches; accounting aspects; debtors system, stock and debtors system, branch
  final accounts system, and wholesale basis system. Independent branches.
• Unit 5 : Computerized Accounting System –Basic Concepts

Financial Accounting Book Contents

1.  Introduction to accounting
2. The Nature of Financial Accounting Principles
3. Accounting Standards in India (with IFRS)
4. Accounting for Non-Profit Organizations
5. Concept and accounting of Depreciation
6. Valuation of Inventories (AS-2)
7. Royalty accounting
8. Hire-Purchase System
9. Installment Payment System
10. Branch accounts (Accounting For Inland Branches)
11. Dissolution of Partnership Firm-1
12. Dissolution of Partnership Firm-2 (with including Insolvency of Partner)
13. Piecemeal Distribution
14. Sale of Partnership Business to a Limited Company 
15. Isolvency Accounts
16. Captial and Revenue Expenditure
17. Computerized Accounting
18. Bases and Process Of Accounting

• Short Answer Type and Objective Questions
• Examination Question Paper Of Various Universities