Financial Accounting

The present volume of the book has been thoroughly revised with more emphasis to reinforce the theoretical principles with actual practice and a new chapter on ‘Piecemeal Distribution’ has been added.

Salient Features of Financial Accounting Book:

• The book covers the whole course of Paper Code – 312 Financial Accounting prescribed by Vinoba Bhave University for B.Com (Hons.) Semester I.
• The most important feature of the book is that following Accounting Standards issued by The Institute of Chartered Accountants of India (ICAI), New Delhi have been incorporated in the book:

1. AS-1: Disclosure of Accounting Principles
2. AS-9: Revenue Recognition

Besides the latest position of the Accounting Standards and International Financial Reporting Standards (IFRS) has been included in the revised edition of the book.

• Chapter on Sale of Partnership Business to a Limited Company has been prepared on the basis of the Companies Act, 2013.
• In each chapter of the book final accounts have been closed on 31st March only and the final accounts pertaining to companies have been prepared in accordance with Schedule III of the Companies Act, 2013.

Financial Accounting Book Syllabus For Vinoba Bhave University Hazaribagh and Sido Kanhu Murmu University Dumka B.Com. (Hons.) Semester I

Unit 1. (a) Theoretical Framework

1. 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.
2. The nature of financial accounting principles-Basic concepts and conventions:entity, money measurement, going concern, cost realization, accruals,periodicity, consistency, prudence (conservatism), materiality and full disclosures.
3. Financial accounting standards : Concept, benefits, procedure for issuing accounting standards in India. Salient features of Accounting Standard (AS):1 (ICAI). International Financial Reporting Standards (IFRS):- Need and procedures.

(b) Accounting Process

To record business transactions-journal entries, Sub division of Journal, ledger accounts, Trial balance, Rectification of errors and Bank reconciliation statement.

Unit 2. (a) Business Income and Accounting of N.P.O.

1. Measurement of business income-Net income: the accounting period, the continuity doctrine and matching concept. Objectives of measurement.
2. Revenue recognition: salient features of Accounting Standard (AS): 9 (ICAI) Recognition of expenses.

(b) Self balancing ledger and sectional balancing system.

1. Capital and revenue expenditures and receipts : general introduction only.
2. Preparation of financial statements of non-corporate business entities.

Unit 3.

1. Accounting for hire purchase system including default in payment,
2. Instalment Payment System,
3. Royalty accounting excluding Sub lease.

Unit 4. 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.

Financial Accounting Book Contents 

1. Introduction to Accounting
2. Financial Accounting Principles (Basic Conventions and Concepts)
3. Financial Accounting Standards [wth International Financial Reporting Standards (IFRS)]
4. Journal: Rules of Debit and Credit
5. Subdivision of Journal: Cash Book
6. Subdivision of Journal: Subsidiary Books
7. Ledger (Including Rules of Posting)
8. Trial Balance
9. Capital and Revenue
10. Rectification of Errors
11. Financial Statements of Non corporate Entities (Manufacturing Account, Trading Account, Profit & Loss Account and Balance Sheet)
12. Hire purchase System
13. Instalment Payment System
14. Bank Reconciliation Statement
15. Dissolution of Partnership Firm- 1
16. Dissolution of Partnership Firm- 2 (with Insolvency of Partner)
17. Piecemeal Distribution
18. Sale of Partnership Business to a Limited Company (Revised on the Basis of the Companies Act, 2013)
19. Measurement of Business Income
20. Revenue Recognition: AS-9
21. Self Balancing System and Sectional Balancing System
22. Royalty Accounts
23. Accounting of Not-For-Profit Organisations
    ● Appendix: Objective Type Questions