Accountancy

A ccountancy
Teacher Text
XII
Government of Kerala
DEPARTMENT OF EDUCATION
State Council of Educational Research and Training (SCERT), Kerala
2015
Teacher Text Development Team
C.H. Arunkumar Anil Gomaz

KKMHSS, Vandithavalam, Palakkad MVHSSS, Peroor Kollam,
Biju Thankappan Narayanan.C. M
SNHSS, Nankicity, Kanjikuzhy, Idukki St. Mary’s HSS, Pariyapuram Post,
Malappuram
Thomas.P.V
Govt. HSS, Aralam, Kannur Vinod.V
karimpuzha HSS, Thottara,
Biju Mathew Palakkad
St. George HSS, Vazhathoppu, Idukki
Haridas.U
MNKM HSS, Chittilamchery, Palakkad
Experts
Dr.K.Anilkumar
Associate Professor & Head, Dept. of Commerce,
Govt. College for Women, Thiruvananthapuram
Dr.P.S. Devakumar
Asst. Professor , Dept. of Commerce,
Govt. College for Women, Thiruvananthapuram
Dr. Bino Joy
Asst. Professor & Head , Dept. of Commerce,
Govt. College, Manimala kunnu, Ernakulam
Academic Co-ordinator
Dr. S. Jayalekshmi
Research Officer, SCERT Kerala
Prepared by :
State Council of Educational Research and Training (SCERT)
Poojappura, Thiruvananthapuram 695012, Kerala
Website : www.scertkerala.gov.in e-mail : scertkerala@gmail.com
Phone : 0471 - 2341883, Fax : 0471 - 2341869
Typesetting and Layout : SCERT
© Department of Education, Government of Kerala
Foreword
Dear Teacher,
The teacher text on Accountancy has been developed based on
the Kerala School Curriculum 2013 and National Curriculum
Framework 2005.
As you all know, the process of transacting the curriculum is
challenging as it demands higher level of proficiency, dedication
and commitment on the part of the teacher who plays a pivotal
role in transacting the curriculum.
Our teachers are quite resourceful and can easily come up with
much more innovative ideas and strategies than the ones suggested
in this book.
The Teacher Text on Accountancy for the second year Higher
Secondary Course aims at familiarising the practising teachers
with the features of revised curriculum and the changed assessment
strategies to be adopted in the classroom to ensure learning in
every learner.
Suggestions for improvement are most welcome.
With regards,
Dr.S.Raveendran Nair
Director
SCERT, Kerala
Contents
Part - A
General Approach 5
Assessment Approach 24
Subject Approach 35
Syllabus 53
Learning Outcomes 61
Scheme of work 67
Part - B
I ACCOUNTING
1 Accounting for not-for-profit organisation 68
2. Accounting for Partnership-Basic concepts 75
3 Reconstitution of Partnership-Admission of a Partner 83
4. Reconstitution of Partnership-Retirement /
death of a Partner 93
5 Dissolution of Partnership firm 99
II ANALYSIS OF FINANCIAL STATEMENTS
1. Accounting for Share Capital 107
2. Issue and Redemption of Debentures 115
3. Financial Statement of Company 121
4 Analysis of Financial Statements 127
5 Accounting Ratios 133
6 Cash flow Statement 139
III COMPUTERISED ACCOUNTING
1. Overview of Computerised Accounting System 145
2. Spread sheet 151
3. Use of spread sheet in business applications 205
4 Graphs and charts for business 215
5. Accounting software Package - Tally 221
6. Data Base Management system 227
Details of practicals 234
Guidelines for Lab work & Sample Questionpaper
(Practicals) 254
Guidelines for Written Examination &
Sample Questionpaper 267
General Approach
Introduction
The National Curriculum Framework 2005 sowed the seeds for many
reforms in the field of education in India. Subsequently, NCERT
prepared textbooks for various subjects based on NCF 2005. Later
the, Kerala Curriculum Framework 2007 was formed and the
curriculum upto high school level was revised. The Right to
Education Act of 2009, Prof. P.O.J.Labba Committee Report related
to Higher Secondary Education and Dr. P.K.Abdul Aziz Committee
Report related to a comprehensive curriculum revision - all pointed
towards the necessity of curriculum reform.
In the 1990s, a new curriculum with comprehensive changes in
learning and pedagogy was introduced at the primary level. Based
on this activity-based, process-oriented and learner-centred
curriculum, Continuous and Comprehensive Evaluation (CCE) and
grading system were implemented. Subsequently, this method was
introduced at the Higher Secondary level too.
Significance of Curriculum Revision
Though activity-based pedagogy
has already been introduced at the The curriculum, syllabus and
higher secondary level, a textbooks being followed for more
comprehensive revision of than five years should be revised
and reformed urgently by SCERT.
curriculum has not been
implemented yet. The ongoing Prof.P.O.J.Labba Committee
syllabus revision interacts with As a knowledge society, it is of
contemporary events and takes paramount importance to basically
into consideration the nature of restructure and reform the
the learner. As a stepping stone to curriculum to face the challenges
posed by the times.
the higher education sector, the
higher secondary curriculum Dr. P.K.Abdul Aziz
should be raised to international Committee
Accountancy Teacher Text
standards. International standards do not refer to the standard of

education set by any particular country. On the other hand, it must
inculcate in the learner the ability to take his life forward wherever
he is, after the completion of his higher secondary education. It is
the sum-total of all the experiences and knowledge to be picked up
by the learner for meeting the needs. This emphasizes the need to
provide internationally accepted teaching-learning models to our
students. The curriculum revision has been envisaged as an attempt
in that direction.
RIGHT TO EDUCATION ACT - 2009
Section - 29 (Chapter 5)
Curriculum and evaluation procedure
(1) The curriculum and the evaluation procedure for elementary education
shall be laid down by an academic authority to be specified by the
appropriate Government, by notification.
(2) The academic authority, while laying down the curriculum and the evaluation
procedure under sub-section (1), shall take into consideration the following,
namely:
(a) conformity with the values enshrined in the Constitution;
(b) all round development of the child;
(c) building up child's knowledge, potentiality and talent;
(d) development of physical and mental abilities to the fullest extent;
(e) learning through activities, discovery and exploration in a child-friendly
and child-centred manner;
(f) medium of instruction shall, as far as practicable, be in child's mother
tongue;
(g) making the child free of fear, trauma and anxiety and helping the child
to express views freely;
(h) comprehensive and continuous evaluation of child's understanding of
knowledge and his or her ability to apply the same.
The curriculum should be revised ensuring the above-mentioned
factors, and the revision of the curriculum has to be viewed against
this backdrop.
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Higher Secondary - XII Teacher Text
Kerala School Curriculum (2013) - Chief characteristics

The curriculum
l is learner-centred, process-oriented, activity- based and value
oriented.
l gives stress to the learning outcomes that a learner imbibes at
the cognitive, social and emotional levels.
l lays stress on the skills to be attained by the learner in values
and attitude.
l is based on the philosophy of constructivism.
l gives teachers freedom to choose and employ logical and
varied learning strategies for the transaction of curriculum.
l is flexible to implement various teaching - learning strategies
recognizing the learning outcomes, nature of the content and
the different levels of the learners. Discovery learning, Concept
attainment model, Inductive method, Meta cognition, Co-
operative learning, Collaborative learning, Reflective learning,
and giving opportunities to individuals and group learning
etc. are taken into consideration.
l is comprehensive and takes into consideration the various
stages from the pre-primary level to the higher secondary level.
l designs innovative learning strategies as well as assessment
activities for children with special educational needs.
l ensures a Continuous and Comprehensive Evaluation (CCE)
focused on learning outcomes.
l stresses Health and Physical Education, Art Education and
Work Education.
l lays stress on Right-based Education in the light of Right to
Education Act, 2009.
l provides an opportunity to the learner to experience necessary
safety, care and security both at school and in the classroom
by raising the teacher to the level of a mentor.
l lays stress on the Code of Professional Ethics for school
teachers.
l helps to acquire new learning skills which enable the learner
to face contemporary challenges.
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l is intended to inculcate human values in the learners.

l ensures equity and equality among the learners.
l ensures the harmony of head, heart and hand and aims at a
comprehensive development envisioned to make learning
natural.
Curriculum Approach
Our curriculum has been developed, imbibing new thoughts in
educational psychology and philosophy. The idea of constructivism
put forth by NCF 2005 is the basis for the Kerala School Curriculum
2013 too. In constructivism, learning is the process of the construction
of knowledge.
The striking features of the curriculum transaction approach are:
i. Activity - based
ii. Process- related
iii. Ensure learning
iv. Focus to attain learning outcomes
v. Environment- friendly
vi. Highlights development areas
vii. Suitable for the nature of the learner
viii. Integrates learning and assessment
A learning process based on constructivism is the foundation of the
curriculum. A distinguishing feature of this approach is that
knowledge is constructed naturally by creating challenging learning
activities and considering the acquired knowledge and conceptual
background of the learner.
Learning Experiences
The acquired knowledge skills and interests differ from learners
coming from different backgrounds. So it is very important to
facilitate learning experiences imbibing these changes and
considering individual differences and multiple intelligences of
the learners.
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Learning Environment
The classroom should be designed to keeping in mind the interest
and development of the learner so as to ensure his/her participation
in various learning activities. Every activity should be learner-
oriented. A conducive environment should be created. The freedom
to employ suitable learning strategies which are learner-centred and
activity-based, taking into consideration the development and
growth in the learning ambience rests with the teacher.
Learning Process
l Each learner constructs knowledge by linking it with his/her
previous experiences.
l Knowledge construction occurs at the level of the individual
through meaningful societal interventions.
l Learning is made effective through multi-sensory experiences
which consider various learning styles, learning pace etc.
l Learning becomes more effective through co-operative learning
in an environment conducive for co-operation.
l Learning materials should be meaningful generating interest
in the learner.
l Spiralling of learning experiences will make learning more
effective.
l By ensuring flexibility of learning activities and possibilities
of adaptation, learners requiring special educational needs and
with different aptitudes may be attended to.
l Each learner should get learning experiences necessary to
ensure learning outcomes.
l Learning and Assessment should be complementary.
l Everybody can attain learning outcomes by adopting suitable
teaching- learning strategies that consider content and learning
requirements of the learner.
l The learning process should be decided keeping in view the
comprehensive development of each learner.
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Learning Outcomes
As per the rules of the RTE Act, the idea of learning outcomes was
introduced in the Kerala School Curriculum 2013. Knowledge of
learning outcomes is essential to plan the teaching-learning process
and evaluation, in a precise and practical manner. Learning outcomes
are the aims to be achieved by the learner during the various stages
of school education. Precise and accurate statements based on the
knowledge, skills, attitudes, values etc. to be acquired by a learner
in a particular subject-area are called Learning Outcomes.
The learning outcomes should be stated based on performance that
can be observed and measured. An analysis of the learning outcomes
will help assess the knowledge, skills, values and attitudes that
should be acquired by the learner at the end of each unit, class and
stage have been acquired or not. Precise and clear assessment
activities can be planned, based on specific learning outcomes.
Information and Communication Technology
Today information and communication technology has an important
role in the construction and dissemination of knowledge. This is
made possible through gathering of information, analysis and varied
presentations. The immense possibilities of ICT can be used to
transact any subject at the higher secondary level. Through this, it
can also be ensured that learners acquire ICT skills. The main features
of ICT are stated below.
Art Education
Arts evolved as a part of providing enjoyable experiences in the
progress of man as a social animal.
The experiences gathered during various phases of life touch human
minds aesthetically. All the art forms that evolved from ancient times
were visual and auditory. It had the power of rejuvenating the
human mind. This is the unique characteristic of art.
Art education at the higher secondary level aims to develop the
creative skills acquired by the learner and to create in him a broader
outlook about art and literature. Also an aptitude for higher studies
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and research in the field of arts has to be developed in them. In

order to develop observation skill, ability to appreciate and sense
of imitation among learners, art education is essential. It also helps
learners to develop abilities to think and respond differently, to
ensure social intervention and to make learning more productive.
Activities in art help to make children work hard and diligently,
and also channelize their enthusiasm in the right direction.
Health - Physical Education
The term health refers to the complete state of physical, mental,
emotional and spiritual well-being. Therefore health is essential for
the existence of an individual. So proper implementation of health
and physical education is essential. The minimum physical fitness
required for every individual in the society in order to exist should
be ensured. For this, health and physical education should be
imparted scientifically and comprehensively from a very early age.
The views of National Curriculum Framework 2005 regarding need
based and integrated approach should be given special attention
and emphasis.
Along with the knowledge of content areas, performance excellence
and physical fitness are also to be assessed. The health-physical
education envisioned in Kerala School Curriculum 2013 and initiated
at the primary level, gets perfected at the higher secondary level
only. Learning activities should be planned so as to enable learners
excel in this field to explore up to the level of international
possibilities. The physical fitness, training excellence and knowledge
of content areas acquired hitherto promote holistic well-being.
Objectives of Health - Physical Education
l To get an awareness about sports, values and ethics.
l To gain expertise in athletic skills and to scientifically analyse
them.
l To gain expertise in major games.
l To get practical training in self defence techniques.
l To understand aggression, balanced or controlled aggression
etc.
l To realise the consequences of the use of drugs.
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l To create the right understanding about sexual health.

l To acquire scientific practical ability to intervene effectively
during life rescue missions.
l To get an awareness about the changes in the respiratory and
cardio-vascular system that can be brought through exercise.
l To give training using safe and effective exercise pattern.
Work Education
The confluence of knowledge acquired through hearing, sight and
work makes construction of knowledge possible in a learner.
Contemporary learning process evolves through enquiry and
experiences. Work education is essential to integrate and develop
emotional and cognitive domains.
A work education integrated with the subjects of higher secondary
curriculum, will be more appropriate.
Objectives of Work Education
l Readiness to work
l Development of values and attitudes
l Development of a balanced personality
l Self-sufficiency in the field of production
l Human skill development
l National development
Inclusive Education
In the classroom, an atmosphere that is congenial to all learners
without excluding any one must be created. In our schools there are
two categories of students, one who requires more consideration,
help and attention and the other who requires normal help and
attention. Only by addressing this can we ensure equitable quality
education.
Areas which help to develop values, attitudes and
commitments
Areas such as awareness of humanitarian and constitutional values,
attitudes that strengthen social life and growing social commitment
are the prime concerns of the curriculum. Details of the conceptual
areas are given below.
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Democratic Outlook
While choosing the content for different subjects, the perspectives
on democracy have to be considered. In the planning and transaction
of learning activities, there should be a democratic approach. The
aim of the curriculum is to establish a democratic approach through
democratic platforms.
Constitutional Values
The values and objectives that are upheld by our Constitution have
to be reflected in the curriculum. The content and the transaction
process should be selected to enable learners acquire constitutional
values.
Secular Attitude
Subject areas which help in developing a secular attitude have to be
included.
Tolerance
The curriculum should aim at developing the quality of tolerance
towards those who disagree with you.
Constructive and Creative Thinking
There is a need to develop creative thinking and the urge for
discovery among learners. There should be possibilities for creative
enquiry in the content areas and learning strategies of the
curriculum. The different levels of multiple intelligences should
also be considered.
Respect for one's cultural heritage
Respectful attitude to one's cultural heritage and history is one of
the aims envisioned by the curriculum.
Equality
It is essential to ensure equality in learning activities, which are
provided to the learners.
Leadership Quality
There is need to design learning strategies that would help in
shaping leaders who are capable of facing the challenges of this
millennium. In the classroom, opportunities must be created to
develop leadership qualities among children.
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Life Skill Education

Life skills such as self awareness, empathy, communication skill,
interpersonal relationship, creative thinking, critical thinking,
decision-making, problem-solving, coping with emotions and coping
with stress should be developed in learners. These life skills help
the learner to face life with self-confidence.
Civic Sense
Just as the state has certain duties to the citizens, the citizens also
have some duties to the state. The aim of education is to create a
community with civic sense and a sense of responsibility and
discipline.
Respect for Elders
Respect for elders is the keystone of our civilization. In all cultures,
old people are venerated and given due consideration. An important
characteristic of the elder people is that they are a store house of
experiences. Our cultural life being continuous and heritage-
oriented, the age-old experiences and knowledge are handed down
from one generation to another. Factors which encourage learners
to express respect for elders through co-operative interventions
should be made part of the transaction of content.
Human Rights
Human rights are the rights of individuals to lead a life of dignity.
The human rights which got universal acceptance through the United
Nations Declaration of Human Rights should be given importance
in the curriculum.
Child Rights
It is our duty to protect every right of the child.
Awareness about Environment
Basic awareness about nature and the need to protect natural
resources should be included from the primary level itself. Children
should be made to understand that environmental hygiene is as
important as personal hygiene and that sense of hygiene is one of
the basic factors of civic sense. They should understand that nature
and natural resources are not meant just for the consumption of
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human beings and that any change in the balance of nature will have
far- reaching consequences. They should carry out activities which
make protection of natural resources and environmental hygiene a
value-system and an attitude.
Water Literacy
Children must be made to understand that water is precious by
creating awareness about the availability of water, conservation of
water and the need to keep it free from pollution.
Peace Education
The basic idea of peace education is to develop values and attitudes
to interact with others and the surroundings in a peaceful and
friendly manner. It is essential to include content areas that reflect
values like avoiding conflicts and situations leading to conflicts,
peace and harmony.
Legal Literacy
Knowledge and awareness about law is essential for all citizens of a
democratic country. It is the need of the hour to include content
areas that ensure legal literacy. Various programmes involving Law
Clubs, Law Clinics etc. can be organized to create awareness of law.
Cyber Literacy
The misuse of ICT and related crimes are on the rise. Awareness
should be created among children on these activities. They should
be given a clear idea about the proper use of Internet, e-mail and
social networking sites. The curriculum should facilitate creating
awareness among children regarding the punishment for cyber
crimes and the ethics in the use of internet etc.
Media Literacy
Media exerts a great influence on our society. It is impossible even
to imagine a day without visual media. Visual media has
tremendous influence on children. Therefore, the content area of the
curriculum should contain various factors required to create critical
media literacy.
Perspective on Sustainable Development
The curriculum should spread the awareness that this earth exists
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not just for the benefit of mankind. An understanding regarding

the environmental challenges, human interventions which cause
harm to environment, and how nature can be protected from such
destructive activities etc. is the need of the hour. The curriculum
should also uphold the enquiry how environment and development
can go hand in hand and perspectives regarding sustainable
development and views. One of the aims of the curriculum is to
present perspectives on consistent development and create a
comprehensive awareness about environment.
Adolescent Education
The possibility of including content areas on adolescent education
should be explored with the help of child psychologists, health
workers, doctors and teachers. It is also important to address the
doubts of learners regarding health and hygiene in a scientific
manner.
Consumer Culture
Facts concerning the negative aspects of consumerism have to be
included in the curriculum. Consumer laws and our rights as
consumers should delt with in the curriculum.
Anti-drug and intoxicant attitude
We should realise the harmful effect of alcohol, drugs, tobacco and
other narcotics on the health of children. The future generation
should be saved from the evil tentacles of this menace. Pictures,
pamphlets and visuals on the physical and mental effects of drug
abuse, as examples, can be included in the content areas.
Gender Justice
The curriculum should ensure gender justice and gender equality.
Discrimination on the basis of gender should not be reflected in the
content areas. It is the responsibility of teachers to ensure gender
justice while carrying out learning activities.
Frugality
Children should be taught the basic lessons of frugality at the primary
level itself. Explain the importance and relevance of the habit of
frugality. Students can also be given practical training in frugality.
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Road Safety
Traffic rules and practical suggestions to avoid road accidents are
part of road safety. Children should develop the civic awareness
that the road is a public place and that everybody has the right to
use it. Activities related to road safety should also be given
importance.
Learning experiences in these areas should be incorporated naturally
in the transaction of the curriculum. While choosing the concepts of
various subjects and arranging learning activities, enough
consideration should be given. Knowledge, skill and attitude should
be stressed in the process of teaching learning process. It should
also be possible to perform continuous evaluation to find out
whether the objectives have been accomplished. Activities of
various clubs, SPC, NCC, Scouts and Guides, JRC, Vidya Rangam,
Kalasahithya Vedi, Gandhi Darshan etc., can be platforms to develop
values, attitudes and commitment.
Right Based Education
UNESCO had taken initiatives to decide on the rights of children
and spread them world wide. As a result of this, legislation has been
made in many countries to protect the rights of children. The Right
to Education Act passed in 2009 in India, is an important milestone
in this matter. The responsibility of protecting the rights of children
becomes the duty of adults. Right to Education can be divided into
three areas.
l Participation
l Provision
l Protection
Participation
l My opinion is sought when decisions concerning me/ children
are taken.
l My interests are given priority when decisions are taken.
l I am given the opportunity to participate in activities which
are compatible with my ability and limitations.
l I am able to go through a learning process which is flexible
enough to nurture my abilities and overcome my limitations.
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l My opinions are given due respect and value.

l My friends and I get active participation in the activities in
class.
l I get opportunities to display my talent and abilities.
Provision
l I get the service of teachers who have the required qualification
and who constantly update their knowledge.
l I get learning -experience in the prescribed time.
l I get a classroom ambience conducive to physical and
psychological growth.
l My teachers are able to make learning materials required for
learning activities available.
l I get materials and opportunities for the growth of art and
physical education.
l I also get career guidance for securing employment in future.
Protection
l I do not experience any kind of discrimination in or out of
school.
l I am not ignored by any one in any manner.
l I am not harassed either physically or mentally.
l I can interact with my teachers without any fear.
l Though I am a child, every one respects and values my privacy.
l I am convinced that I will be safe both at home and at school.
l My school lends me a helping hand to further strengthen and
empower me when I face physical and emotional problems.
If these are the rights of children, how far can I ensure these rights?
What steps should I take further to ensure these rights? Every teacher
should think about this.
Mentoring
RTE considers the teacher as a 'mentor'. Mentoring has much
relevance and significance in the comprehensive school development
project.
The teacher - student relationship has undergone significant changes.
A teacher should function not as a person who distributes/ dispenses
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knowledge, but as a facilitator who co-ordinates the various

opportunities of students to gain knowledge.
In reality, school is a second home for the child and teachers are the
members of his/her family. A teacher should understand that all
children do not receive love, consideration, security, appreciation
and recognition etc., equally at home. The responsibility of a teacher
becomes complete only when he/she realises this and is able to
express these feelings accordingly to each child. Only then will a
school become a home.
Only when a teacher becomes a mentor and a facilitator who helps
gain learning outcomes, he/she will be a teacher of the new era.
When the teacher becomes a co-guardian, children get guidance,
advice, support and opportunity to improve. The teacher as mentor
should make interventions in the role of an experienced predecessor.
Assistance for awareness and counselling are part of this. An effective
mentor can bring out the hidden talents of a child.
Through mentoring:
l the teacher and the student enjoy proper learning experiences.
l the knowledge-area of the child and the teacher widens.
l the bond between the student and the school is strengthened.
l personality development and learning development of the
child are ensured.
l collective thinking, decision- making and collective effort are
made possible.
l the relationship between parents and school is strengthened
and an overall view of the learner's learning process is created.
l the participation of the learner in arts and sports can be
assessed.
Mentoring has to be manifested as a process which caters to
personality development and interest in learning. It should also help
in continuous assessment. Notes related to mentoring experiences
should be recorded in the Cumulative Record. All the teachers in
the school should act as mentors of students. All learners should
get an experience of mentoring. The class may be divided into small
groups and different teachers can be given the responsibility of
evaluating the progress of each group.
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Code of Professional Ethics for School Teachers

1. Responsibility towards Students
The teacher;
1.1 Treats all students with love and affection.
1.2 Respects the value of being just and impartial to all students irrespective
of their caste, creed, religion, sex, economic status, disability, language
and place of birth.
1.3 Facilitates students' physical, social, intellectual, emotional, and moral
development.
1.4 Respects basic human dignity of the child in all aspects of school life.
1.5 Makes planned and systematic efforts to facilitate the child to actualise
his/her potential and talent.
1.6 Transacts the curriculum in conformity with the values enshrined in
the Constitution of India.
1.7 Adapts his/her teaching to the individual needs of students.
1.8 Maintains the confidentiality of the information concerning students
and dispenses such information only to those who are legitimately
entitled to it.
1.9 A teacher refrains from subjecting any child to trauma, fear, anxiety,
physical punishment, sexual abuse and emotional and mental
harassment.
1.10. Protects a child from all forms of sexual abuse.
2. Obligations towards parents, community and society
A teacher;
2.1 Establishes a relationship of trust with parents/guardians in the interest
of the all round development of students.
2.2 Desists from doing anything which is derogatory to the respect of the
child or his/her parents /guardians.
2.3 Strives to develop respect for the composite culture of India among
students.
2.4 Keeps the country top most in mind, refrains from taking part in such
activities as spreading feelings of hatred or enmity among different
communities, religious or linguistic groups.
3. Obligations towards the profession of teaching and towards
colleagues:
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A teacher:
3.1 Strives for continuous professional development.
3.2 Creates a culture that encourages purposeful collaboration and dialogue
among colleagues and stake holders.
3.3 Takes pride in the teaching profession and treats other members of the
profession with respect and dignity
3.4 Refrains from engaging himself/herself in private tuition or private
teaching activity.
3.5 Refrains from accepting any gift, or favour that might impair or appear
to influence professional decisions or actions.
3.6 Refrains from making unsubstantiated allegations against colleagues
or higher authorities.
3.7 Avoids making derogatory comments about colleagues, especially in
the presence of pupils, parents or colleagues.
3.8 Respects the professional standing and opinions of his/her colleagues
3.9 A teacher maintains confidentiality of information regarding colleagues
and dispenses such information only when authorized to do so.
Teacher Planner
Teacher planner is a record of daily teaching planning. The teacher
should develop the process page by carrying out the activities given
in the teacher text and text book with the aim of achieving learning
outcomes. However, these activities should be done in a flexible
manner, adopting techniques suitable for the students of her class.
The process page should contain planning that includes assessment
along with learning activities. Information obtained through
continuous assessment should also be included on the feedback
page.
A teacher planner should contain learning activities conducive for
precise and meaningful concept- formation. The teacher should
prepare a reflection note based on the information gathered through
learning activities and assessment implemented in a week. It should
be discussed in SRG/ Subject Council. Further planning notes
should be made by the teacher based on these notes.
The format of a teacher planner is given below.
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Teacher Planner
Name of the unit/ lesson :
Date :
Expected time :
Learning outcomes :
Concepts / Ideas :
Skills :
Language elements
(only for language ) :
Discourses
(only for language ) :
Values, Attitudes :
Learning aids :
Expected Products :
Process Page Assessment Page

Process containing activities Assessment details should be
and assessment. included here.
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Reflections
My findings, realisations
(Based on the ideas obtained through the assessment of learning
activities)
l
Extended Activities and Remedial Measures - Hints

l
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Assessment Approach
Learning is a natural and continuous process. For effective learning,
learning experiences should be based on specific objectives and
centred on learning outcomes. Teachers and learners should be
aware of the concepts and skills to be acquired through learning.
Learning strategies should be planned according to the learning
outcomes associated with each lesson. They should be linked to
real life situations and presented to the learners.
How far are the acquired concepts and skills sufficient in ensuring
learning outcomes? How many learners are yet to acquire the
learning outcomes? What are the extended activities to be provided?
How can they be provided? These should be the concerns of teachers
as part of assessment.
Assessment of Learning is the process of assessing the learning
outcomes acquired after the transaction of a unit. The proficiency of
the learner and his level of excellence are evaluated here. This is
just one phase of assessment.
There is also a process of correction which involves a critical self
analysis of the concepts and awareness gathered through learning
and internalizing the changes. This can be considered as self-
assessment. Thus, learning takes place through self-assessment. This
can be called Assessment as Learning. The learner becomes aware
of how to learn more effectively (Learning to Learn) through this.
Assessment for learning and assessment as learning should be
intensely emphasised to make learning more effective. The approach
which gives importance to assessment process for making learning
more effective must be adopted.
Continuous and Comprehensive Evaluation (CCE)
Learning is a continuous process taking place in the learner. Hence,
the assessment process to examine the concepts and skills acquired
should also be continuous. By comprehensive assessment, we mean
the assessment of the learner in cognitive as well as socio-emotional
areas. Hence, we have adopted a continuous and comprehensive
evaluation system.
24
CCE Areas
CCE is carried out in two areas;
1. Cognitive area
2. Socio - emotional area
Assessment regarding development in cognitive domain
The subjects taught at higher secondary level like Language, Science
Humanities, Commerce, Health and Physical Education come under
cognitive area. Learning outcomes acquired in each subject should
be evaluated. Two types of evaluation are suggested here.
1. Continuous Evaluation (CE)
2. Term Evaluation (TE)
Continuous Evaluation (CE)
Three types of CE are suggested.
1. Learning Process assessment
2. Portfolio Assessment
3. Unit based assessment
1. Learning Process Assessment
Both the teacher and the learner plan various activities to acquire
learning outcomes. The teacher has evaluated various factors like
the participation of the learner in the learning process, excellence of
the learner in performance and presentation, creativity of the learner,
acquisition of desired skills etc. The indicators given below can be
used for evaluation.
1. Participation in activity
2. Conceptual understanding
3. Acquisition of skills
4. Performance / Presentation
5. Recording / Preparation
When the process -assessment is carried out, the assessment done
should be based on each indicator. For example, when evaluation
for the indicator 'participation in activity' is done, the learners should
be categorized as excellent, good, average and those who need
improvement. This has to be recorded in the page for assessment in
25
Teacher Planner. All learners have to be assessed and recorded with

reference to each indicator in every term.
Opportunity for self-assessment, peer assessment and teacher-
assessment should be given in process-assessment.
Activity log
Activity log is an important document required for the assessment
of the cognitive area. It helps to complete various activities according
to learning processes. The creativity of the learner, thought
processes, language skills, socio- emotional domain etc are reflected
in the activity log. An activity log should contain details like the
various strategies adopted for the transaction of lesson. The
additional information given by teachers to strengthen the learning
process too can be recorded in the activity log.
2. Portfolio Assessment
Portfolio is the collection of all products formed during the various
stages of learning activities. It has the duty to give a learner, parents
and the teacher feedback regarding learning.
The following should be included in a portfolio.
o Activity log
o Other learning documents, pictures, collections, writings,
learning materials, creations made through ICT etc.
o Creative works
o Work sheets
The following indicators can be used for portfolio assessment.
o Clarity of concept
o Attainment of concepts
o Appropriate design
o Completion
o Originality
Method to calculate scores of learning process and portfolio
It is not necessary to record the score of all students calculated using
indicators given for each activity. Performance of an entire term
should be evaluated using the indicators. The notes in teacher
planner, records in activity log etc should be consolidated at the
26
end of each term and learners should be categorised on the basis of

their participation as Excellent, Good, Average, and Need
improvement and 4/3/2/1 scores should be given accordingly. All
five indicators have to be considered and score should be given for
each indicator. The maximum score can be calculated as 20.
3. Unit based Assessment
In a unit, activities for various learning outcomes are distributed in
an inter-related manner. This is comprehensive in nature. While
assessing a unit, this comprehensiveness (considering all the
learning outcomes) is assessed. Oral assessment, quiz programme,
open book assessment, preparation of questions, identifying the
indicators and assessment of creative writing can be considered for
unit assessment. Rating scale and check list to measure the
achievement of a learner in a particular unit can be used. Unit
assessment should take place naturally along with learning.
For unit assessment, points have to be awarded on the basis of
indicators and converted to grades. These grades have to be recorded
in the prescribed format. As there is more than one assessment in a
term, the average of the assessment of all the units has to be recorded
at the end of the term. Teacher has to prepare indicators suitable for
the tools used in assessment.
Open Book Assessment
An “open book assessment” is one in which examinees are allowed
to consult their class notes, textbooks, and other approved materials
while answering questions. It is ideally suited to programmes that
especially aim at developing the skills of critical and creative
thinking. The open material may take one of the main forms; a
textbook or alternative reference materials, or the students’ own
notes. The types of material allowable must be made explicit to all
students in advance of the assessment. Open-book assessments often
comprise tasks based on a problem or argument to which the student
is then required to respond, employing their knowledge of the
subject and making use of the reference material as appropriate.
Unit based assessment can be done in the form of open book
assessment. It can be given after completing the unit, integrating all
the learning outcomes. This assessment can be given for individual
attempt first. Then the same can be allowed to be discussed in
groups. Thus learning can be ensured in every learner.
27
Advantages of open-book Assessment

l They assess not only students’ capacity to construct a coherent
response to the assessment task, but also require a
demonstration of their ability to use resource material
effectively.
l By allowing students access to relevant reference material,
open-book assessments reduce the need to memorise
information, and can therefore allow students to concentrate
on demonstrating their ability to understand and apply this
information to the question.
l By providing students with reference material prior to the
assessment, it may give them greater confidence when taking
these assessments and therefore produce a more accurate
account of their achievements.
l Students can use revision time more constructively, focusing
on reinforcing their understanding of the subject rather than
attempting to memorise information.
l Home assignments and other learning experiences already
prepare the students to solve problems with the assistance of
external resources, so open-book assessments are quite natural
in nature.
Preparing for an Open Book Assessment
l Read the chapters ahead of time. Don’t expect to find quick
answers during the assessment.
l Know where to find everything. Observe the concepts and make
your own outline. This reinforces the structure of the content
in your mind.
l Mark all important terms with sticky notes and flags. If the
teacher allows it, mark your texts wherever you notice
important concepts and terms.
l Review notes for themes. Your teacher’s comments usually
provide an overview of the themes and concepts that appear
on assessment. You won’t always get this by reviewing the
book alone.
l Make your own notes if allowed, and write down important
formulas or concepts that you’ve covered in class.
28
Method of calculating CE
The maximum score for learning process, portfolio and unit based
assessment will be 20 each in every subject. Term level recording
can be done calculating the average of them. To consolidate these
marks, the format given in Annexure - 1 can be used.
Term Evaluation (TE)
It is essential to assess the learning outcomes achieved through
learning activities by each learner at the end of every term. The
assessment of languages should be made considering areas like
discourses, language elements, language skills based on the learning
outcomes in the units considered in each term. Question models
can contain various questions which stress the content areas and
skills. For other subjects, assessment should be done based on the
content- area of units considered in the term. Questions to assess
skills and ideas which lay stress on learning outcomes can be
prepared.
The question paper should be prepared after first preparing a design
and then a blue print of question paper giving proper weights to
units and learning outcomes, various thinking skills and different
form of questions. Suitable scoring key and marking scheme should
be prepared for each question and assessment should be done based
on this scheme. Question-wise analysis should be prepared to
review whether the questions are in accordance with the blue print
and necessary editing should be done in the questions.
Details of thinking skills
Thinking skills are the mental processes that we apply when we
seek to make sense of experiences. While setting the question paper,
due weight should be given to the thinking skills, so as to ensure
meaningful learning in every learner. Coverage of the range of skills
has to be ensured in the question paper which expects the learners
to respond within a stipulated period of time of assessment, keeping
in view the difficulty level.
According to Anderson and Krathwohl (‘A Taxonomy for Learning,
Teaching and Assessing – Revised Blooms taxonomy’) the range of
categories, specific thinking skills/processes with its alternative
processes/terms is given as follows;
29
CATEGORY/ ALTERNATIVE TERMS

PROCESSES
1. Remember Retrieve relevant knowledge from long-term
memory
1.1. Recognising identifying- (e.g. Recognize the dates of important
events in Indian history)
1.2. Recalling retrieving - (e.g. Recall the major exports of India)
2. Understand Construct meaning from instructional messages,
including oral, written and graphic information
2.1. Interpreting clarifying, paraphrasing, representing, translating (e.g.
Write an equation [using B for the number of boys
and G for the number of girls] that corresponds to
the statement ‘There are twice as many boys as girls
in this class’)
2.2. Exemplifying illustrating, substantiating (e.g. Locate an inorganic
compound and tell why it is inorganic)
2.3. Classifying categorizing, subsuming (e.g. Classify the given
transactions to be recorded in Purchase returns book
and Sales returns book)
2.4. Summarising abstracting, generalizing (e.g. Students are asked to
read an untitled passage and then write an appropriate
title.)
2.5. Inferring concluding, extrapolating, interpolating, predicting
(e.g. a student may be given three physics problems,
two involving one principle and another involving a
different principle can be asked to state the underlying
principle or concept the student is uses to arrive at
the correct answer.)
2.6. Comparing contrasting, mapping, matching (e.g. Compare
historical events to contemporary situations)
2.7. Explaining constructing models (e.g. the students who have
studied Ohm’s law are asked to explain what happens
to the rate of the current when a second battery is
added to a circuit.)
3. Apply Carry out or use a procedure in a given situation
3.1. Executing Carrying out (e.g. Prepare Trading and Profit and loss
Account from the Trial Balance given to and find
out the net profit.)
30
3.2. Implementing using (e.g. Select the appropriate given situation

where Newton’s Second Law can be used)
4. Analyse Break material into its constituent parts and
determin how the parts relate to one another and
to an overall structure or purpose
4.1. Differentiating discriminating, distinguishing, focusing, selecting (e.g.
distinguish between relevant and irrelevant numbers
in a mathematical word problem)
4.2. Organising finding coherence, integrating, outlining, parsing,
structuring (e.g. the students are asked to write
graphic hierarchies which best corresponds to the
organisation of a presented passage.)
4.3. Attributing deconstructing (e.g. determine the point of view of
the author of an essay in terms of his or her ethical
perspective)
5. Evaluate Make judgements based on criteria and
standards
5.1. Checking coordinating, detecting, monitoring, testing (e.g. after
reading a report of a chemistry experiment, determine
whether or not the conclusion follows from the results
of the experiment.)
5.2. Critiquing judging (e.g. Judge which of the two methods is the
best way to solve a given problem)
6. Create Put elements together to form a coherent or
functional whole; reorganize elements into a new
pattern or structure
6.1. Generating hypothesizing (e.g. suggest as many ways as you can
to assure that everyone has adequate medical
insurance)
6.2. Planning designing (e.g. design social intervention programmes
for overcoming excessive consumerism)
6.3. Producing constructing (e.g. the students are asked to write a
short story based on some specifications)
Health - Physical Education - Assessment Method
Health - physical education will be considered as a cognitive area
from 2014-15 academic year. During the adolescent stage, the
physical and mental development of a child strengthens further. The
31
learners should be given the opportunity to get a proper awareness

of health habits and the need to engage in physical activities. A
performance assessment of the health - physical education is
suggested. Details regarding this are given in the higher secondary
level source book.
Assessment in Socio - Emotional Area
Assessment of social and emotional areas is as important as that of
cognitive areas. Skills relating to Learning to know, Learning to do,
Learning to live together and Learning to be should be considered
here. The assessment of social and emotional areas should consider
the following skills.
1. Communication skills
2. Interpersonal skills
3. Empathy
4. Coping with emotions
5. Coping with stress
6. Problem solving skills
7. Decision making
8. Critical thinking
9. Creative thinking skills
10. Self- awareness
The assessment should be carried out by teachers handling various
subjects in cognitive areas. This assessment should be carried out
as part of the learning process assessment in each subject. Along
with the assessment of process skills, the assessment of related values
and attitudes too should be done.
The skills in the socio - emotional area that can be beneficial for the
proficiency of the learner should be identified and marked. The skills
beneficial to each learner should be encouraged. The teacher can
record these proficiencies in the Teacher Planner and the
consolidated information in Annexure - 2.
Artistic, Social, Cultural and Vocational Proficiencies
To ensure the all-round development of a learner at the higher
secondary level, not only appreciative, creative and artistic skills
should be encouraged but an attitude towards undertaking social-
cultural services should be inculcated. Every learner should get an
32
opportunity at least once in a month to participate in such activities.

Higher Secondary Youth Festival, Career Guidance, Social Extension
activities, National Service Scheme, N.C.C and various clubs should
be made use of towards this effect.
All students at the higher secondary level should participate in
atleast one of these activities. The proficiency of the learner in
participating can be given a special grade certificate.
For Excellence in activity - A grade
Good - B grade
Satisfactory - C grade
Participation - D grade
Assessment - Annual Consolidation
The annual overall score of CE is the best score obtained by the
learner in 3 terms. This can be entered in the column titled 'Final
Score' in the format given in Annexure - 2. It is the total CE score of
the learner in each subject. Now find the TE of each subject and find
the total score adding CE and TE. This is the total score of a learner
in one subject. In the case of subjects with practicals, the final score
is calculated by including the score for practicals too.
Grading Scheme
Higher Secondary level employs grading system to assess subjects
in cognitive area. 9 Point Absolute Grading is used for this.
The table given below can be used for this.
Score Percentage Grade
90-100 A+
80-89 A
70-79 B+
60-69 B
50-59 C+
40-49 C
30-39 D+
20-29 D
Below 20 E
To be eligible for higher studies, the learner in the higher secondary
should get a minimum of D+ (30-39 %) for each subject in the
combined score of CE +TE (Public exam). In addition, he should
score a minimum of D+ for TE too.
33
The formats for assessment are given as Annexure I and II.
Assessment
Approach: An approach that focuses learning outcomes
CCE
Cognitive Area Socio - Emotional Area
1 Communication skills
Continuous Assessment Term Assessment 2 Interpersonal skills
3 Empathy
Theory Practical
4 Coping with emotions
$ Assessment of $ Lays stress on 5 Coping with Stress
learning process. ideas, processes
6 Problem solving skills
$ Assessment of and learning
outcomes. 7 Decision making
Portfolio.
8 Critical thinking
$ Assessment at Unit
level. 9 Creative thinking skills
10 Self-awareness
34
Subject Approach
Education at higher secondary level assumes greater significance,
after ten years of general education, as this is the first time a student
takes the path of specification. A student has to exercise prudence
while choosing an alternative from various options available to him.
One's own needs, Interests, capabilities, aptitude and challenges they
have to face in future has to be kept in mind while arriving at a
decision in this stage.
National Curriculum Framework 2005 (NCF 2005) and Kerala School
Curriculum 2013 (KSC 2013) envisages a multifarious approach to
address all the challenges faced by the student community, in its
curriculum revisions. Considering the above, NCF 2005 has put forth
some guiding principles for curriculum development.
• Connecting knowledge to life outside the school
• Shifting of learning from rote methods
• Enriching the curriculum to provide for overall develop-
ment of children rather than text book centric.
Commerce Education
The role of education is changing very rapidly due to changes in
society. Education is in great demand and technology is changing
and so is curriculum. The subject of commerce is skill oriented and
life centric in nature. The use of ICT and internet in particular has
opened new vistas for making education process effective. Com-
merce curriculum is more relevant because business provides maxi-
mum employment opportunities; hence maximum exposure and
emphasis must be given for skill acquisition in students.
It is commonly agreed that education should aim at the holistic de-
velopment of the individual. Both NCF 2005 and KSC 2013 acknowl-
edge the above and insist that such development should be in har-
mony with the society and nature. Commerce education at higher
secondary stage is not merely to satisfy the skills or vocational needs
35
of pupil but provides a basic understanding of the various princi-

ples, procedures and practices related to business. It also fosters an
understanding of the economy of the country in which activities re-
lated to business and industry takes place. Commerce should be
taken as both a knowledge subject and a skill subject.
Objectives of Commerce Education
• To develop skills such as conceptual skills, technical skills
and practical skills in the field of industry, commerce, man-
agement and accounting.
• To prepare a student for a career in business or to start a
business enterprise of his/her own.
• To give each student enough opportunities to acquire rel-
evant knowledge about business and economy.
• To familiarise students with current business processes and
practices.
• To familiarise students with the behavior of markets, prod-
ucts as well as finance.
• To develop skills in the use of information technology for
business.
• To develop capability in each student to identify business
opportunities, analyze their risk-return possibilities and sup-
port business development in socially desirable avenues with
strong moral commitment
• To develop in students a business attitude and skills to be
precise and articulate, considering its ethical side.
Objectives of Commerce Education
Following are the special features to be considered while transact-
ing commerce curriculum.
1. Linkage with Industry
In order to have experience to the world of work, the learners shall
have to have an interaction with outside organizations, agencies and
36
community at large. The learning activities have to be organized in

such a way by establishing linkage with the industry.
As you know accounting is one of the core subjects in commerce.
Business firms all over the world would need great deal of reliable
and timely information to compete in the market and accounting
plays an important role in this prevailing competitive global struc-
ture of the economy. Every forms of business organization use ac-
counting information to evaluate their business situations.
The first few chapters in accounting provide the basic knowledge
on the concept, rules and guidelines, recording of transactions, clas-
sification of accounts and to its summarization. Students will de-
velop a basic understanding on the preparation on how to generate
financial statements / information of individual form of business
units run by individuals.
Opportunities to visit a few organizations in the nearby locality and
an interaction with the accountant will give an exposure to the stu-
dents on how books of accounts are kept as well as how to record
transactions. Such field visits will provide firsthand experience to
the students, which no teacher will be able to give in the classrooms.
Students will get a primary knowledge on, small traders who don't
maintain their books under double entry system of accounting, in
the chapter 'Accounts of incomplete records'. A familiarization is
possible by taking the accounts of nearby small shops or using the
accounts of parents of students who pursue business as an occupa-
tion.
2. Entrepreneurial Values
Commerce education should emphasis on imparting practical skills
and should develop entrepreneurial values and attitudes among
students, so that they are motivated to be enterprising, creative, risk
bearing, taking initiative and induced to take up their own ven-
tures. In order to understand what is the result of his business and
where do it stand, continuous monitoring and analysis of the profit
and loss account and Balance Sheet of business is inevitable. Acqui-
sition of the skills of reading and analyzing the financial statements
will help the entrepreneur in decision making.
37
There is a saying - "The accountant is the person, an entrepreneur is

most likely to call in the morning after sleepless night thinking about
his company". The above statement is true in the sense when an
entrepreneur, as a leader understands the importance of account-
ing profession.
3. ICT Enabled
NCF 2005 and KSC 2013 stress the need on developing practical
skills and as a part of it, Information Communication Technology
based education should be given emphasis. Development in the
field of computers and IT has influenced the way business is trans-
acted. The expansion of e-commerce, e-finance, e-marketing, e- busi-
ness, e-accounting, and Outsourcing business activities have influ-
enced the business process in a great way. These have to be reflected
in our syllabus also.
Advancement of technology has affected the way things are done in
various domains and Accounting is no exception. The traditional
books kept manually are replaced by computers. In the first year
accounting till the preparation of final accounts and for its analysis,
students can easily use any computer accounting package. Account-
ing software allows reconciliations, sales order and purchase order
processing, stock monitoring and automatic updating, preparation
of final accounts, budgeting etc., in automatic and smooth manner.
Students and teachers can even resort to spread sheet packages for
the preparation of various accounts, trial balance and final accounts
including reconciliation,
As part of projects or assignments teachers and students can access
data from the published accounts of companies using internet, and
the so collected data can be used to work out projects or assign-
ments.
4. Practical skills
Greater highlight on acquisition of various skills such as presenta-
tion, communication, analysis, problem solving and logical reason-
ing which are used commonly in all commerce related occupations
are given importance. The opportunities for development of these
skills in students must be given focus in the curriculum and KSC
38
2013 puts forth that these skills can be developed through

constructivism based teaching learning process while having class-
room transactions.
Nowadays, accounting professional bodies pay attention to practi-
cal skills and experience of their students and members and con-
sider such experience to be a crucial step for boosting a career. An
inspiring teacher will be able to sensitize his students on the skills
and experiences required from the early levels of learning. Students
should know what is happening in the industry and latest trends in
the field of accounting - by providing regular interactive classes from
professional people or by organizing field trips etc.
The following aspects are highlighted in the curriculum revision.
• Mobilisation and utilization of all resources including hu-
man resources as well as comprehensive planning, organi-
zational competence and intellectual leadership are neces-
sary in students for social development. The ultimate aim
of commerce education is to mould such a force, who can
work for social upliftment.
• Increased production and distribution process due to in-
dustrial revolution has enhanced the role of commerce edu-
cation universally.
• Globalization and liberalization has fastened the opening
up of the economy and business has flourished cutting
across the borders of countries which emphasized the im-
portance of accounting standards.
• Every human being require a set of skills for achieving suc-
cess in life and commerce education gives emphasis to de-
velopment of these set of practical skills in commerce stu-
dents.
• The task of utilization of resources by conservation of envi-
ronment and compassion to fellow beings on the one hand
and enrichment of skills, rise in confidence on the other is
inevitable in students for social growth. The inculcation of
the above leadership qualities in students should be the
39
essence of teaching and learning of commerce.

• The syllabi and text books in commerce have been prepared
keeping in mind the values and attitude that a commerce
student should develop in the social context. A commerce
student should not only know the rules, principles and
guidelines for recording business transactions but also it is
inevitable for him to fulfill some obligations and responsi-
bilities. A student who takes a profession in accounting must
have sound moral judgments in all accounting activities.
Various stakeholders of a firm rely heavily on the financial
statements. The accountants should show due diligence,
integrity, objectivity and care, while preparing these state-
ments. Teacher's text includes slots pointing out the atti-
tudes and values to be followed while performing account-
ing activities. Teachers should ensure that these values are
also inculcated while facilitating learning activities in the
accounting classrooms.
• Curriculum transaction techniques lay stress to the attain-
ment of learning outcomes stated in the curriculum by all
learners.
• Continuous and comprehensive evaluation helps in improv-
ing students performance by identifying whether the learn-
ing outcomes has been achieved or not. A major focus is
given here to improve the effectiveness of CCE by intro-
ducing different modes of assessment in teaching and learn-
ing process.
About the subject 'Accountancy'
The subject Accountancy is introduced at higher secondary educa-
tion, as formal commerce education is provided after first ten years
of schooling.
With the fast changing economic scenario and business environment
in a state of continuous flux, elementary business education along
with accountancy as a language of business and as a source of fi-
nancial information has carried out a place for itself at the higher
secondary stage. Its syllabus content should give students a firm
40
foundation in basic accounting principles and methodology and

also acquaint them with the changes taking place in the presenta-
tion and analysis of accounting information, keeping in view the
development of accounting standards and use of computers. Against
this background, the subject puts emphasis on developing basic
understanding about the nature and purpose of business informa-
tion and its use in the conduct of business operations. This would
help among students in delivering skills, logical reasoning, analy-
sis and judgment.
Accounting as an information system aids in providing financial
information. Computerised accounting is becoming more and more
popular with increased awareness about use of computers in busi-
ness. Keeping in view, the student are exposed compulsorily to the
basic knowledge about computers and its use in accounting and
has given opportunity to understand further about computerised
accounting system.
Objectives
1. To familiarise the students with accounting as an informa-
tion system
2. To acquaint the students with basic concepts of accounting
and accounting standards
3. To develop the skills of using accounting equation in
processing business transactions
4. To develop an understanding about recording of business
transactions and preparation of financial statements
5. To enable the students with accounting for reconstitution
of partnership firm
6. To enable the students to understand and analyse the fi-
nancial statements
7. To familiarise students with the fundamentals of compu-
terised system of accounting
41
LEARNING STRATEGIES
Variety of learning strategies can be used for transacting the content
which will open the new ways of constructing knowledge to the
Commerce students to enlighten the knowledge explosion in Com-
merce. In view of this objective the following action oriented learn-
ing strategies are introduced at the higher secondary level. Some of
them are explained below.
1. Project Method
Project is one of the most appropriate strategies for learning com-
merce. It consists of a sequence of activities of a learner to collect,
tabulate, analyse and interpret relevant data so as to evolve find-
ings to solve the felt problem. Project Method is based on the idea
that true knowledge is acquired not merely by reading books and
attending lectures but by the learner themselves. Learning by do-
ing and learning by living are two cardinal principles of this method.
It is a creative way of self learning which help to develop the full
potential of the learners.
Stages
I Selection of topic
a Identify the Problem
A project has to be done on a felt problem in the classroom learn-
ing situation. It should not be done for the sake of project work,
but for problem solving. Most of the project work areas evolve
from the academic discussions in the classroom For example,
b Formulate a Suitable Title
Based on the identified problem, a suitable title has to be for-
mulated. The title must be specific, clear and appropriate to the
subject.
II State the Objectives

In view of the problem identified, the learner wants to gather
some information relating to the problem. This will help the
learners in understanding the problem better.
III Planning
42
This can be done through a discussion in the class.

a Formulation of Hypothesis
Planning can begin with formulation of hypothesis.
b Methods and techniques
Methods and technique should be based on the objectives and
hypothesis of the study. The nature of study, suitability of tools,
methods of learning etc should be related to one another.
c. Identify the Source of data
Based on the objectives data may be collected from primary or
secondary sources. Primary sources include real field of study.
The data can be collected through observation, questionnaire,
Interviews etc. Secondary sources include published documents
namely report, news articles, paper reports etc.
d. Collection of Data
Data may be collected through various methods, for which tools
have to be prepared.
e. Analysis and Interpretation of data
The data so collected should be tabulated, analysed and inter-
preted to derive possible conclusions. Collected information
from the interview should be processed for analysis and inter-
pretation.
f. List out the findings
The conclusion derived be systematically listed to arrive a sug-
gestions or conveying of useful information.
IV. Execution of project
An outline of the project based on the components discussed
above may be drawn. The project activities may be carried out
according to the plan with necessary modifications as and when
required.
V. Preparation of Report
The report of the project should be prepared in a self explana-
tory for future reference, containing charts, pictures, document
files etc.
The report may be prepared in the following format
43
1 Title page
2 Authentication certificate
3 Acknowledgement
4 Content
5 Body of the report
a. Introduction
Stating the problem, objectives, hypothesis and relevance of
study.
b. Methodology
Methods and techniques, source of data, tools used for the study,
details of collected data.
c. Analysis and interpretation of data
Tabulation of data, analysis and interpretation
d. Findings
6 Suggestions if any
7 References/ Bibliography
8 Appendices (questionnaire, observation schedule, check-
list, interview schedule.)
VI Presentation of Project
Through a project presentation, the learner is getting accepted. Ideas
can be communicated and shared with others. It can be presented
in a commerce club meeting.
2. Assignment
Assignment is some specific work assigned to the students as part
of their academic enrichment. These are learning activities under-
taken as a continuation of classroom activities to achieve learning
outcomes. They should be completed in time bound manner. They
help to lead the learner to higher level of learning from the present
status. It may vary from writing an essay to organising project works.
Challenging assignments can motivate the students to involve in
group dynamics and achieve fruitful results. The teacher may act
as a guide.
Assignments may be given on individual or group basis. Assign-
44
ments include preparation of notes, preparation of charts, models,

collection of materials from industrial and financial institutions etc.
Assignments develop skills of reference, observation, enquiry and
reporting etc. It ensures the affective utilization of leisure time of
the students.
3. Seminar
Seminar is a learning method involving an in-depth analysis of a
specific topic, preparation of a paper and presentation before the
students. The paper is presented by either one student or a group
of students. After the presentation, there will be a discussion/ in-
teraction in which all students can participate. The students get an
opportunity to clear their doubts and make clarifications. Seminar
helps to develop communication skill and to overcome stage fright.
Stages
1. Selection of topics
The topic of seminars should be relevant to the subject of study.
2. Assignment of topic to individual student or teams
The topic may be prepared by a one student or a group of stu-
dents
3. Collection of relevant information
Information required for seminar can be collected from vari-
ous sources namely websites, News papers, Magazines, T.V,
Radio etc.
4. Preparation of the draft paper
Based on the information collected, the presenter may prepare
a draft paper and submit it to the teacher for comments.
Revise the draft paper based on the comments by the teacher
5. Finalisation of the paper
The student may submit the revised draft to the teacher for
approval.
6. Program scheduling
Now the task of the students is to fix the date, time and venue
of the seminar. For this a seminar convener may be selected
from the students.
45
7. Seminar paper presentation

The student/students shall present the paper in the seminar.
One of the students can moderate the seminar. In initial stages
the teacher may moderate the seminar.
8. Discussion / Interaction
A panel of respondents from the students makes comments on
the topic. This will be followed by a general discussion.
9. Summing up the deliberations
The moderator sums up the deliberations
10. Evaluation/ Feed back
Both teacher and students evaluate the programme.
11 Preparation of final report
It should contain all the points covered in the seminar along
with the additional points discussed and consolidated. Indi-
vidual report is needed.
4. Debate
Debate is one of the effective learning strategies for commerce classes.
It is based on the modern psychological concept of social
constructivism. Debate is a creative and collective process of elicit-
ing all related facts of a topic. It also enables the participants to en-
rich their knowledge through healthy dialogues. In a debate, there
will be minimum two groups and a moderator. The skills of critical
thinking, positive interaction etc of the students can be developed
through this learning method. It avoids stage fear of students and
enhances substantiating abilities of the learner.
Stages
1. Topic Selection
The topic of the debate should be relevant and having poten-
tial for different viewpoints.
2. Selection of panels
At least two panels of students may be selected to argue for
and against the topic. Special care should be taken to select the
students keeping balance with their individual differences like
intelligence, gender, social status in the class. (The ideal number
in a panel may vary from three to five)
46
3. Selection of a moderator
A student representative should be selected to moderate the
session where as the teachers will act as a guide. In the initial
stages teacher may act as the moderator.
4. Collection of information
The panel of students should be guided by the teachers to col-
lect as enough information from news papers, Magazines,
Websites, Govt. reports, TVs, Radios etc.
5. Conducting the debate
The teacher acts as overall guide and student representative as
moderator will facilitate the debate. Both the panels can raise
their views and arguments on the topic. The rest of the stu-
dents can participate as observers. They can make interven-
tions to present their views only with the permission of the
moderator. The moderator should be well aware of all the as-
pects of topic but should take an impartial and independent
position. He should be able to inspire the panels to elicit as
much information as possible and in case of necessity from the
observers also. The moderator should take special caution to
control and avoid any sort of personal conflicts.
6. Conclusion
The Moderator should conclude the debate by expressing his
final version based on the views evolved from the debate. Then
the teachers can make his/her observations comments and sug-
gestions.
5. Field trip/ Study tours

Field trip provides direct and contrived experience to the learners.
It is based on the principle that ‘Seeing is better than hearing’ It gives
an opportunity to students to observe the real life situation of the
topic. It also enables the students to retain the learning longer and
to make the topic more interesting. For instance, visiting industrial
unit. e.g. MILMA would enable students to know different produc-
tion processes, functional divisions, levels of management, prod-
uct diversification, marketing strategies, accounting process, pack-
aging etc.
Both field trip and study tours give an opportunity for the students
47
to understand the real life situation. However there is slight differ-

ence between these two. Field trip is a short visit to a local area with
a specific purpose. On the other hand study tour is a trip with more
than one objective. It requires extensive planning and preparations.
Stages
1 Selection of venue
2 Getting permission from concerned organisation.
3 Planning and Scheduling of the trip – which consists of
preparation of tool for study whom to be introduced date,
time, expenses etc.
4 Assigning task to the group leaders
5 Actual visit
6 Monitoring the visit by the teachers
7 Reporting
8 Evaluation
Brain storming
Brainstorming is one of the best methods of creative problems solv-
ing. It facilitates generation of ideas quickly. It stimulates fresh ideas
and enables participants to break loose from fixed ways of respond-
ing to problems.
Brain storming Rules

1 No response is wrong
2 Welcome as many responses as possible, quantity is re-
quired
3 Every response is accepted without discussion or judgment
4 No criticism is allowed
5 Allow to work on others idea
Once brainstorming has elicited quantity sufficient number of re-
sponses, the students may be guided to use their analytical and
synthesing skills to determine best ideas.
Steps in brain storming

The following steps may be used to run a brain storming session
48
1 Presentation of the problem

2 Provide relevant information
3 Record the ideas put forth by the participants
4 Combine similar ideas
5 Evaluate each idea/solution
6 Selection of the best solution
It is important to note that the last step is not an essential part in
brainstorming when it is used as an instruction strategy.
Discussion
Discussion is a strategy in which students learn by sharing experi-
ences and opinions with each other. The teacher has to carefully
plan the lesson to reach desired learning outcomes and guides the
discussion through questioning and summarizing. The group in-
teracts in response to questions. The flow of communication can be
smoothened among all the learners.
Organisation of Discussion
The following stages are involved on the organisation of discus-
sion.
1 Introduction
It should be initiated by the teacher. As much as facts and
features that can be elicited should be drawn
The topic for discussion may be pinpointed and the key
areas are to be developed
2 Development
In this stage the teacher can use
• Lead points
• Follow up interactions
3 Transitions
In this stage, the key points may be reviewed. Participation
of all learners may be ensured.
4 Summarisation /Conclusion
At this stage teacher may provide additional support mate-
rial to ensure the achievement of the objectives.
49
Role Play
In role-play the students have to project themselves into simulated
interpersonal situations and act out the part of the persons and situ-
ations assigned to them. It is a very useful strategy to develop inter-
personal skills and strengthen learning in identified areas.
Practical Work
Knowledge about business process, procedures and practices is vital
for students of commerce. A student has to supplement his class-
room learning with field work and practical. For example, practical
knowledge about the procedure for setting up and registration of a
small scale unit, for raising medium term loan from a financial in-
stitution, for registration of brands, for importing equipment and
machinery etc. is a test of one’s proficiency in Business studies. It
can be acquired through interaction with experts, field visit, analys-
ing application forms observation role play and projects. Practical
work helps the students in gaining this knowledge and experience.
The student has to collect the knowledge and document it along
with all the specimens, forms etc. in blank. It will make his learning
current and purposeful. Acquainting students with numerous ad-
vantages of computerised accounting and their application in busi-
ness also form part of practical work in the field of accounting.
Practicals based on each unit should be given to the student and
make them to record in a book, following the steps such as input,
processes, output.
Case study
A case may be a person, institution or a community.
Case study is an indepth analysis of an actual event or situation. It
presents real pictures of situations with facts, objective information
or data. Learners analyse the case to interpret, predict and revolve
issues associated with it. The case study provides the learner an
opportunity to analyse and apply concepts, data and theory taught
from the class. Learners can work individually or in groups.
By studying realistic cases in the classroom, students develop new
insights into the solution of specific on-the-job problems and also
acquire knowledge of the latest concepts and principles used in
problem solving.
50
Case may be presented by the teacher or may be provided in print

form. A simple case study may have the following steps.
• Collection of data
• Conversion of data into information
• Analysis of the case in groups
• Presentation of the findings by each group leader
• Evaluation
Collections
Collection is continuous learning activity which ensures students
participation and involvement in whole. In commerce, collection
can be of pictures, brochures, advertisements, ideas, documents etc.
Collection of materials provides direct experience to learners. An
exhibition can be conducted to display the collected materials which
strengthen various concepts among learners.
In addition to the above mentioned learning strategies, there are
many other learning strategies which can be used in appropriate
situations to enrich learning process such as interview, problem
solving etc.
Learning Resources
1. Bulletin Board
Bulletin board is a device that display news cuttings, posters, arti-
cles, paintings advertisement copies, leaflets etc, collected by the
students that has relevance to Commerce. Bulletin board is very
suitable for pasting announcements and assignments. Students them-
selves should be made in charge of the bulletin boards and the
teacher should only act as a guide. The skill of information gather-
ing and dissemination can be achieved through this activity.
2. Library
Library is a resource centre which provide information to the stu-
dents through secondary devices namely text books, reference books,
journals, magazines, newspapers, internet etc. If assignments includ-
ing solution to problems are carefully given work in the library for
their completion will develop desirable reading habits among stu-
dents. It creates reading habits among students and enable them to
better utilise leisure time in the School.
51
3. Club
Club helps to develop the potential skills, capabilities and knowl-
edge of the students. It enhances the team building process, collec-
tive and participatory learning, promote innovative ideas, enrich
the existing knowledge, and develop interactive skills enable or-
ganisational and leadership qualities.
Activities
1 Conducting commerce and management quiz
2 Conducting essay competitions on commerce topics and
current affairs
3 Conducting invited lectures/ seminars of professionals,
academicians, industrialists, educationalists etc.
4 Conducting debates on contemporary topics with active
participation of students.
5 Conducting exhibitions on commerce.
6 Conducting study trips to industrial units, business estab-
lishments, financial enterprises, business schools.
4. Activity Log in Accountancy

Activity log is a record of activities undertaken by the students as
part of the learning process. The students should record the whole
learning process, the problems encountered during the learning
process, possible courses of action, constraints and difficulties, in-
novative ideas etc. The teacher should periodically verify and re-
view the activity log maintained by the students and make neces-
sary comments and suggestions.
Teacher Text of Accountancy

The teacher text is aimed at helping the commerce teacher in the
transaction of the new curriculum.
• makes clear the learning outcomes.
• contains the minimum package of learning activities.
• provides guidelines for planning the activities.
• provides hints for assessment during the learning process
and at the end of a period.
• stimulates teacher’s thinking.
52
Syllabus
Accountancy with Analysis of Financial Statements - XII
Part - A - Accountancy
Chapter 1: Accounting for not-for-profit organisation (24 Periods)
1.1 Meaning and characteristics of not for profit organisation
1.2 Accounting records of not for profit organisations
1.3 Receipt and payment accounting
1.4 Income and Expenditure accounting
1.5 Balance sheet
1.6 Treatment of peculiar items
1.7 Income and expenditure account based on Trial Balance
1.8 Incidental trading activity
Chapter 2 : Accounting for partnership : Basic concepts (16 Periods)
2.1 Nature of partnership
2.2 Partnership deed
2.3 Special aspects of partnership accounts
2.4 Maintenance of capital accounts of partnership
2.5 Distribution of Profit among partners
2.6 Past adjustments, Guarantee of Profit to Partners
2.7 Final Accounts
Chapter 3 : Reconstitution of a partnership firm - Admission of a
partner (22 Periods)
3.1 Modes of reconstitution of a partnership firm
3.2 Admission of a new partnership
3.3 New profit sharing ratio
3.4 Sacrificing ratio
3.5 Goodwill - meaning, factors affecting, methods of calculation,
Accounting treatment
3.6 Adjustment for resources accumulated profits and losses
3.7 Revaluation of assets and reassessment of liabilities
53
3.8 Adjustment of capitals

3.9 Change in profit sharing ratio among the existing partners
Chapter 4 : Reconstitution of a partnership firm-retirement/death
of a partner (20 Periods)
4.1 Ascertaining the amount due to retiring/deceased partner
4.2 New profit sharing ratio
4.3 Gaining Ratio
4.4 Treatment of Goodwill
4.5 Adjustment for revaluation of assets and Liabilities
4.6 Adjustment of resources accumulated profits and losses
4.7 Disposal of amount due to retiring partner
4.8 Adjustment of partner's capital
4.9 Death of a partner
Chapter 5 : Dissolution of partnership firm (22 Periods)
5.1 Dissolution of partnership firm
5.2 Modes of dissolution
5.3 Settlement of Accounts
5.4 Accounting treatment
Part - B - Analysis of Financial Statements

Chapter-1 : Accounting for share capital (22 Periods)
1.1. Features of companies
1.2. Kinds Companies
1.3. Classes of shares
1.4. Share capital and its categories
1.5. Procedures of share issue
1.6. Accounting treatment of share issue
1.7. Calls in arrears and calls in advance
1.8. Over subscription and Under subscription
54
1.9. Issue of shares at premium and discount

1.10. Issue of shares for consideration other than cash.
1.11. Forfeiture and re-issue of shares
Chapter-2 : Issue and Redemption of debentures (16 Periods)
2.1. Meaning of debentures
2.2. Types of debentures
2.3. Distinction between shares and debentures
2.4. Issue of debentures
• At par
• At discount
• At premium
• Oversubscription
• Under subscription
• For consideration other than cash
2.5. Issue of debentures as collateral security
2.6. Terms of issue of debentures
2.7. Interest on debentures
2.8. Writing off discount/loss on issue of debentures
2.9. Methods for redemption of debentures
• Payment in lump- sum
• Payment in installments
• Purchase in open market
• Redemption by conversion
• Sinking fund
Chapter-3 : Financial statements of a company (12 Periods)
3.1 Financial Statements:
• Meaning
• Nature
• Objectives
55
3.2. Form and content of Balance Sheet of companies

3.3. Form and content of Statement of Profit and Loss.
3.4. Preparation of Statement of Profit and Loss and Balance Sheet
of companies
3.5. Importance of financial statements
3.6. Limitations of financial statements
Chapter-4 : Analysis of Financial Statements (16 Periods)
4.1 Analysis of Financial Statements
• Meaning
• Importance
• Objectives
4.2. Tools of analysis of financial statements
4.3. Comparative Statements
4.4. Common size statements
4.5. Trend Analysis
4.6. Limitation of financial analysis.
Chapter-5 : Accounting Ratios (19 Periods)
5.1. Ratio analysis
• Meaning
• Objectives
5.2. Advantages and limitations of ratio analysis
5.3. Traditional and functional classifications of ratios
5.4. Liquidity ratios
• Current ratio
• Quick ratio
5.5. Solvency ratios
• Debt-Equity ratio
• Debt to capital employed ratio
• Proprietary ratio
• Total assets to debt ratio
56
5.6. Interest coverage ratio

• Activity or Turn-over ratios
• Inventory Turnover
• Trade receivable Turnover
• Trade Payable Turnover
• Investment Turnover.
• Fixed Assets Turnover
• Working Capital Turnover
5.7. Profitability Ratios
• Gross Profit Ratio
• Operating Ratio
• Operating Profit Ratio
• Net Profit Ratio
• ROI
• RONW
• EPS
• Book value per share
• D/P Ratio
• P/E Ratio
Chapter-6 : Cash flow statement (19 Periods)
6.1. Cash flow statement
• Meaning
• Objectives
• Benefits
6.2. Cash, cash equivalents and cash flows.
6.3. Operating activities
6.4. Investing activities
6.5. Financing activities
6.6. Preparation of Cash flow statement- Direct method
6.7. Preparation of cash flow statement- Indirect method.
57
Part - C - Computerised Accounting

Chapter 1 : Overview of computerised
accounting system (10 Periods)
1.1. Computerised Accounting System
1.2. Components of CAS
1.3. Features of CAS
1.4. Grouping of Accounts
1.5. Software for CAS-Security features of CAS
1.6. Advantages of CAS
1.7. Limitations of CAS
1.8. Accounting Information System
Chapter 2 : Spread sheet (26 Periods)
2.1. Basic Concepts-rows-columns-cell-active cell-cell address-
ranges-cell references-relative-absolute-mixed references-La-
bels-Formulas-Functions-Naming cells and ranges -IF func-
tions and Nested IF Functions, SUM and SUMIF functions,
AVERAGE Function, DATE(),Time(), TODAY(), NOW(),
DAY(), DATEVALUE()-Mathematical Functions-
SUMIF(),ROUND(), ROUNDUP(), ROUNDDOWN(),
COUNT(), COUNTA(), COUNTBLANK(), COUNTIF(),
ROWS(array), COLUMNS(array)-Text Manipulation Func-
tions-TEXT(), CONCATENATE()-Logical Functions-AND(),
OR()-Lookup and Reference Functions-vector form and array
form-VLOOKUP(), HLOOKUP()-Financial Functions-
ACCRINT(), CUMIPMT(), PV(),FV(), PMT(),RATE(),NPV()
Functions.
2.2. Data Entry Text Management and Cell Formatting.
2.3. Data Formatting.
2.4. Defining Print Area
2.5. Output Reports
2.6. One variable Data Table
58
2.7. Two variable Data Table

2.8. Pivot Table
2.9. Common Errors
Chapter 3. Use of spreadsheet in business applications (16 Periods)
3.1. Payroll Accounting
3.2. Payroll components
3.3. Template Design
3.4. Asset Accounting - Straight Line method - Written down value
method.
3.5. Loan Repayment schedule.
Chapter 4 : Graphs and charts for business data.
4.1. Graphs and Charts-
4.2. Basic Steps for Graph/chart/Diagram
4.3. Elements of a Chart/ Graph-
4.4. Formatting of Chart
4.5. chart/graph-2D-3D charts
Chapter 5 : Accounting software package :Tally
5.1. Features of Accounting software
5.2. Steps in Installation of CAS
5.3. Use of Accounting Software
5.4. Company Creation
5.5. Hierarchy of account
5.6. Account group of Balance Sheet
5.7. Account group of Profit and Loss Account
5.8. Account Masters
5.9. Account Group Creation-
5.10. Account Ledger Creation
5.11. Voucher Entry Creation
5.12. Trial balance
5.13. Balance Sheet and Profit and Loss Account.
59
5.14. Display Report

5.15. Construction of Bank reconciliation statement (small project
only)
5.16. Need and Security Features of the Accounting
Chapter 6. Database management system
for accounting (20 Periods)
6.1. Understanding and Defining database Requirement

6.2. Identification of Data to be stored in tables-Logical structur-
ing of data in tables
6.3. Creating Database Tables in MS Access
6.4. Creation of Query in MS Access
6.5. Creation of Forms in MS Access
6.6. Creation of Report in MS Access.
60
Learning Outcomes
The Learner will be able to :
1. Accounting for Not-for-Profit Organisation
1.1 State the meaning and the accounting records to be maintained
by not for profit organizations
1.2 Prepare receipts and payments accounts from the given data
1.3 Distinguish between the receipts and payments account and
income and expenditure account
1.4 Prepare Income and Expenditure account and Balance Sheet
from a given Receipts and Payments account and additional
information
1.5 Explain the treatment of certain items such as legacies,
subscription of members etc.
2. Accounting for Partnership: Basic Concepts
2.1 Define the partnership and its features
2.2 Identify the meaning of partnership deed and list out its
contents
2.3 Explain the provisions of Partnership Act 1932 in the absence
of written agreement
2.4 Recognize the different methods of capital accounts to be
maintained and its preparation
2.5 Prepare profit and loss appropriation account
2.6 Calculate interest on drawings and interest on capital under
different situations
2.7 Illustrate how the guaranteed amount of a partner affects the
distribution of profits among the partners
2.8 Make rectification of errors and omission found after the
distribution of profits to partners
2.9 Prepare final accounts of partnership firm
3. Reconstitution of partnership firm – Admission of a

partner
3.1 Explain the meaning and concept of reconstitution of a
partnership firm
3.2 Identify the accounting adjustments to be made in the books
of the firm when a new partner is admitted
3.3 Determine the new profit sharing ratio and calculate the
sacrificing ratio
61
3.4 Describe goodwill and enumerate the factors affecting it

3.5 Explain the methods of valuation of goodwill
3.6 Describe how goodwill is treated under different situations
when a new partner is admitted
3.7 Apply the rules of accounting fro revaluation of assets and
reassessment of liabilities
3.8 Identify the need for distribution of past profits and losses
3.9 Determine the capital of each partner according to the new
profit sharing ratio by making necessary adjustments
3.10 Illustrating the adjustments required on changes in the profit
sharing ratio among the existing partners
4. Reconstitution of partnership firm – Retirement / Death of

a partner
4.1 Ascertain the new profit sharing ratio and gaining ratio of the
remaining partners after the retirement/ death of a partner
4.2 Make the accounting treatment of goodwill on retirement of a
partner of a liabilities
4.4 Explain the need for adjustment for accumulated profits and
lossess
4.5 Calculate the retiring / deceased partner’s claim against the
firm and settlement of accounts
4.6 Prepare the retiring partner’s loan account
4.7 Prepare the deceased partner’s executors account in the case
of death of a partner
4.8 Construct the reconstituted Balance Sheet
5. Dissolution of Partnership Firm

5.1 State the meaning and concept of dissolution of partnership
firm
5.2 Distinguish between dissolution of partnership and
dissolution of partnership firm
5.3 Explain the various modes of dissolution of the partnership
firm
5.4 Prepare realisation account
5.5 Pass journal entries and prepare the necessary ledger accounts
to close the books of the firm.
62
ANALYSIS OF FINANCIAL STATEMENTS
1. Accounting for Share Capital

1.1 Explain the basic nature of a joint stock company
1.2 Identify various types of companies
1.3 Distinguish between equity shares and preference shares
1.4 Calculate different categories of share capital
1.5 Describe important steps in the procedure of share issue
1.6 Pass journal entries of share capital transactions
1.7 Explain the accounting treatment of calls - in - advance
1.8 Outline the accounting treatment of over subscription and
under subscription
1.9 Pass journal entries for shares issued at a premium and at a
discount
1.10 Explain accounting treatment of shares issued for consideration
other than cash
1.11 Record journal entries for forfeiture and re issue of shares
2. Issue and Redemption of debentures

2.1 Distinguish between shares and debentures
2.2 Explain different types of debentures
2.3 Record journal entries for issue of debentures at par, at
premium and at discount
2.4 Journalise share capital transactions under oversubscriptions
and under subscription
2.5 Explain the concept of debentures issued for consideration
other than cash
2.6 Explain accounting treatment of debentures issued as collateral
security
2.7 Pass journal entries in different situations on issue and
redemption of debentures are made
2.8 Explain the accounting the accounting treatment of interest on
debentures
2.9 Pass journal entries for writing off the discount/ loss on issue
of debentures
2.10 Describe the accounting treatment in different methods used
for redemption of debentures.
63
3. Financial Statement of a Company

3.1 Explain the meaning, nature and objectives of financial
statements
3.2 State the content of Balance Sheet of a company as per revised
schedule VI, Part - I
3.3 State the contents of statement of profit and loss of a company
as per revised schedule VI , Part - 1
3.4 Prepare the financial statements of a company
3.5 Describe the significance and limitations of financial statements
4. Analysis of Financial Statements

4.1 Describe the meaning, significance and objectives of analysis
of financial statements
4.2 Identify the various tools of financial analysis
4.3 Prepare comparative statements
4.4 Prepare common size statements
4.5 Calculate trend percentages
4.6 State the limitations of financial analysis
5. Accounting Ratios
5.1 Explain the meaning and objectives of ratio analysis
5.2 State the advantages and limitations of ratio analysis
5.3 Identify the traditional and functional classification of
accounting ratios
5.4 Calculate various liquidity ratios solvency ratios, activity or
turnover ratios and profitability ratios
5.5 Interpret the various ratios calculated for intra firm and inter
firm comparison
6. Cash flow Statement

6.1 Explain the meaning, objective and benefits of cash flow
statement
6.2 Identify cash equivalents and cash flows
6.3 Distinguish between operating activities, investing activities
and financing activities
6.4 Prepare of cash flow statement using direct method
6.5 Prepare cash flow statement using indirect method
64
COMPUTERISED ACCOUNTING
1. Overview of computerized Accounting System

1.1 Describe the need of Computerised Accounting
1.2 Identify the various components of CAS
1.3 Explain the need , importance and methodology of grouping
and codification of Accounts
1.4 Describe the use of a software for CAS and also the merits and
demerits of CAS
1.5 List out the various sub systems of Accounting Information
System and their functions and characteristics.
2. Spread Sheet
2.1 Outline the concept of spreadsheet and its basic features
2.2 State how to use a spread sheet for various purposes
2.3 Explain the use of various output reports and equip them to
prepare reports using spread sheet.
2.4 Check various errors while working with formulas and
functions and apply the knowledge in error handling.
3. Use of Spread sheet in Business Applications

3.1 Describe the concept of payroll accounting and apply the
knowledge in the development of Spreadsheet application for
computing employee's gross pay and net pay.
3.2 Narrate the concept of Computerized Asset Accounting and
apply the knowledge in the development of Spread sheet
application for computing depreciation under Straight Line
Method and Written Down value method
3.3 Describe the concept of calculating interest and repayment of
loan and apply the knowledge in the development of Loan
Repayment Schedule using Spread sheet.
4. Graphs and Charts for Business Data

4.1 Illustrate the data in graphical form in charts and diagrams
using MS Excel
4.2 State and apply the techniques of changing lay out, types and
models of graphs and charts for representing business data
using spread sheet
65
4.3 Describe the use of accounting/business data for graphical

representation
5. Accounting Software Package: Tally
5.1 Describe and demonstrate installation of Computerised
Accounting System
5.2 Describe the features of Tally accounting software such as
grouping of accounts, codification, Account Masters, voucher
entry etc
5.3 Create company and books of accounts
5.4 Construct Trial balance, Trading and P&L account and a
Balance sheet and other reports
5.5 Prepare a bank Reconciliation Statement as on date
6. Database Management System For Accounting

6.1 Define the requirements that are expected from the database
application
6.2 Explain how to identify data to be stored in tables and develop
a suitable framework
6.3 State different ways to structure database as per requirement
6.4 Design and create MS Access components such as tables, forms,
queries, and reports
6.5 Make use of MS Access for developing simple database
applications for capturing, storing and retrieving data
66
Scheme of Work
67
68
Unit Accounting
1 Accounting for Not-for- Profit
Organisation
Introduction
The very name of not-for-profit organizations reveal that they
exist only for rendering services and do not aim at any profit
behind their services. Sports and arts club, charitable
organizations, libraries, orphanages etc are examples of these
organizations. Since the very nature of these organization is not
profit making, their books of accounts will also differ in many
respects.
In this chapter, students are to learn mainly how do they
maintain their books of accounts particularly, the accounting
statements to be prepared as part of finalization of their
accounts.
Values and attitude
Though the main purpose of non-trading organisation is not
profit making, arriving at the surplus and maintenance of records
is important for such organisation.
Concepts/ Process/Activity Learning

Ideas with assessment outcomes
Accounting for not-for- Suggested Strategy: General discussion Students will be able
profit organisation. • Recalls the accounting procedure of a to:
- Meaning and char- trading concern • State the meaning
acteristics • Cites examples of organisations set up for and the accounting
- Accounting records rendering services records to be main-
• Discuss the role of profit and surplus in tained by not for
income statement profit organisations
Assessment:
• Participation in discussion • Differentiate a profit
• Generation of idea making enterise from
• Innovation a not for profit
• List of not for profit organisations organisation.
Skills:
• Comparison, Interpretation, Analysis
- Receipts and Pay- Suggested Strategy: Case Study and
ments account discussion
- Income and Expen- • Recalls the preparation of cash book citing
diture account examples
- Balance Sheet • Compares cash book with Receipts and • Prepare receipts and
Payments account payments account
• Recollects the accounting records from the given data
prepared in the case of trading firms with • Distinguish between
an interaction. the receipts and pay-
• Helps to distinguish between capital ments account and
receipts and payments with revenue income and expendi-
receipts and payments ture account
• Convince the students that revenue items • Prepare Income and
are part of Income and Expenditure Expenditure account
account and capital items and taken in a and Balance Sheet
Balance Sheet from a given Re-
Assessment: ceipts and Payments
• Involvement in discussion account and addi-
• Creative suggestion tional information.
Skills: • Explain the treat-
• Differentiation, comparison, inference, ment of certain items
analysis such as legacies,
subscription of mem-
bers etc.
Receipts and Payments Account, Income and Expenditure
Account and Balance Sheet:
Suggested Strategy: Discussion and Case Study
Students might have come across a number of businesses as well as non business
organizations. Ask the students to cite same examples of non-profit making
entities from their locality.
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• Sports club
• Library
• Charitable organizations/Trunts
• Hospitals
• Entertainment clubs
• Orphanages
•
•
Since students have learnt about how financial statements are prepared and
the purpose for which they are prepared, try to introduce the current topic as
an extension of Profit and Loss A/C & Balance Sheet as learnt in XI. While
financial statements are prepared by profit seeking organizations, the non-profit
seeking organizations have to prepare similar statements viz.,
a. Receipt and Payments account
b. Income and Expenditure account and
c. Balance Sheet
Introduce these statements with the help of the following exercises.
Activity - 1
Aby sports club has given their Receipts and Payments during the year 2014
Receipts: Rs.
Life Membership fee 4,000
Subscriptions 12,000
Legacy 3,000
Rent from lefting out 3,000
Entrance fee 1,500
Sale of news paper 100
Sale of grass 200
Donation 4,000
Payments:
Salary 800
Printing Expenses 200
Furniture purchased 2,000
Sports items purchased 1,500
Repairs 1,000
Tournament Expenses 800
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Ask the students to find out the true balance of cash from the above receipt
and payments for the year 2014.
Also ask them to recall the rule for preparation of cash book. The same rule is
applicable to Receipt and Payment account.
Now the students will have some idea how to prepare a Receipt and Payment
account. At this point of time partially drawn receipts & payment a/c can be
given for filling the missing items and for balancing the account.
Receipts and Payments accounts for the year ended 31/03/2014
Receipts Payments
To Life membership fee 4000 By Salary 800
To Subscriptions ? By Printing Expenses ?
To Legacy ? By Furniture purchased ?
To Rent from hall 3000 By Sports items purchased ?
To Entrance fee ? By Repairs ?
To Sale of news paper ? By Tournament Expenses 800
To Sale of grass ?
To Donation 4,000 By Balance c/d (Cash left ?
at the end of the year) 21500
27800 27800
On consolidation, the teacher is expected to give a clear picture about the
various accounts involved in it. The points to be highlighted may include:
a. There cannot be any distinction between capital and revenue items
while receipt & payment account is prepared.
b. All receipts are shown on the debit side and payments on credit in
the receipts and payments account.
• The revenue items shall be placed in the revenue account [ Income
and Expenditure] and capital items in the Balance Sheet
TEACHER INPUT
Students shall to be made capable to identity capital and revenue items
and let them convert this into debit and credit items and the teacher can
convince that revenue items shall be part of Income and Expenditure
account and capital items, part of Balance Sheet.
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Activity: 2
Now the above items can be posted in the following format.
Income and Expenditure account for the year ended 31st March 2014
Expenditure Income
To Salary 800 By Life membership fee 400
To Printing Expenses 200 By subbscriptions 12000
To Repairs 1000 By Legacy 1500
To Tournament Expenses 800 By Rent from letting out 3000
By Entrance fee 1500
By Sale of news paper 100
By Sale of grass 200
To Surplus 15900
( Balancing figure)
18700 18700
Balance Sheet as on 31st March 2014
Liability Asset
Capital Fund: Cash 21,500
Life Membership : 3,600 Furniture 2,000
Legacy : 1,500 Sports Equipments 1,500
Donation : 4,000
9,100
Add: Surplus 15,900
25000 25000
Teacher Assessment:
I/ E Balance Correct Wrong
Items
account Sheet responses responses
1. Capitalised items will be shown in
2. ……..resembles a profit and loss a/c
3. Net operating result- (Surplus) is
shown on which side of Income and
Expenditure account
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Repository of CE possibilities
Unit
Process Assessment Portfolio Assessment
Assessment
• General discussion on the • List of not-for profit organisations.
meaning and characteristics
• List of accounting records kept by
of not for profit organisation
not for profit organisation
Unit test
• Case study and discussion • Completed accounting statements
on the preparation of of not for profit money exbited.
accounts of not for profit • Table showing differences
organisation between Receipts and Payments
a/c and Income and Expenditure
a/c
TE Questions
1. Find out the amount to be debited to Income and Expenditure account
during the year 2014.
a. Salary paid during 2014 Rs.15,000
b. Salary paid in 2013 for 2014 Rs. 3,000
c. Salary paid in 2014 for 2013 Rs. 2,000
d. Salary yet to be paid during 2014 Rs. 3,000
e. Salary to be paid in 2013 Rs. 4,000
2. A club has purchased sports equipments during the year 2014 for Rs.16,000.
It had in the beginning of the year sports items worth Rs.2,000 and Rs.3,000
at the end of the year. They had also purchased sports items for Rs.4,000
on credit.
Find out the amount of sports items to be debited in the Income and
Expenditure account?
3. Explain the treatment of the following items while preparing the accounting
statements in respect of a sports club.
a. Donation Rs.4,00,000
b. Life membership fee Rs.30,000
c. Subscription received Rs.10,000
d. Rent of hall Rs.3,000
e. Legacy receipts Rs.50,000
f. Tournament fund Rs.10,000
g. Tournament expenses Rs.7,000
4. Using the details in question no, find out capital fund of the club.
5. Find out the surplus / deficit of the above club?
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Unit
2 Accounting for Partnership :

Basic Concepts
Introduction
In principle there is no difference in the preparation of books of
accounts between a sole trader’s business and a partnership.
But in the context of partnership, profits are to be apportioned
of as there are a number of partners. Besides, the respective
shares of each partners are to be clearly shown in their capital
accounts. This necessitates a detailed study regarding how profit
and loss appropriation accounts are to be prepared and the
different methods of preparation of capital accounts
Values and attitude
Sharing of responsibility and profit, fair return to resources, and
utmost good faith

Partnership Suggested Strategy: General discussion Students will be able
- Meaning / case study to:
- Features • Find out answers for questions like the • Define a partnership
- Partnership Deed • What are the limitations of a sole trading and list out its fea-
- Rules applicable in firm? tures
the absence of deed • How can we overcome these limitations? • Identify the impor-
• Necessary of written agreement and the tance of partnership
contents to be included there in. deed and list out its
• Meaning of partnership, features and contents
contents of deeds • Explain the provi-
• Situations where no written agreement sions of Partnership
exist and rules applicable in that context Act 1932 in the ab-
Assessment: sence of a written
• Involvement in discussion agreement.
• Understanding the concept
• Innovation
Skills:
• Comparison, Interpretation, Analysis
Partners’ Capital ac- • Recognize the differ-

Suggested Strategy: General
count ent methods of capi-
Discussion
- Fixed capital a/c tal accounts to be
• Recalls the accounting procedure of a
- Fluctuating capital maintained and its
sole trading concern
a/c preparation
• Elicit the differences in the capital
accounts of partners and a sole trading
firm through a discussion
• Chart showing the format of different
types of capital accounts
Assessment:
• Active participation
• Logical thinking
• Accuracy and speed
• Reasoning
Skills:
• Differentiate, Compare, Interpret
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Profit and loss Appro- Suggested Strategy: Brainstorming and • Prepare profit and
priation account discussion loss appropriation
• Stimulative responses can be taken from account
the student about -
• Arriving at net profit, and the subsequnt
appropriations to be made in p/L a/c.
• Preparation of profit and loss appropriation
account
Assessment:
• participation
• Logical thinking
• initiation
• Recognition of debit and credit items in
the P/L appropriation a/c
Skills:
• Differentiate, Compare, Interpret
- Interest on capital Suggested Strategy: General discussion • Calculate interest on
- Interest on drawings • Recollect the treatment and calculation of drawings and interest
interest on capital and interest on drawings on capital under
citing examples of a sole trader different situations.
• Roll out certain cases or examples by
stating how interest on capital and
drawings are arrived at considering
duration, rate of interest, and amount
involved.
Assessment:
• Attainment of concept
• Involvement in discussion
• Creative suggestion
Skills:
• Differentiation, comparison, inference,
analysis.
Guarantee of profit to Suggested Strategy: Case study • Illustrate how the
a partner • Case study can be in groups to identify guaranteed amount
the deficiency of the guaranteed partner of a partner affects
• Preparation of profit and loss appropriation the distribution of
account to show how net profit is profits among
distributed among the partners partners
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Assessment:
• Calculation of individual partners’ share
• Identification of journal entry for adjusting
capital accounts
• Creative suggestions.
Skills:
Differentiation, comparison, inference,
analysis, Problem solving
Suggested Strategy: General discussion
Past Adjustments • Providing examples for items left out • Make rectification
[omissions] after the distribution of profit of errors and omiss
to the partners ions found after the
• List of items that are usually omitted at distribution of profits
the time of recording. to partners
• Notes on how to rectify these errors
Assessment:
• Attainment of concept
• Analysis
• Interpreting abilities
Skills:
analysis, problem solving
Suggested Strategy: General discussion
Final accounts • Prepare final
• Recall the preparation of final accounts
of a sole trading firm with adjustments accounts of
• Preparation of trading and profit & loss partnership firms
a/c
• Discussion on preparation of profit and
loss appropriation and capital accounts of
partners
Assessment:
• Contribution of useful ideas
• Ability to analyse
• Preparation of trading, profit and loss
account appropriation a/c as well as
Balance Sheet
Skills:
analysis, Problem solving.
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Guarantee of profit to a partner:

Suggested Strategy: Case study
Anil, Biju and Arun are equal partners. Arun was admitted into the firm who
has been given a third share with minimum of Rs.30,000 being the guaranteed
profit. During the year the firm has charged interest @10% on their respective
capital account balances. The profit reported by the firm during the year before
any appropriations was Rs.89,000. The capital account balances were as follows.
Anil Rs. 30,000
Biju Rs. 20,000
Arun Rs. 30,000
They wanted to know how much profit shall be available to each partner after
the appropriation.
Discussion points:
Students have to find out the following through the case analysis.
a. The new profit sharing ratio
b. The profit made by the firm
c. Ascertainment of interest on capital of each partner
Anil - ?
Biju - ?
Arun - ?
d. Ascertainment of profit after appropriations.
Total profit - ?
Less: Total Interest on capital - 8,000
Net profit available for distribution - ?
e. Arun's share of profit - ?
f. Guaranteed profit - 30000
Deficiency 3000
g. If nothing is mentioned as to how the deficiency is to be borne, then
what shall be the ratio to be applied for bearing the loss between Anil
and Biju?
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h. Find out the respective amounts of deficiency:

Anil - 1500
Biju - ?
Pass necessary journal entry to this effect?
Anil a/c Dr 1,500
Biju a/c Dr 1,500
To Arun a/c 3,000
After the above activity the teacher may ask the students to fill up the blanks in
the following profit and loss appropriation account.
Profit and loss Appropriation account
To Interest on capital By Net profit 89000
Anil ?
Biju ?
Arun 3000 8000
To share of profit
Anil 27000
Less: deficiency ?
Biju 27000
Less: deficiency ? ?
Arun 27000
Add: from Anil 1500
Biju 1500 30000
89000 89000
Self Assessment
Attributes Responses
a. I can independently prepare P/L
Appropration a/c
b. Average time taken for completion
c. I need further assistance
80
Unit
Assessment
• General discussion on the • Note on the meaning, features
meaning, features, of of partnership firms
partnership, partnership deed • Notes on partnership deed
and its contents. and list of its contents
• General discussion on the • Chart showing the format of
different methods of fixed capital accounts and
maintaining capital accounts of fluctuating capital accounts
partners
• Brainstorming on the • Prepared profit and loss
preparation of profit and loss appropriation a/c
Unit test
appropriation a/c
• General discussion on the • Notes on calculation of interest
calculation interest on capital on drawings and interest on
and interest on drawings capital
• Case study on guarantee of • Prepared profit and loss
profit to a partners appropriation account
• General discussion on past • Notes on rectification of
adjustments omissions and errors identified
after distribution of profit to
partners
• General discussion on • Prepared final accounts of
preparation of final accounts of partnership firm
partnership firms
TE Questions
1. State the rules applicable in the absence of a proper partnership deed?
2. 'A' and 'B' are partners whose capital account balances were Rs.70,000 and
Rs.60,000. 'A' has given a loan carrying an interest of 15% p.a to the firm at
the beginning of the year for Rs.1,00,000. The profits earned by the firm before
interest on loan & capital during the year was Rs.96,000. Interest is chargeable
@12% on capital account balances. Prepare a profit and loss appropriation
account and show how the profits are appropriated?
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3. A partner has withdrawn Rs.20,000 for the year 2014 - 15. If the rate of interest
is 10%, what will be the interest on drawings?
4. Sunil and Thomas are partners having contributed Rs.30,000 and Rs.20,000
respectively towards capital. If the firm made a profit of Rs.10,000 during the
year then,
a. What will be the share of profit of partners in the absence of written
agreement?
b. Show the impact in the capital accounts of partners, if the partners are sharing
profits in the ratio of 2:1
5. Is there any extension to profit and loss account, as far as partnership firm is
concerned? If so what is the purpose behind the preparation of the same?
82
Unit
3 Reconstitution of partnership firm -

Admission of a partner
Introduction
Expansion and diversification of any business concern need extra
funds and managerial skill. In a partnership, as compared to one
man business, it can add new partners; thereby the above
requirements of expansion can be easily met.
This chapter deals with the accounting procedure or the
adjustments to be done in the accounts on admitting more
members to the firm.
Values and attitude

Adding new blood can change the complexion and progression
of a partnership by providing the required momentum and
dynamism.

Reconstitution of part- Suggested Strategy: General The student will be able
nership firm. Discussion to:-
• Discussion on partnership deed and its • Explain the meaning
contents aiming to recall the concept and concept of re-
• Citing examples like the following constitution of a part-
Two partners decided to admit a partner
nership firm.
into the business
Do the above necessitate any change in
the partnership agreement?
• Similar instances of change in profit
sharing ratio like retirement of a partner
and dissolution can be given to the students
• Concludes by stating that where there is
a change in the contractual relationship
between existing partners, a firm will be
reconstituted.
Assessment: Teacher Assessment
• Involvement in discussions
• Previous knowledge
• Answering lead questions
• Content awareness
Skills
• Communication
• Comprehension
• Analysis
• Leadership
Suggested Strategy: Brain storming
Admission of a partner • Identify the account-
• Brainstorm the possible reasons for
ing adjustments to be
admitting a new partner by citing
made in the books of
examples.
• Emphasis on the rights acquired by the the firm when a new
new partner. partner is admitted.
• Reflect on the question 'What all
adjustments needed in the account books
of a firm on admission of a new partner?'
• All responses are listed in the black board.
• Helps them to arrive at correct responses
through discussion.
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Assessment: Self Assessment
• Sharing of useful ideas
• Correctness of responses
Skills
• Self-awareness
• Evaluation
• Inference
• Comparison
Suggested Strategy: Case Study
New profit sharing ra- • Suitable cases involving different situation • Determine the new
tio and Sacrificing ratio. of acquiring profits by the new partner profit sharing ratio
from the existing partners may be and calculate the sac-
illustrated in the class. rificing ratio.
• Helps students to calculate the new ratio
and sacrificing ratio in each situation.
• Relevant formula may be introduced at
each stage for performing calculations.
• Assignment for reinforcement may be
given.
• Analysis of cases
• Use of appropriate formula
• Correctness of calculations
• Timely completion
Skills
• Analysis and Interpretation
• Mathematical calculations
• Problem solving
• Time management
Goodwill: Suggested Strategy: Group Discussion • Describe goodwill
• Meaning • Introduce the concept of goodwill through and enumerate the
• Factors affecting suitable examples. factors affecting it.
good will • Groups are formed to discuss the various • Explain the methods
factors affecting goodwill of a business.
• Methods of valua of valuation of good-
• Explains steps in calculating goodwill
tion will.
under different methods.
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• Illustrations covering all relevant
information may be provided to each
group.
• Groups are asked to calculate the amount
of goodwill under a specific method.
• On presentation, each group explains the
procedure for calculating goodwill as per
the method allotted to them.
• Home assignments may be given to
practice calculation of goodwill under
different methods.
Assessment: Peer Assessment
• Identifications of factors
• Discussion in groups
• Presentation
• Calculation of goodwill
Skills
• Team spirit
• Creative thinking
• Problem solving
• Leadership
Suggested Strategy: General

Treatment of goodwill • Describe how good-
Discussion
• Initiates discussion by recalling the need will is treated under
for calculating goodwill on admission of a different situations
partner. when a new partner
• Suitable examples may be cited to discuss is admitted.
the treatment of goodwill under different
situations.
• Helps to develop journal entries based on
the given situation.
• Exercise questions may be given in groups
for practice
• Passing journal entries
• Performing calculations
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Skills
• Journalizing
• Problem solving
• Interaction
• Effective communication
Revaluation of assets Suggested Strategy: Case Study • Apply the rules of
and reassessment of li- • Suitable cases for revaluation of assets accounting for re-
abilities. and liabilities are illustrated. valuation of assets
• Helps to journalize the increase or and reassessment of
decrease in assets and liabilities. liabilities.
• Asks to post them by opening a new
ledger called 'Revaluation account'.
• Motivates the students to find out the
ledger balance to ascertain the profit or
loss resulting from revaluation.
• Exercise questions provided for practice.
• Preparation of ledger
• Calculation of profit/loss
Skills
• Journalizing and posting
• Analysis
• Problem solving
Past profits and losses • Identify the need for
• Illustrations comprising of adjustments
and Capital adjustments distribution of past
regarding reserves, accumulated profits/
profits and losses.
losses, and adjustment of capitals with
new ratio are discussed in the class. • Determine the capi-
• Discuss the impact of the above items in tal of each partner
the relevant accounts and the new according to the new
Balance Sheet, on the basis of a case profit sharing ratio by
study. making necessary
• Helps to pass necessary journal entries adjustments.
for these adjustments.
• More illustrations may be given for
practice.
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Ideas with assessment outcome
• Preparation of ledgers
• Tallying Balance Sheet
• Observing double entry.
Skills
• Problem solving
• Analysis
• Journalizing and posting
Change in profit shar- Suggested Strategy: • Illustrate the adjust-
ing ratio among existing General Discussion ments required on
partners • Discussion initiated by recalling the changes in the profit
accounting adjustments on admission of sharing ratio among
a partner. the existing partners.
• Lead questions are asked to identify the
changes in the accounting treatment.
• The effect of changes in accounts as a
result of change in profit sharing ratio are
discussed with suitable illustrations.
• Concludes by comparing both the
situations-admission of a new partner and
change in profit sharing ratio of existing
partners.
• Participation in discussions
• Performing calculation
Skills
• Problem solving
• Interaction
• Journalizing
• Comparison
• Inference
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Treatmet of Goodwill in compliance to As 10

In the text book prescribed for commerce, treatment of Goodwill is done
ie the following manner.
a. Raising of goodwill and written off such goodwill immediately.
b. Goodwill adjusted only to the extend of new partner’s share or out
going partner’s share.
However it is advisable to follow revised As 10 in which latter treatment
ie (b) of the above is preferred.
Preparation of Final accounts:
Suggested Strategy: Anecdote analysis
Anil and Arun are in partnership business now thinking on expansion of their
business for which purpose a sum of Rs.10,00,000 is needed initially. Mr.
Thomas, a friend of them, has accepted their demand of becoming a partner.
After making changes required in the partnership deed, he brought in:
• Rs.10,00,000 as his capital for a third share and
• Rs.1,00,000 towards the right given to him for sharing future profits
(Teacher’s intervention will be useful to clarify the sum to be paid as a part of
goodwill adjustment)
A few more conditions are added to the above by Anil and Arun.
• All assets and liabilities to be revalued as book figure is not relevant.
For example the book value of land is Rs.1,00,000. But if sold, the same
could fetch Rs.1,50,000. Similarly the value of stock as per book value
is Rs.28,000 but its actual value is only Rs.20,000
[Teacher's intervention will help the students to realize the need for
ascertaining the revaluation profit and sharing them by the old partners]
• The firm has kept past profits of Rs.30,000 as general reserve. [Here
also brief explanation on the need for distribution among the old
partners may be given]
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• Other particulars:
Existing Balance
Anil’s Capital 50000
Arun’s Capital 30000
Bank Loan 50000
Creditors 20000
Cash 2000
Stock 28000
Debtors 20000
After the story being wholly discussed and analysed, the following conclusions
must be arrived at. Teacher's job is only to help them think in terms of:
• Distribution of past profits
• How revaluation of profit can be calculated and shared
• The present capital account balances of the partners
• Changes that has affected valuation of assets including cash balance
• Equating the assets and liabilities.
Teacher Assessment
Conceptual Clarity on Student Responses
a. Increase in the asset will be.................in
revaluation account
b. Journal entry for accumulated profits in the
Balance Sheet
c. Whenever a new partner is admitted, what are the
adjustments to be done in the books of
accounts of the firm?
90
Unit
Assessment
1. General Discussion on • Notes on meaning and concepts
meaning of reconstitution of of reconstitution of partnership
partnership firm firm
• List of cases lead to reconstitution
of firm.
2. Brainstorming on accounting • List of correct responses
adjustments for admission of • Diagram showing the accounting
a partner adjustments.
• Self-assessment format
3. Case study on calculating new • Case Study
profit sharing ratio and • Calculations to find out new
Sacrificing ratio profit sharing ratio and sacrificing
ratio.
• Assignments of solved problems.
4. Group discussion on meaning, • Notes on meaning of goodwill and
factors affecting and methods factors affecting it.
for valuation of goodwill. • List of steps involved in
calculating goodwill under
Unit test
different methods.
• Questions and solutions
5. General discussion on • Notes on accounting treatment of
treatment of goodwill at the goodwill under different
time of admission of a situations.
partner. • Solved exercises.
6. Case Study on revaluation of • Case study

assets and reassessment of • List of journal entries
liabilities. • Format of revaluation a/c.
• Solved problems.
7. Case study on past profits and • Case study
losses and capital • Journal entries
adjustments. • Assigned problems and solutions.
8. General discussion on Change • Discussion report

in profit sharing ratio among • List of adjustments
existing partners. • Solved questions
91
TE Questions
1. Anils and Abey are partners who admit Neha into the firm for a third
share. Find out the new profit sharing ratio and ratio of sacrifice between
Anil and Abey?
2. In continuation of the above question suppose, Neha brings Rs.9, 000
towards goodwill how it shall be recored in the accounts. Give a Journal
entry
3. Mohan and Sohan are partners who take Pawan as a partner into the
firm. The following further information is given to you.
Capital account balances:
Mohan Rs.30, 000
Sohan Rs.20, 000
General Reserve Rs.20, 000
Profit sharing ratio between Mohan and Sohan - 3:2
Profit and loss account (Dr) balance Rs.16, 000
The new partner brings Rs.40, 000 for 1/6th share of future profits
towards the capital account and Rs.6, 000 towards the share of goodwill.
Show the capital accounts of the partners.
92
Unit
4 Retirement and Death
Introduction
It is quite natural that partners may leave the firm due to many reasons.
It may be due to their dissatisfaction, or the terms of partnership deed
and the like. Retirement of a partner necessitates redrafting of the
original agreement and hence it is one of the circumstances for
reconstitution. Through this chapter the student acquires knowledge
and skill for finalization of accounts relating to retirement and also
construct a Balance Sheet immediately after retirement
Values and attitude
Promptness and transparency must be reflected through out the
settlement of accounts of a partner leaving the organisation.

New ratio and gaining Suggested Strategy: General The student will be able
ratio on retirement/ Discussion to:-
death of a partner • Initiates discussion by citing the example • Ascertain the new
on retirement of a partner from a firm. profit sharing ratio
• Distinguish between death and retirement and gaining ratio of
in accounting point of view. the remaining part-
• Accounting adjustments are discussed by ners after the retire-
comparing with that of admission of ment/ death of a
partner. partner
• Helps to ascertain the new ratio and
gaining ratio by recalling the relevant
formula.
• Examples may be provided to deal with
different situation of sharing the gains by
remaining partners.
• Identification of situations
Skills
• Communication
• Comparison
• Differentiation
• Comprehension
Treatment of: Suggested Strategy: Case study • Make the accounting
• Goodwill • Suitable cases involving adjustment of treatment of goodwill
• Accumulated prof- goodwill, reserves, accumulated profits, on retirement of a
its and losses and undistributed losses on retirement or partner.
death of a partner given. • Explain the need for
• Lead questions asked for analyzing the adjustment of accu-
case to pass journal entries for required mulated profits and
adjustments. losses.
• Helps to compare with adjustments of
these items on admission.
• Additional problems given as home work
for practice.
Assessment: Self assessment
• Identification of adjustments
• Treatment in leader accounts
• Treatment in leadger accounts
• Answering questions
Skills
• Analysis
• Self-awareness
• Journalizing
• Problem solving
94

Settlement of accounts Suggested Strategy: General • Calculate the retiring
Discussion /deceased partner's
• Initiates discussion by recalling the various claim against the firm
adjustments on death or retirement of a and settlement of ac-
partner. counts.
• Relevant questions may be asked to
discuss the adjustments needed in the
capital account of a retired or deceased
partner.
• Different ways of settlements of amount
due to retiring or deceased partner may
be discussed by citing suitable examples.
• Help to pass journal entries and
corresponding entries in the capital
accounts.
• Sharing of useful ideas.
• Preparation capital accounts.
• Ascertaining due amount.
Skills
• Journalizing
• Problem solving
Retiring partner's loan Suggested Strategy: Case Study • Prepare the retiring
a/c and Deceased • Explain the case of paying the amount due partner's loan ac-
partner's Executors to retiring partner in yearly installments count.
a/c with specific rate of interest. • Prepare the de-
• Helps them to analyze the case to prepare ceased partner's
the loan a/c. executers account in
• Suitable case of transferring the amount case of death of a
due to a deceased partner to his executors partner.
account also discussed in detail.
• Additional problems assigned for practice.
• Analyzing cases
• Preparation of ledgers
Skills
• Problem solving
• Computational
• Analytical
• Timeliness
95

Balance Sheet of re- Suggested Strategy: Group Discussion • Construct the recon-
constituted firm • Form suitable groups for problem solving. stituted Balance
• Each group may be assigned with an Sheet.
illustration from text book and ask them
to solve it.
• Motivate the students to prepare
necessary ledger accounts and Balance
sheet.
• Teacher interaction in groups helps to
clarify the doubts in group discussions.
• On presenting solutions with the help of
black board, students are required to give
brief explanation of treatment of different
items.
Assessment: Peer Assessment
• Presentation of solutions
• Clarifications
• Timely completion
Skills
• Interaction
• Presentation
• Team work
• Problem solving
Gaining ratio:
Suggested strategy: General Discussion
Teacher may pose suitable questions to enable the students to recollect what
they have learned.
• When a new partner is admitted what will happen to profit sharing
ratio of old partners?
• Suppose 'A' and 'B' who are equal partners decided to admit 'C' for
1 3 rd share. Do the old partners make any sacrifice here? What is
sacrificing ratio?
• How can it be calculated?
•
•
•
A general discussion can be continued on the following
• Meaning of retirement
sharing ratio
• Increase in profit sharing ratio of the remaining partners post retirement
• Ratios to be computed at the time of admission/retirement.
96
Activity:
The following case is given:
A , B and C are partners sharing profit in the ratio of 3:2:1. B retired by illness.
• What is the old ratio?
• In the absence of B what is the ratio of A and C?
• Differentiate between new ratio and old ratio
The above case can now be stretched a little bit more.
Suppose 'A' and 'C' decided to share the future profits equally, what will be
the gaining ratio?
• What will be the new ratio?
On consolidation, the equation "Gaining Ratio = New Ratio - Old Ratio" can be
explained and also different ways of calculating new ratio and gaining ratio.
Self Assessment
Conceptual Clarity on Student Responses
1. Gaining ratio is calculated at the time of
retirement or death
2. Gaining ratio is the difference between old
ratio and new ratio
3. Amount of goodwill payable to the retiring
partner is shared by remaining partners in
their gaining ratio
4. The formula for calculating gaining ratio is
Gaining ratio = New ratio - Old Ratio
Unit
Assessment
1. General discussion on • Table showing differences
calculating new ratio and between retirement and death
gaining ratio on retirement/ on accounting point of view
death of a partner • Calculation of new ratio and
gaining ratio
2. Case Study on Treatment of • Assigned problems with
Unit test
Goodwill and Accumulated solutions.

profits and losses • Case study
• Notes on treatment of goodwill
and accumulated profits/
losses
3. General discussion on settlement • Solved problems
of accounts at the time of • Journal entries
retirement/death • Capital account
• Solutions of exercises
97
Unit
Assessment
4. Case study to prepare Retiring • Discussion reports
partner's loan a/c and Deceased • Case study
Unit test
partner's Executors a/c • Format of accounts
5. Group discussion on • Solved questions
preparation of Balance Sheet of • Discussion reports
reconstituted firm • Prepared Balance Sheet
• Assigned problems and
solutions
TE Questions
1. Murali, Ranjith and Rejith are partners who share profits in the share of 3:2:1.
Murali retires on 31/3/2015. The goodwill of the firm is valued at 3 years
purchase of average profits of 5 years. The average profit of the firm is Rs.15,
000. The ledger account reveals the following.
Capital account balances:
Murali Rs. 40,000
Renjith Rs.30,000
Rejith Rs. 20,000
Profit and loss account credit balance Rs.18,000. Find out the amount due to
Murali on his retirement.
2. Sheeja, Sreekala and Anu are partners sharing profits in the ratio of 5:3:2.
Sreekala retires on 31/03/2015 . On this date, the ledger account contains the
following capital account balances:
Particulars Amt.(Rs)
Sheeja 40000
Sreekala 30000
Anu 20000
General Reserve 60000
Creditors 50000
Bills Receivable 30000
Cash 20000
Debtors 40000
Furniture 50000
Building 60000
On this date the assets and liabilities were revalued as follows:
Building Rs.90,000
Furniture Rs.45,000
Out of debtors 10% are to be kept for provision for bad debts.
Creditors of Rs.10,000 is settled using an unrecorded asset which was worth
Rs. 8, 000.
Bills receivable of Rs.8,000 is dishonoured and 50% of which is realizable
and the balance has to be written off
Prepare the necessary accounts and the Balance Sheet of the new firm`
98
Unit
5 Dissolution of Partnership Firm
Introduction
Dissolving a firm means closing down of a business firm. Once the firm
has been decided to dissolve, then all assets are to be sold and liabilities
to be paid off. In this chapter, we learn how these can be carried out
and accounts for winding up can be done showing the realization of
assets and repayment of liabilities.
Values and attitude
A business firm started in the past may discontinue its operations
subsequently. Settlement of dues to various parties, priority of
settlement and mode of settlement requires complaince with norms
accepted universally.

Dissolution of partner- Suggested Strategy: General The student will be able
ship firm: meaning or Discussion to:-
concept. • Initiates discussion by citing the example • State the meaning
of closure of a partnership firm due to and concept of disso-
Consistent losses. lution of partnership
• Lead questions asked to discuss how it firm.
affects the relationship between partners
and the books of accounts.
• Emphasis should be given on how the
amount realized from assets be utilized for
paying off the debts of firm.
• Concludes by stating that dissolution of
firm is the dissolution of partnership
among all partners of the firm.
• Identifying the order of repayment of
debts
• Contribution of useful ideas.
Skills
• Communication
• Comprehension
• Interaction
• Orderly arrangement
Differences between Suggested Strategy: Group Discussion • Distinguish between
dissolution of firm and • After recalling the meaning of dissolution of part-
dissolution of partner- Reconstitution of firm and Dissolution of nership and dissolu-
ship. firm, convenient groups are formed for tion of partnership
class room discussion. firm.
• Groups are asked to find out the difference
between the two.
• Teacher interaction in groups helps to
clarify the doubts and provide them hints
for discussion.
• Each group presents the points of
difference.
• Teacher concludes by stating additional
points not discussed by groups.
Assessment: Peer assessment
• Identification of Differences
100

• Presentation skills
• Team work
Skills
• Team spirit
• Data collection
• Differentiation
Methods of dissolution. Suggested Strategy: General • Explain different
Discussion modes of dissolution
• Initiates discussion by recalling the of the partnership
concept of dissolution of firm. firm.
• Different modes of dissolution are
discussed by narrating examples.
• Students are motivated to cite similar
examples.
• Concludes by preparing a diagram to
show different modes of dissolution.
• Illustrating examples
• Drawing diagram
Skills
• Interaction
• Communication
• Comparison
• Analysis
Realisation Account Suggested Strategy: Case Study • Prepare the reali
• Explains case involving sale of assets and sation account.
paying off debts consequent to dissolution
of a firm.
• Analyze the case by asking lead
questions.
• Helps to pass concerned journal entries.
• Also help them to prepare Realisation a/c
by posting these entries
• Ascertain profit/loss on realisation by
balancing the account and transfer it to
partners' capital accounts.
101

• Analyzing the case
• Preparation of realization a/c
Skills
• Problem solving
• Journalizing
• Posting
• Analysis
Close the books of ac- Suggested Strategy: General • Pass journal entries
counts of the firm. Discussion and prepare neces-
• Discussion initiated by recalling the journal sary ledger accounts
entries on realization of assets and paying to close the books of
off debts on dissolution of a firm. the firm.
• Helps to pass journal entries on other
adjustments on dissolution like paying off
loan from partners/Spouse of partners,
Reserves, accumulated losses etc., using
lead questions.
• Helps to prepare necessary ledger
accounts like Capital accounts, Cash/Bank
account etc. to close books of the firm.
Assessment: Self Assessment
• Recalling journal entries
• Preparation of ledger accounts.
Skills
• Interaction
• Communication
• Journalizing
• Problem solving
• Self awareness.
102
Preparation of Realisation Account:

Presents the following case before the students
Abhi and Khan are partners of a firm. Their Balance Sheet as on 31-3-2015 is
given below.
Balance sheet as on 31-3-2015
Liability Amount Assets Amount
Creditors 3,000 Cash in hand 1,000
Bank Over Draft 2,000 Cash at Bank 5,000
Capital: Debtors 10,000
Abhi 18,000 Stock 7,000
Khan 15,000 31,000 Land 8,000
Furniture 5,000
36,000 36,000
Discussion points:
1. What are the assets need to be sold?
2. Should cash and bank balance be sold? Why?
3. Which liabilities are paid first?
•
•
•
Teacher may add that all assets except cash and bank balance are to
be realized and all outside liabilities are paid first before anything
is paid towards capital a/c.
The assets are sold and liabilities are repaid as follows
This may be given as an activity. Let them calculate the profit or loss on account
of realization by themselves.
Activity table
Name of assets/ Book value Realisable value/ Profit Loss
Liabilities Repayable value
Debtors 10,000 9,800
Stock 7,000 8,000
Land 8,000 13,000
Furniture 5,000 4,000
Creditors 3,000 2,900
Bank Over Draft 2,000 2,000
103
After filling the table teacher asks about the net results of transactions. Then it
can be presented in an account form .This account prepared for ascertaining
profit or loss on realization is called realization account
Realization account A/C
Particulars Amount Particulars Amount
Debtors 10,000 Creditors 3,000
Stock 7,000 Bank Over Draft 2,900
Land 8,000 Cash :
Furniture 5,000 Debtors 9,800
Cash : Stock 8,000
Creditors 2,900 Land 13,000
Bank over draft 2,000 4,900 Furniture 4,000 34,800
Capital A/c
Abhi 2,900
Khan 2,900 5,800
40,700 40,700
Discussion points:
Sufficient clues may be given for drawing the realization account
When a firm is decided to dissolve, all assets except cash and bank balances
are realized and all external liabilities are paid off. To find the net results of
realization and repayment an account is prepared called Realization account.
All assets except cash and bank balance are transferred to debit side of
Realization account and all external liabilities are transferred to credit side of
realization account.
Any expense relating to realization process is transferred to realization account.
The net result which can be either profit or loss is shared by partners.
Teacher Assessment
Attributes Student Responses
1. Identify the item shown on the debit side of
realization account
2. Identify the items shown on the credit side of
realization account
3. Identify the side to enter the realizable
value of assets
4. Identify the side to enter the amount of
liability paid.
5. Journal entry for Sharing profit or loss
104
Unit
Assessment
1. General discussion on meaning • Discussion report
or concept of dissolution in • Notes on dissolution of
partnership firm. partnership firm.
2. Group discussion on difference • Table showing differences
between dissolution of firm and • Discussion report of groups
dissolution of partnership.
3. General discussion on methods • Discussion reports
Unit test
of dissolution. • Notes on modes of dissolution
4. Case study on preparation of • Case study
realization a/c • Format of realization a/c
• Solved questions
5. General discussion on closing • Discussion reports
the books of accounts of the firm • Prepared ledgers
• Prepared Balance Sheet
• Assigned problems and
solutions
TE Questions
1. Dissolution of a firm is
a. Closing down of a firm
b. Reconstitution of a firm
c. Change in agreement
d. Retirement of a partner
2. Given:
Balance Sheet of AJ and Company as on 31/03/2015
Creditors 7000 Cash 3000
General Reserve 30000 Debtors 8000
Capital Stock 19000
Anil 30000 Fixed Assets 70000
Arun 33000
100000 100000
The firm is to dissolved on 31/03/2015
105
Assets realized as follows:

1. Debtors were to be taken over by creditors
2. Fixed assets are sold at 10% more than the book value
3. Stock is taken over by Arun
4. Computer worth Rs.6,000 is sold for Rs.5,000
Prepare the accounts relating to dissolution.
106
Unit
Analysis of Financial Statements
1 Accounting for Share Capital
Introduction
Company form of business is distinct from other types of business
organizations. It is a creation of law. Therefore, its working is to
conform to the provisions of company law. In this chapter we learn the
basic concepts on company form of business and the accounting
procedure for rising of share capital which is done through issue of
shares.
Values and Attitudes
The money collected fractionwise is the hard earned savings of the
people; hence it has to be channalised into the high yielding projects.
Analysis of Financial Statements Teacher Text

Companies Suggested strategy : General The student will be able
Features Discussion to:-
Kinds of share capi • Discussion on different forms of business
tal organisations of following on compancy • Explain the basic na-
form of organisation. ture of a joint stock
• List out the special features of companies companies
based on the above discussion • Identify various types
• Reflective questions are given to identify of companies
the classification of companies on the basis • Distinguish between
of liability of members and number of equity shares and
members. preference shares.
• Cite suitable examples of public and
private companies.
• Focus on the minimum paid up capital
requirment for both private and public
companies.
• Help students to distinguish equity shares
from preference shares by using their
previous knowledge.
Assessment : Teacher assessment
• Ability to recall definition
• Listing of features
Skills
• Communication
• Comparison
• Distinguishing
• Categorizing
Share capital and its Suggested strategy : Case Study • Recognise different
categories • Explain an imaginary case of share issue categories of share
by specifying the amount of different capital and its treat-
categories of share capital ment in books.
• Lead questions are asked to identify each
category.
• Help students to prepare a chart showing
categories of share capital.
• Guide students to prepare a Balance sheet
and show entries of the cited example.
• Motivate them to practice in groups, how
different categories of share capital shown
108

in Balance Sheet, by considering similar
examples.
• Preparation of charts
• Showing items in Balance sheet
Skills
• Analytical
• Problem solving
• Categorizing
• Orderly arrangement
Procedures for issue of Suggested strategy : General discussion • Describe important
share • Lead questions are asked to discuss the steps in the share is-
sequential steps in the process of share sue process.
issue.
• Emphasize on the concept of minimum
subscription.
• Present a flow chart showing all steps
involve in share issue
• Conclude by stating the actual issue
practices.
• Contributing useful ideas
• Sequential arrangements
Skills
• Communication
• Sequential ordering
• Analysis
• Practical approach
Accounting treatment Suggested strategy : General • Pass journal entries
of share issue discussion of share capital
• Recall the steps in issue of shares transactions
• The inflows of cash and effect in share
capital are discussed at each stage of
share issue to understand the debit and
credit aspects.
• Suitable examples of share issue may be
cited for passing journal entries.
109

• Familiarize the practice of using combined
account for share application and
allotment.
• Exercise question in the text book may
be given in groups as assignments.
• Recalling steps
• Observing rules of debit and credit
• Completion of assignments
Skills
• Team work
• Problem solving
• Journalizing
• Analysis
Calls in arrears and Suggested strategy : Case Study • Explain the account-
calls in advance • Illustrate suitable cases involving calls in ing treatment of calls
advance and calls in arrears. in arrears and calls in
• Helps them to pass journal entries for the advance.
events.
• Helps them to compute interest on calls
in arrears and calls in advance
• Lead questions asked about inclusion of
these items in the Balance Sheet of a
company.
• Concludes by specifying the respective
rate of interest and its treatment.
Assessment : Self assessment
• Case analysis
• Journal entries
• Balance Sheet treatment
Skills
• Problem solving
• Analysis
• Self-awareness
• Inference
Oversubscription and Suggested strategy : Case Study • Outline the account-
Under subscription • Illustrate with suitable examples the case ing treatment of over
of oversubscription in public issue. subscription and un-
der subscription.
110

• Analyze the case to pass necessary
journal entries
• Help them to discuss alternative methods
to deal with oversubscription
• Emphasis to be given for pro-rata
allotment.
• Also illustrate one under subscription
situation and its accounting implications
• Case analysis
• Passing Journal entries
• Interactions
Skills
• Analysis
• Problem solving
• Journalizing
• Comparison
Issue of shares at pre- Suggested strategy : General discussion • Pass journal entries
mium and discount • Recall the accounting treatment of shares for shares issued at
issued at par. a premium and at a
• Lead questions asked to compare the discount.
situation with issue at premium and
discount
• Discuss the changes needed in the
accounting treatment
• Emphasis given on the purposes to utilize
the securities premium and conditions for
issue of shares at premium.
• On similar lines discount on issue of shares
should also be discussed
• Concludes by stating how related items
are shown in the Balance Sheet.
• Recalling journal entries
Skills
• Comparison
• Decision-making
• Communication
• Interpersonal
111

Issue of shares for con- Suggested strategy : Case Study • Explain the account-
sideration other than • Illustrate with examples of issue of shares ing treatment of
cash. to vendors, from whom company acquired shares issued for
asset on credit. consideration other
• Lead questions asked to analyze the than cash.
situation and record them in journal.
• Similar cases are illustrated to practice
different situations like issue at premium
or discount.
• Journalizing
Skills
• Analysis
• Problem solving
• Arithmetical calculations
• Self- awareness
Forfeiture and re-issue Suggested strategy : Case study and • Pass journal entries
of shares Group discussion on forfeiture and re-
• Illustrates a case of forfeiture and re-issue issue of shares.
of shares.
• Help them to analyses the case for
recording necessary journal entries.
• Groups are formed and each group is
allotted with a specific situation for
journalizing, such as issue at par, premium,
discount, oversubscription, under
subscription, making calls, meeting calls
and failing to meet calls etc.
• On presentation of the journal entries by
each group, clarify the doubts raised by
students.
• On conclusion, emphasis on showing
relevant items in the Balance Sheet.
Assessment :
• Peer assessment
• Preparation of journal
• Involvement of members
Skills
• Team work
• Problem solving
• Decision making.
112
Accounting for share capital transaction:

RJ Ltd., wants to raise a capital of Rs.10, 00,000 for funding its expansion plans.
The company intends to collect the funds through issue of shares. Each share
has a face value of Rs.10/- . It has fractioned its face value as Rs.2, Rs.3, Rs.2
and Rs.3 respectively and decided to raise these sums in such installments.
The company took 6 months to collect the entire sum. However 1,20,000
applications were received. The excess applications were rejected and the
application money has been refunded altogether.
The teacher after giving the above case gives a brief explanation about these
fractional elements and convince them that each of these factions form part of
share capital.
In this context an activity table like the one as you see below may be prepared
and the students may be asked to draft the journal entries.
Excess
No. of share No. of shares Name of What it
Installment Application Amount
applied for alloted installment becomes
money
Rs.2 1,20,000 1,00,000 20,000 ? Share Share
Application capital
Rs.3 1,00,000 1,00,000 3,00,000 ? ?
Rs.2 1,00,000 1,00,000 ? Share
First call ?
Rs.3 1,00,000 1,00,000 3,00,000 ? ?
After the table being developed with some help from the teacher, he asks:
• Who applies for shares?
• Can they apply for it without payment of application money?
• The rule of accounting when money comes in on application for shares
and also the reason for crediting the share application money?
• The rules of debit and credit may be further discussed for allotment
and calls also.
The above can be consolidated by illustrating the journal entries applicable in
each of the above stages.
Assessment
No of correct Students
Questions
answers requires help
a. Entry to be passed at the time of
transfer of application money to
share capital a/c
b. Entry to be passed for allotment
money due
113
Unit
Assessment
• General discussion on meaning, • A list containing the features
features, types of companies and of the company
classes of shares
• Case Study on share capital and • Chart showing different
its categories categories of share capital
• General discussion on • Notes on share issue
Proceedure of share issue proceedures
• General discussion on the • Notes showing journal entries
accounting treatment of share at different stages
issue
• Case study on Calls in arreas • Journal entries on calls in
Unit test
and calls in advance arrears and calls in advance
• Case analysis on over • Report on oversubscription
subscription and under and undersubscription
subscription
• Group discussion on issue of • Journal entries at the time of
shares at premium and at a issue of shares at premium and
discount at a discount
• Report
• Case study on issue of shares for on accounting
consideration for other than cash treatment at the time of issue
of shares other than cash and
its accounting treatment
• Case study and group discussion • Relevant journal entries at the
on forfeiture and reissue of time of forfeiture and reissue
shares of shares
TE Questions
1. The amount unpaid on a share despite the call is made is referred to?
2. 100 shares of a company is forfeited for non-payment of Rs.7/- per share. If
the called up value is Rs.10, how much shall the company credit to the share
forfeited account?
3. A company has received Rs.50,000 being calls in advance along with allotment
money receipt. Give a journal entry to the above? Assume allotment money of
Rs. 2,50,000 has been received.
4. A company issued 1000 shares of Rs.10 each payable as to Rs.2 on application,
Rs.5 on allotment which includes share premium also. The final call being
Rs.7/- per share.
Give journal entries to record the above transactions assuming that one share
holder of 100 shares did not pay the last call and his shares have been forfeited?
114
Unit
2 Issue and Redemption of

Debentures
Introduction
Debenture is the most popular form of credit instruments. The investors
have no fear in investment of debentures for the reason that returns
are steady and regular. Besides they are wholly covered by a fixed or
floating charge over the assets of the company. Similarly they are
entitled to their interest claim and capital repayment prior to the
settlement of equity share holders.
Let us learn here the procedure to be followed while recording
transaction relating to issue of debentures and its redemption.
Value and Attitudes
Debenture being an alternate form of raising capital is carrying certain
peculiar characteristics of unconditional interest payment and priority
over capital repayment, demands for specialised accounting treatment.

Debentures Suggested strategy : General The student will be able
• Distinction between Discussion to:-
shares and deben • Initiate discussion by recalling the meaning • Explain different
tures and features of debentures types of debentures
• Guide them to distinguish shares from • Distinguish between
debentures by specifying the bases of shares from deben-
distinction. tures
• Lead questions are asked to identify
different types of debentures issued by a
company.
• Help them to draw a chart showing the
types of debentures.
1. Ability to recall
2. Involvement in discussions
3. Ability to distinguish, based on hints
4. Table showing distinction
Skills
• Interaction
• Distinction
• Communication
Issue of debentures Suggested strategy : Group Discussion • Record journal en-
• At par • Recalling the journal entries passed at the tries for issue of de-
• At discount time of issue of shares bentures at par, at
• At premium • Compare this with that of debentures and premium and at dis-
• Oversubscription help the students to identify the difference. count.
• Under subscription • Give different cases in groups on the topic, • Journalize debenture
• For consideration for journalizing. transactions in case
other than cash Assessment : Peer assessment of over subscription
• Discussion in groups and under subscrip-
• Presentation skills tion.
• Journal entries prepared • Explain the concept
Skills of debentures issued
• Problem solving for consideration
• Analysis other than cash.
• Decision making
• Team-spirit
Issue of debentures as Suggested strategy : Case Study • Explain accounting
collateral security • Illustrates with examples of debentures treatment of deben-
issued to lenders as additional security tures issued as col-
• Helps them to analyses the case with the lateral security.
help of questions.
116

• Describe the alternative methods of
treatment in the company books.
• Helps to pass necessary journal entries
and to show relevant items in the Balance
Sheet.
• Analysis of the case
• Preparation of journals
• Awareness on alternative methods
Skills
• Evaluation
• Comparison
• Problem solving
• Decision making
Terms of issue of de- Suggested strategy : Group Discussion • Pass journal entries
bentures • Initiates discussion by recalling journal in six different situa-
entries of debentures issued under tions upon which is-
different situations. sue and redemption
• Different situations of issue and of debentures take
redemption is given in groups place.
• Helps to prepare journal entries for various
situations.
• Interaction with groups to clarify the
doubts and to draft correct journal entries.
• Each group presents journal entries and
clarify doubts raised by students.
• After presentation by all groups an
illustration with all possible situations may
be given in groups to pass journal entries.
Assessment : Peer assessment
• Interaction in groups
• Presentation of groups
• Doubts clearing
Skills
• Team work
• Problem solving
• Interaction
117

Interest on debentures Suggested strategy: General discussion • Explain the account-
Writing off • Discussion initiated by recalling the return ing treatment of inter-
discount/ loss on creditorship securities. est on debentures
on issue of deben • Lead questions are asked to discuss the • Pass journal entries
tures accounting treatment of interest on for writing off dis-
debentures. count/loss on issue of
• Explain the situations of loss on issue of debentures.
debentures.
• Helps to pass journal entries to write off
the discount/loss on issue of debentures.
Skills
• Communication
• Interaction
• Problem solving
• Journalising
Suggested strategy : Case Study
Methods for redemp- • Suitable cases are illustrated to explain • Describe the ac-
tion of debentures each situation counting treatment
• Payment in lump- • Questions are asked to analyze the under different meth-
sum specialties of each method ods used for redemp-
• Payment in install • Helps to pass journal entries in each case. tion of debentures.
ments • Additional illustrations may be given as
• Purchase in open group assignments.
market Assessment : Teacher assessment
• Redemption by con • Analysis of the case
version • Answering lead questions
• Sinking fund • Passing journal entries
• Correctness of problem solving
Skills
• Problem solving
• Decision making
• Communication
• Critical thinking
118
Issue of debentures from redemption point of view:

YB Ltd issued 1000 debentures at a discount of 10% against the face value of
Rs. 100 per debenture with a condition that the same shall be redeemed at 10%
premium after 5 years
Discussion points:
• Can you state the discount on issue allowed for the above transaction?
• How much has to be credited to debenture account at the time of issue?
• How much is the liability at the time of redemption?
What is the treatment of discount of issue and premium on redemption of

debentures?
The two elements of liabilities are elicited into liability towards debenture
account and liability on account of premium payable on redemption.
After the above discussion they are initiated to pass the journal entry on issue
Now the teacher can give further similar discussion points to lead them. Pass
the next journal entry relating to redemption.
Assessment
No. of students Students who
Questions
got clarity of concept need help
a. Journal entry on issue
b. Journal entry on redemption
Unit
Assessment
• General discussion on meaning • Table showing distinction
of debentures and distinction between shares and
between shares and debentures debentures
Unit test
• Group discussion on different • Prepared Journal entries

terms and types of issue of
debentures
• Case study on issue of • Notes on issue of debe
debentures as collateral security ntures as collateral security
and connected journal entry
119
Unit
Assessment
• Group discussion on the terms • Recorded journal entries at
of issue of debentures different stages
• General discussion on interest on • Journal entries for treatment
Unit test
debentures of interest on debentures and
adjustment entries for
discount or loss on debentures
• Case analysis methods for • Prepared journal entries for
redemption of debentures issue and redemption of
debentures
TE Questions
1. What do you mean by debentures? Explain its merits over equity shares from
the investor's point of view?
2. Draw a chart to represent the various types of debentures?
3. A company has issued 1000 debentures of Rs.100 each repayable after 5 years
with a premium on redemption @10% on each debenture?
Give journal entries from redemption point of view?
120
Unit
3 Financial Statements of a
Company
Introduction
The ultimate aim of the accounting process is to reveal the trading
results and the financial position of a business organization. In
company form of business it is all the most important and also a legal
necessity. The preparation of these statements requires knowledge of
the companies Act relating to drafting of financial statements under
schedule VI of theAct.
Peculiar features of the company form of organisations demand for
presently the financial statements as per formats prescribed by the
statutes.

Financial Statements: Suggested strategy : General The student will be able
• Meaning Discussion to:-
• Nature • Recall financial statements of a sole • Explain the meaning,
• Objectives proprietorship concerns like Profit and nature and objectives
Loss a/c and Balance Sheet. of financial state-
• Discussion to elicit the meaning, nature ments
and objectives of Financial Statements.
• Familiarize the terms like conventions,
postulates etc.
• Emphasis the role of financial statements
in decision making to internal and external
users.
• Ability to recall
Skills
• Interaction
• Initiative
• Communication
• Inference
Form and content of Suggested strategy : Group discussion • State the contents of
Balance Sheet of com- • Copies of the format of Balance Sheets Balance Sheet of
panies before and after revision of the Schedule companies as per
VI of the Companies Act is given for Revised Schedule
comparison VI, Part I.
• Basis of comparison of Horizontal and
Vertical formats of Balance sheet are
provided
• Emphasis on the features of Revised
Schedule VI.
• Concludes by distinguishing Current and
Non-current items, cash and cash
equivalent etc.
• Presentation of groups
• Points of comparison
Skills
• Team work
• Comparison
122

Form and content of Suggested strategy: General Discussion • State the contents of
Statement of Profit and • Discussion on major items shown in the 'Statement of Profit
Loss. P&L a/c of a sole trading concern. or Loss' of compa-
• The format of Statement of Profit and nies as per Revised
Loss in a chart or PPT is presented Schedule VI, Part II
• Discussion on major items in the
statement.
• Concludes by comparing the revised
format with that of earlier format.
• Sharing of ideas
Skills
• Interaction
• Communication
• Initiative
• It enabled
Preparation of state- Suggested strategy : Case Study • Prepare the financial
ment of Profit and Loss • Illustrate an example by citing major items statements of com-
and Balance Sheet of included while preparing the final accounts panies
companies of a company.
• Emphasis should given be to follow the
sequence of assets and liabilities as per
schedule vi
• Observing format
Skills
• Analysis
• Problem solving
• Self- awareness
Importance of financial Suggested strategy : General Discussion • Describe the signifi-
statements, Limitations • Discussion on the users of financial cance and limitations
of financial statements statements. of financial state-
• Discuss the uses and importance of ments
financial statements.
• Elicit the limitations of financial statements
with suitable questions
Skills
• Interaction
• Evaluation
• Communication
• Inference
123
Preparation of financial statements

Suggested strategy: General Discussion
The following items are dictated to the students.
• Preference share capital
• Equity share capital
• Reserve and surplus
• Land
• Building
• Patents
• Stock
• Debentures
• Creditors
• Bills Receivable, etc
Students are asked to present the above items in the following format. Apt
clues and supports from the part of the teacher will help a lot to fill up the
activity table
Items Group Subgroups
Preference share capital Share holders fund Share capital
Equity share capital ? ?
Reserve and surplus ? ?
Land No current asset ?
Building ? Fixed asset- tangible
Patents ? Fixed asset- intangible
Stock ? Inventory
Debentures ? ?
Creditors Current Asset ?
Bills Receivable ? Trade Receivable
After filling up the above blank boxes, further similar items may be discussed.
After giving thorough briefing with all possible items, they may be presented
with the prescribed format for the preparation of financial statements as laid
down in the schedule.
124
Teacher Assessment
Attributes 4 3 2 1 Remarks
Mindset
Engagement
Judgement
Analysis and conclusions
4 - Highly Effective; 3 - Effective; 2 - Need improvement; 1 - Does not
meet standards
Unit
Assessment
• General discussion on meaning, • Notes on the financial
nature and objectives of statements
financial statements
• Group discussion on form and • Table showing comparison
contents of the Balance Sheet of between horizontal and
companies vertical formats of Balance
Sheet
• Notes showing differences
between current and non -
current items in Balance Sheet
• General discussion on the form • PPT showing the format of
Unit test
and content of Profit and loss statement of Profit and loss

statement
• Case study on the preparation • Item wise list of major
of statement of profit and loss accounts to be included in
and Balance Sheet profit and loss statement and
Balance Sheet and their
sequential order
• General discussion on interest on • Journal entries for treatment
debentures of interest on debentures and
adjustment entries for
discount or loss on debentures
• General discussion on the • Notes showing the importance
importance and limitations of and limitations of financial
financial statements statements
125
TE Questions
1. Explain the need for preparation of the financial statements.
2. Show the major heads and its sub-heads while drafting the financial statements.
a. Profit and loss a/c or balance
b. Loose tools
c. Plant
d. Patent
e. Spares
f. Instruments
g. Discount on Bills
126
Unit
4 Analysis of Financial Statements
Introduction
The financial statements themselves have limited scope as they depicts
a general view on the financial state of any business unit. In order to
understand the strength and weakness of a business concern, one has
to go deeper into the components of these statements. This
necessitates Intra wise, inter wise, horizontal and vertical means of
analysis between the data contained in the financial statements.
Through this chapter students learn how such data can be analyzed
using the required tools of analysis.
Values and Attitudes:
Develops confidence and appreciates the analysis and interpretation
of financial statements.

Analysis of Financial Suggested strategy: General discussion The student will be able
Statements • Elicit the meaning and purpose of financial to:-
• Meaning statements using reflective questions • Describe the mean-
• Importance • Explains the meaning of words 'analysis' ing, significance and
• Objectives and 'interpretation' and its complimentary objectives of analysis
nature. of financial state-
• Discuss the significance and objectives of ments
analysis of financial statements by
providing suitable bases
• Emphasize the significance of analysis of
financial statements in government policy
decisions.
Skills
• Communication
• Analysis
• Interaction
• Leadership
Tools of analysis of fi- Suggested strategy : Group Discussion • Identify the various
nancial statements • Groups are assigned with a specific tool tools of financial
of analysis such as comparative analysis
statements, common size statements, trend
analysis, ratio analysis and cash flow
analysis.
• Collect relevant information from school
library or internet sources.
• Discussions in the group, based on the
collected information from various
sources.
• Concludes by explaining the meaning of
'horizontal analysis' and 'vertical analysis'.
• Collection of information
• Comprehensiveness
128

Skills
• Analytical
• Leadership
• ICT enabled
• Creativity
• Team work
Comparative State- Suggested strategy : Case Study • Prepare comparative
ments • Familiarizes the steps in the preparation statements
of comparative statements.
• Suitable illustrations given to prepare
Comparative Statement of Profit and Loss
and Comparative Balance Sheet.
• Format of comparative Statement of
Profit and Loss and Comparative Balance
Sheet are introduced.
• Relevant questions are asked to analyze
the case to arrive at correct solution.
• Help students to interpret the results and
financial position of the company.
• Analysis of case
• Sequential completion
Skills
• Analysis
• Interpretation
• Problem solving
Common size state- Suggested strategy : Case Study • Prepare common
ments • Familiarizes the steps in preparation of size statements
common size statements.
• Suitable illustrations given to prepare
Common size Statement of Profit and
Loss and Common size Balance Sheet.
• Compare the Balance Sheet and the
Common size Balance Sheet.
• Relevant questions are asked to analyze
the case to arrive at correct solution.
• Analysis of case
• Sequential completion
129

Skills
• Analysis
• Interpretation
• Problem solving
Trend Analysis Suggested strategy : Group discussion • Calculate trend per-
• Annual sales figures of a business for the centages
last 5 years can be given for discussion
• Compare these figures to identify the
increasing or decreasing trend.
• Helps to develop the formula for
calculating Trend percentage.
• Suitable illustrations given in groups to
calculate the trend percentages and
interpret the results.
• After presentation, concludes by stating
the relevance of the base year.
• Calculation of trend percentages
• Interpretation.
Skills
• Team work
• Problem solving
• Decision making.
• Analysis and interpretation
Limitation of financial Suggested strategy: General discussion • State the limitations
analysis. • Elicit the significance of financial analysis of financial analysis.
by posing thought provoking questions
• Discussion conducted to analyze the
various limitations.
• Concludes by outlining suggestions to
improve these limitations.
• Listing of limitations
Skills
• Communication
• Analysis
• Evaluation
• Inference.
130
Comparative financial statements

Strategy: Group discussion
For discussion the teacher may provide Balance Sheet for two years of any
company with relevant items arranged in the order of liquidity.
Tasks:
1. They have to go through each component in the Balance Sheet and
make a comparison of the figures between the years.
2. Let them draw a table to show the increase / decrease in absolute terms
3. Let them do the percentage of each item taking the previous year as
base
After the above exercise they may be given a prescribed format to do the same
process again but systematically
On consolidation the teacher may convince the importance of such an analysis
Check list for self assessment
No Attributes 4 3 2 1
1 My Contribution in discussion
2 Attainment of concept
3 Timely completion
4 - Outstanding 3 - Good 2 - Average 1 - Need improvement
Unit
Assessment
• General discussion on meaning • List showing the objectives of
of meaning, nature and financial statements
objectives of analysis of financial
statements
Unit test
• Group discussion on different • Report on various tools for

tools for analysis of financial analysis of financial statement
statements
• Case study on preparation of • Prepared comparitive
comparitive statements statements
• Case study on preparation of • Prepared common size
common size statements statements
131
Unit
Assessment
• Group discussion on trend • Calculated trend percentages
analysis • Notes on intrepretation of tend
Unit test
percentages
• General discussion on the • Notes showing the limitations
limitations of financial of financial statements
statements
TE Questions
1. Explain the need for analyzing the financial statements?
2. What do you mean by comparative financial statements?
3. Prepare a common size income statement from the following:
Sales Rs.1,00,000
Purchaseses Rs. 70,000
Closing Stock Rs. 10,000
Op. Stock Rs. 12,000
Direct Expenses Rs. 5,000
Other operating expenses Rs. 2,000
132
Unit
5 Accounting Ratios
Introduction
Ratio analysis stands as an effective tool for analysis of the financial
statements. A number of ratios are available with the help of which
one will be able to arrive at proper conclusions when one deals with
the financial health of a firm. This chapter discusses the different types
of ratios that can be computed financial statements.
The art of analysing the data in the financial statements and
interpreting the results can work out wonders by enabling the
advantages of reading between the lines.

Ratio analysis Suggested strategy: General discussion The student will be able
• Meaning • Discussion for recalling the trend ratios to:-
• Objectives • Questions are posed to discuss the • Explain the meaning
meaning and objectives of ratio analysis. and objectives of ra-
• Emphasizing the role of ratios in tio analysis
interpreting the business results and
financial position.
• Initiation
• Notes of discussion points
Skills
• Communication
• Analysis
• Initiative
• Inference
Advantages and limita- Suggested strategy : Debate • State the advantages
tions of ratio analysis • Students are grouped and one group and limitations of ra-
favoring the strength of ratios are a tio analysis
powerful tool of analysis by stating its
merits
• Other group highlighting the demerits of
ratio analysis.
• Moderator to suggest how to overcome
the limitations.
• Data collection
• Logical arguments
• Sharing useful ideas
• Debate report
• Participation
Skills
• Communication
• Constructive criticism
• Interpersonal relationships
Traditional and func- Suggested strategy : General Discussion • Identify the tradi-
tional classifications of • Discussion initiated on how to arrive at tional and functional
ratios the percentage of profit of a business? classifications of ac-
• What do you understand by liquidity? counting ratios.
• How can you arrive at the liquidity position
of a firm?
• By posing similar questions teacher can
conclude that ratios can be classified as
134

profit and loss account ratios, Balance
Sheet ratios and composite ratios.
• Discussion on the meaning of solvency,
liquidity and activity ratio's
• Classification can be done on the basis of
above discussion as functional ratios
• Contribution of ideas
Skills
• Effective Communication
• Leadership
• Trusting others
Liquidity ratios Suggested strategy : General Discussion • Calculate various li-
• Current ratio • A list of assets and liabilities are provided quidity ratios
• Quick ratio and asked to classify them into current • Interpret the various
assets and current liabilities liquidity ratios calcu-
• Of the above list students are asked to lated for inter-firm
identify the current asset which is most and intra-firm com-
difficult to realize(Stock and Prepaid parison
expenses)
• Based on the above concept,
differentiation between current asset and
liquid assets can be drawn.
• Help to measure the capacity of the
business to meet its short-term obligations
by interpreting these ratios.
• Emphasizes the usual liquidity ratios for
evaluation.
• List of current assets and current liabilities
• Work sheet showing ratio calculation
Skills
• Communication
• Interpretation
• Problem solving
Solvency ratios Suggested strategy : Case Study • Calculate various sol-
• Debt-Equity ratio • Illustrate suitable cases involving data for vency ratios
• Debt to capital calculating various solvency ratios.
employed ratio • Narrate the formulas to be used for
calculating these ratios.
135

• Proprietary ratio • Interaction to calculate the ratios. • Interpret the various
• Total assets to debt• Helps to evaluate solvency of the business solvency ratios cal-
ratio using these ratios. culated for inter-firm
• Interest coverage Assessment : Teacher assessment and intra-firm com-
ratio • Case analysis parison
• Calculating ratios
• Interpretation
Skills
• Problem solving
• Ability for reasoning
• Inference
Activity or Turn-over Suggested strategy : Case Study • Calculate various ac-
ratios • Illustrate suitable cases involving data for tivity or turn-over ra-
• Inventory Turnover calculating various activity ratios. tios.
• Trade receivable • Helps them to use formulas for calculating • Interpret the various
Turnover these ratios. activity ratios calcu-
• Trade Payable • Lead questions asked to calculate the lated for inter-firm
Turnover ratios. and intra-firm com-
• Investment Turn • Helps to evaluate the performance of the parison
over. business using these ratios.
• Fixed Assets Turn Assessment : Teacher assessment
over • Case analysis
• Working Capital • Calculating ratios
Turnover • Interpretation
• Sharing useful ideas
Skills
• Problem solving
Profitability Ratios Suggested strategy : General Discussion • Calculate various
• Gross Profit Ratio • Initiated discussion by recalling the terms profitability ratios
• Operating Ratio such as gross profit, net profit, dividend, • Interpret the various
• Operating Profit retained earnings etc. profitability ratios cal-
Ratio • Familiarizes different ratios used for culated for inter-firm
• Net Profit Ratio measuring the profitability of a business. and intra-firm com-
• ROI • Lead questions are asked to form the parison
• RONW formulas for calculating these ratios
• EPS • Illustrations given for calculating these
• Book value per ratios.
share • Help to measure the profitability of the
business by interpreting these ratios.
136

• D/P Ratio Assessment : Teacher assessment
• P/E Ratio • Previous knowledge
• Calculating ratios
Skills
• Communication
• Interpretation
• Problem solving
Liquidity Ratios:
Suggested Strategy: General Discussion
Mr. Basheer is a supplier of confectionary items to big business houses. But
before starting supply to new and unfamiliar firms it is his habit to analyze
that whether the firm will be able to pay their dues in time or not. On one such
occasion, he has been supplied with the following data by the company at his
request. The list stood as follows:
Cash Rs. 28,000
Debtors Rs. 30,000
Stock Rs. 30,000
Bills Receivable Rs. 20,000
Prepaid Rs. 12,000
Creditors Rs. 40,000
Credit purchases Rs. 4,00,000
Discussion Points:
Estimate:
a) Total current assets
b) Total current liabilities
c) What do they mean?
d) What resources will a firm use to meet its current liability?
e) How much is the current assets to current liability ratio?
The discussion shall lead a general idea on the use of the above ratio. The
teacher, to consolidate with demonstration of the above as:
1,20,000/40,000 = CA/CL
= 3:1
She explains that this would mean simply Rs.3 will be available for paying off
CL of Rs.1. Hence there is nothing to fear to deal with this company. The teacher
tells this ratio is so called current ratio and gives a brief explanation.
137
Teacher Assessment
a. Current ratio = ?
b. Standard fixed for current ratio ?
Unit
Assessment
• General discussion on the • Notes showing the meaning
meaning and objecitves of ratio and objectives of ratio analysis
analysis
• Debate on the advantages and • Report on advantages and
limitations of ratio analysis limitations of ratio analysis
• General discussion on traditional • List showing different ratios
and functional classification of to be classified as profit and
ratios loss account based and
Unit test
Balance Sheet based.
• General discussion on liquidity • Worksheet showing
ratios calculation of ratios
• Case study on solvency ratios • Worksheet showing
calculations of different
solvency ratios
• Case study on activity or turn • Illustration showing the
over ratios calculation of different ratios
• General discussion on • Illustrations showing the
profitability ratios calculation of different ratios
under profitability
TE Questions
1. What do you mean by ratio analysis. State its purpose?
2. Given:
Current assets Rs.2,00,000
Current liabilities Rs. 75,000
Bank Over Draft Rs.2,50,000
Stock Rs. 20,000
Find out:
a. Quick ratio
b. Current ratio
3. Given:
Debtors Rs.1,00,000
Total Sales Rs.4,00,000
Cash Sals Rs.1,00,000
a. Find out debtors turnover ratio?
b. Also state the debt collection period?
138
Unit
6 Cash Flow Statement
Introduction
Any stakeholders of a business organization seek to answer the
following questions between two particular points of time.
a. Where does the cash flow in from?
b. Where does the cash go to?
The term cash here means cah and cash equivalents. Any person who
has direct or indirect dealings involving cash may base his decision
through a cash flow analysis. This requires proper understanding of
different forms of cash flow activities. Broadly these activities are
classified under operating, financing and investing activities. The cash
flow statements are thus shown under the following heads.
a. Cash from operating activities
b. Cash from investing activities
c. Cash from financing activities
Supporting activities may be given to them to develop skills in
distinguishing the financial components under different heads and
enable them to prepare cash flow statements.
The relevance of cash flows generated from operations, investment
and financing activities needs to be understand in proper perspective
as a format closer to reality.

Cash flow statement Suggested strategy: General discussion The student will be able
• Meaning • Initiate discussion by stating the revised to:-
• Objectives AS-3 which is made mandatory for all • Explain the meaning,
• Benefits listed companies to prepare and present objectives and ben-
a cash flow statement on annual basis. efits of cash flow
• Familiarize the terms cash inflows and statements
cash outflows.
• Discussion based on thought provoking
questions to elicit the meaning, objectives
and benefits of cash flow statement.
• Emphasis it as a tool of financial analysis..
• Participation is discussions
Skills
• Interaction
• Initiative
• Communication
• Inference
Cash, cash equivalents Suggested strategy: General discussion • Identify cash equiva-
and cash flows. • Familiarize the terms by using suitable lents and cash flows
examples.
• Asked to compare these terms by asking
lead questions
• Hints may be given for comparison.
• Participation in discussion
• Points of comparison
Skills
• Communication
• Interaction
• Comparison
Operating activities, in- Suggested strategy : General Discussion • Distinguish between
vesting activities and • Recall the meaning and purpose of cash operating activities,
financing activities. flow statements. investing activities
• Helps to prepare a list of cash inflows and and financing activi-
cash outflows in each category. ties.
• Show a table showing comparison of
these activities by preparing a PPT
140

• Sharing of ideas
Skills
• Interaction
• Communication
• Initiative
• IT enabled
Preparation of Cash Suggested strategy : Case Study • Prepare cash flow
flow statement- Direct • Illustrate example by including major items statement using di-
method. for preparing the Cash flow statement. rect method.
• Lead questions asked to show these items
in the Statement.
• Emphasis should be given for the
treatment of some peculiar items like
interest and dividends, Taxes on Income
and Gains, Non-cash transactions etc.
Skills
• Analysis
• Problem solving
• Arithmetical calculations
• Self- awareness
Preparation of cash Suggested strategy : General Discussion • Prepare cash flow
flow statement- Indi- • Initiate discussion by recalling steps in the statement using indi-
rect method. preparation of cash flow statement under rect method.
direct method.
• Lead question asked to discuss the steps
in the indirect method.
• Suitable examples are given to prepare
the cash flow statement under indirect
method.
Skills
• Interaction
• Evaluation
• Communication
• Inference
141
Cash from operating activity:

AG Ld gives the following particulars regarding how it has arrived at its net
profit which is Rs.11,200. The company has shown the following items in the
debit of its profit and loss account.
Depreciation Rs.1,000
Goodwill written off Rs..1,200
Loss on sale of furniture Rs.2,000
Its credit includes:
Profit on sale of land Rs.3,000
Discussion Points:
• How is net profit calculated?
• What are the items to be included in the profit and loss account?
(A brief explanation on the operating and non operating items may be
discussed. It can help them to be aware that both these components
are considered in determining the net profit)
• Having discussed the above matters, teachers may ask the difference
between cash flow and net profit. [A brief explanation on the cash flow
concept is given to the students.]
• Now they are asked to compute the cash from operating activities from
the activity given above.
To make it more comprehensive
The above case study may further be extended.
List out the following particulars
Items Previous year Current year
Debtors 1000 1800
Stock 3000 1000
Bills Receivable 1000 1500
Creditor 2000 1000
After filling up the table teacher asks them to find out the true amount generated
in terms of cash from operating activity.
142
Cash from operating actvities

Operating profit before adjustment of working capital 13400
Add: Decrease inn stock 2000
Add: Increase in creditors 2000
4000
Less: debtors (800)
Less: Bills Receivable (500) 2700
Cash from operating actvities 16100
Self Assessment
Conceptual clarity Responses
a. Meaning of cash flow
b. Which are all components to be considered
in determining net profit
c. I know how to calculate cash from operating
activities separately
Unit
Assessment
• General discussion on the • Notes showing the meaning
meaning, objecitves and benefits and objectives of cash flow
of Cash flow statement statement
• General discussion on cash, cash • List of cash equivalent items
equivalents and cash flows
• General discussion on Operating, • List showing cash inflows and
Unit test
investing and financing activities cash outflows

• PPT showing the comparison
of these activities
• Case study on cash flow • Worksheet showing prepared
statement cash flow statement
• General discussion on cash flow • Worksheet showing cash flow
statement (indirect method) statement
143
TE Questions
1. State the purpose for which cash flow statement is prepared?
2. What does 'cash' represent in a cash flow statement?
3. How is cash flow activities classified?
4. State a few examples of non operating incomes and expenses?
5. Find out cash from operating activities`
Net profit Rs.50,600
Debits found in the profit statement:
Discount on issue of shares Rs.9,000
Interest paid Rs.11,000
Dividend paid Rs.6,000
Loss on sale of old machinery Rs.4,500
Revaluation profit credited to profit and loss account Rs.7,600
144
Unit Computerised Accounting
1 Overview of Computerized
Accounting System
Introduction
The use of computers and Information Technology in accounting
operations has revolutionized the modern business so that the process
of decision making has become quick, accurate, timely and much easier
than ever before. This chapter discusses the concepts, components
and advantages of CAS along with grouping and codification for CAS.

Helps in bringing transparency is keeping accounts and in keeping
ethics in recording business transactions.
Computerised Accountancy Teacher Text

Computerised Ac- Suggested strategy: General discussion The student will be able
counting System. • General discussion on computer, to:-
- Components of associated peripherals; people working • Describe the need of
CAS with procedures, software etc and student Computerised Ac-
- Features of CAS responses are elicited. counting
Assessment: • Identify the various
• Participation components of CAS
• Understanding of concept of CAS ,
components and features
• Chart prepared showing components of
computer
Skills:
Recognizing, Communication, ICT skills
Grouping of Accounts Suggested Strategy: • Explain the need , im-
- Codification General Discussion/Case study portance and meth-
- Methodology to de • A general discussion /case study is odology of grouping
velop coding initiated in the class room regarding the and codification of
structure and coding use of codes and students responses are Accounts
elicited, and they are linked with
codification and its methodology of
structuring
Assessment:
• Student responses - chart prepared
Skills:
• Communication, Explaining,
Implementing, I CT skills
Using Software of Suggested Strategy : • Describe the use of
CAS General Discussion a software for CAS
- Security features • Posing questions like - Have you heard and also the merits
Advantages of CAS of any accounting software? and demerits of CAS
Limitations of CAS • Can you list the names of few
accounting software?
• General discussion on the use of
suitable accounting software and also
the advantages and disadvantages of
CAS
146

Assessment:
• List of various accounting software
Skills:
Communication, differentiate
Summarize, ICT Skills
Accounting Informa- Suggested Strategy : Case study • List out the various
tion System(AIS) • For eliciting the various sub systems of sub systems of Ac-
Accounting Information System, counting Information
teacher can provide a suitable case System and their
analysis among different groups. functions and char-
Assessment: acteristics
• Participation in various stages of case
analysis
• Material prepared and presented
• Chat/graph prepared
Skills:
• Communication, recognizing, classifying,
summarizing
Accounting Codes:
Mr. Visak, an accountant of the firm as part of the computerizing the books of
accounts of a firm gives the following particulars of assets, liabilities and revenue
items
Assets: Incomes:
Land & Building Sales
Furniture Commission received
Stock Discount - Cr
Debtors Dividend received
Debtors
Plant
Bank
Bills Receivable
147
Liabilities: Expenses:
Capital Salary
Bank Loan Rent
Long term borrowing Wages
Creditors Depreciation
Bills Payable Electricity
Expenses Payable Ware housing expenses
Teacher adds that in the above manner the broad category of accounts are
coded. The discussion on the concept of coding may be continued in the similar
manner for the individual items belong to each major group.
For instance, they may be asked to group the assets being fixed and current as
follows
Fixed Assets: Current Assets:
Land & Building Cash
? Bank
? ?
? ?
After arranging in this way suitable codes may be assigned to the above items
as below:
Discussion:
Teacher mentions a few points on the importance of arranging the accounts
systematically. A coded accounting system is more relevant particularly when
there are numerous accounts involved.
After the above brief explanation the teacher may ask:
List out the broad classification of accounts?
• Assets
• Liabilities
• Revenues
• Expenses
If the classification is done in the above manner, can you assign a number for
each item in the chronological order?
Ie.,1 For assets
2 For liabilities
3 ?
4 ?
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Code for fixed assets may be assigned as 11

Now all items in the fixed assets nay begin with 11 if so,
Land and Building say 11.01
Plant ?
Furniture ?
Similarly current assets may be assigned 13, then how will you code its
sub category
Cash 13.01
Bank 13.02
Debtors ?
Bills receivable ?
Stock ?
After the above activity teacher consolidates the meaning and its practical utility
of coding in computerized accounting.
Check list for teacher assessment
Attributes 4 3 2 1
Involvement in class:
a. Clearing doubts
b. Generating discussion
c. Activities
d. Response to queries
Repository of CE Possibilities
Unit
Assessment
• General discussion on the • Chart prepared on the
components and features of CAS components of CAS
• Group discussion, project and • Report on project ·
lab work on logical structuring Out put - Database design
Unit test
of data and storage of data

• General discussion on security • List of various accounting
featues, advantages and software ·
limitations of CAS Notes showing advantages
and limitations of CAS
• Case study on Accounting • Chart prepared on AIS
information System
149
TE Questions
1. Identify the type of codes used in the following example:
Codes Ledger Accounts Codes Ledger Accounts
CA Cash Account BA Bank Account
PA Purchase Account SA Sales Account
FA Furniture Account MA Machinery Account
RA Creditors Account DA Debtors Account
2. Grouping of accounts are based on:
(a) Codes used
(b) Rules of debit and credit
(c) Basic Accounting Equation
(d) Generally Accepted Accounting Principles.
3. Distinguish between Data and information with the help of a suitable example.
4. Accounting software usually ensures data security and confidentiality. Explain
the provisions commonly found in CAS to serve this purpose
150
Unit
2 Spread sheet
Introduction
Computerised Accounting System accepts transaction data,
stores them and retrieves for processing and generating
accounting reports which facilitates management decision
making. Various Accounting Applications or utilities are used for
this purpose. One of such widely used accounting applications
is Spreadsheet. Electronic spreadsheet improves the productivity
by reducing the labor of everyday accounting. This chapter
discusses the basic concepts of spread sheet, data entry, data
and cell formatting, reporting etc.
Values and attitudes:
Softwares like spreadsheet helps to tide over the human thoughts
in terms of establishing horizontal as well as vertical dimensions
and relationships.

Basic Concepts of Suggested Strategy: General Discussion • Outline the concept
Spreadsheet • General discussion on the use of electronic of spreadsheet and
- Labels spreadsheets and its basic operations. its basic features
- Formulas • Syntax of functions and formulas must be
- Functions emphasized
- Text management • Consolidation with the help of a PPT,
and cell formatting highlighting use of functions and formulas,
- Data formatting text and data formatting etc.
- Output reports Assessment:
• Participation in Discussion
• Preparation of formulas
•
Skills:
Communication, compiles, design
Data Entry, Text Man- Suggested Strategy: • State how to use a
agement and Cell For- General Discussion, case study and spread sheet for
matting. Lab work various purposes
• A case analysis given to the students to
familiarize the various ways of handling a
spreadsheet page for data entry, text
management, formatting etc.
• Application of the concept attained
through practical lab works
Assessment:
• Skill in performing lab work
• Various materials prepared, lab records
and lab output
Skills:
Communication ,compiles, design
ICT Skills
Output reports Suggested Strategy: • Explain the use of
Preparation of Reports General Discussion and lab work various output re-
using Pivot table • A general discussion to familiarize ports and equip them
different methods of preparing reports, to prepare reports
followed by practical work in the lab using spread sheet.
based on a given case analysis
Assessment:
• performance in lab work
• Various materials prepared, lab records
and output reports
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Skills:
Communication, compiles, Design, create,
organize, develop ,
Common Errors in Suggested Strategy: • Check various errors
Spreadsheet Group Discussion and case study while working with
• General discussion on various errors that formulas and func-
might occur while working with formulas tions and apply the
and functions or other similar instances. knowledge in error
• Few cases with possibilities/slots for handling
occurrence of different errors are given
in groups.
• Prepare a report on various errors noticed
while working with their case analysis and
suggesting best way of handling such
errors
Assessment:
• Participation in error location
• Participation in error handling
• Materials prepared
• Reports presented
Skills:
Communication, compiles
appraise , construct , analyze,
Evaluate, Relate, justify, rearrange
153
Important Terminologies & Concepts
154
155
Navigation and movement: Mouse and arrow keys are used to navigate in a
worksheet.
Movement Key Stroke
One Cell down Down Arrow or Enter key
One Cell Up Up arrow

One Cell Left Left Arrow
One Cell Right Right Arrow
Movement Key Stroke/Press any key

CTRL+HOME Move Top
CTRL+END Move Last bottom
CTRL+PgUp Switches between worksheet tabs, from left-to-right.
CTRL+PgDn Switches between worksheet tabs, from right-to-left.
CTRL+Right arrow To move around first and last filled cells
END+Right Arrow To move around first and last filled cells
HOME key Beginning of the Row
Formulas
Formulas are a mixture of “functions,” “operators,” and “operands.”
A formula is any equation entered into a cell on a Excel spreadsheet . Every
Excel formula begins with an equals (=) sign.
Order of Precedence in a Formula( order of mathematical calculations)
In Excel spreadsheet, mathematical calculations are done strictly as per the
rules of Algebra. Any operations contained in brackets are carried out first,
followed by exponents, if any, then multiplication, and finally addition and
subtraction in the order from left to right..
1 2 3 4 5 6
() ^ * / + -
Brackets Exponent Multiply Divide Add Subtract
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Writing formula in excel

Create a formula by using cell references and names
Step 1 Click the cell in which you want to enter the formula. (Say Cell B10)
Step 2 In the formula bar , type = (equal sign). ( put = sign)
Step 3 To create a reference, select a cell or a range, or a location in another
sheet, then click and drag on it.
Step 4 Complete and hit enter
There is a formula tab in excel. This tab contains four sections, namely Function
Library , Defined Names, Formula Auditing, and Calculation
1. FUNCTIONS
Definition: A function is a preset formula or a keyword programmed to
perform some specific function. It begin with the equal sign ( = ) followed by
the function’s name and its arguments. The arguments are
Consider the following:
To calculate the total we may write the formula in cell F2 as “ = B2+C2+D2+E2”

In Excel there is preset formula (function) to perform the same operation . It is the
SUM()
What does it do?
The SUM() (read as sum function) contains commands inside the function(which
we do not bother) to perform the same calculation, say “ = B2+C2+D2+E2”
How is it used?
The sum function may be used as:
=SUM(B2:E2)
where B2:E2 represents range of values to be added to obtain total. B2:E2 simply
means B2,C2,D2 and E2. So Sum(B2:E2) means find the sum of B2,C2,D2 and
E2
What does it contain?
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Usually the function body contains five parts
Thus it is clear that a function is a built in formula to perform certain specific

operation. A function can be used as a formula or it can be used along with
other functions or formula.
For example consider the following
Adithya obtained the following score in competitive examination. The rank
score is computed by adding the average of written test to interview score.
Find the rank score of Rajesh using functions. Decimals, if any , should be
rounded.
This can be done easily using three built in excel functions: AVERAGE(),
ROUND()
The score in interview is contained in F2
Now we can compute Rank score using the formula = F2 + ROUND (AVERAGE
(B2 : E2), 0)
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Thus it is clear that function can be used as a formula or it can be used along
with other functions and formula
Naming Ranges
We can give a name to cells or ranges and such name can be used instead of
cells or ranges in the formula. In other words cell references in a function can
be replaced with the name of range. For example assume that range “B2:E2” is
named as “numsum”, then we can write the formula as
=SUM (numsum) instead of =SUM (B2:E2).
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Some useful Functions
If Function return one value if a condition is true and another value if it’s false
Activity 2
Bonus is 15 % of Basic Pay, if Basic Pay is greater than 20000, otherwise bonus
is 20% of Basic Pay. Use IF() to calculate Bonus.
Assume BP in A2, then in cell B2 write the formula “
=IF(A2<=20000,A2*20%,A2*15%)”
Then hit enter to see the result. Copy the formula to other cells below.
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Nested IF Function:
The IF function can be nested, when you have multiple conditions to meet. If
the first condition tested is FALSE, it tests the next and so on. Every time the
FALSE value is being replaced by another If function to make a further test.MS
Excel allows up to 64 nested IF functions as the values of an IF function
Activity 1
Write a formula in Excel using nested IF function to check the grade of score of
students. The criteria is given below:
Score Grade Score Grade
90-100 A+ 50-59 C+
80-89 A 40-49 C
70-79 B+ 30-39 D+
60-69 B less than 30 D
Enter score for few students and check test the formula.
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Step 3 Check validity of formula by entering different scores in any of the cells
in column ‘c’
Activity 2
Write an excel formula to multiply a given number entered in a cell B2 with
the following conditions
If B2 is less than 25, then multiply by 1,
If B2 is greater than or equal to 25 but less than 50, then multiply by 2
If B2 is greater than or equal to 50 and less than 100, then multiply by 3
If B2 is great than or equal to 100 and less than 200 , then multiply by 4.
If B2 is greater than or equal to 200, then display “ Enter a value less than 200”
Use nested IF function
Answer
Step 1 Format cells
Step 2 Enter the formula in B3
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Date and Time Function
163
164
165
Activity 2
A list of Debtors and Creditors are given below. Using SUMIF(), calculate the
amount of total debtors and total creditors.
Answer
Step 1 Select cell D1, enter the text “Dr”
Select cell D2, enter the text “ Cr”
Step 2 Select cell A9, enter the text “Total Debtors”
Select cell A10, enter the text “Total Creditors”
Step 3 Select cell C9, enter the formula : =SUMIF(B1:B7,D1,C1:C7)
Select cell C10, enter the formula :
=SUMIF(B1:B7,D2,C1:C7)
The formula can also be written as follows (avoiding column D)

= SUMIF(B1:B7,”Dr”,C1:C7) & = SUMIF(B1:B7,”Cr”,C1:C7). In this case step 1
above not necessary.
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167
168
169
170
171
Text Functions
172
173
174
Logical Functions
MS Excel provides three logical functions to work with the logical values. These
functions are AND, OR and NOT. These functions are used to carry out more
than one comparison or multiple conditions. These logical functions return
either TRUE or FALSE after evaluating arguments
Activity
For females, if taxable income is less than or equal to Rs 500000 then standard
deduction is 300000, otherwise 250000. For males standard deduction is 200000.
Assume Tax rate 50% of Net Taxable Income
Develop a formula to compute Tax. Use suitable logical functions
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Step 1 format a cells as follows
Step 2 Select Cell C2 and type the formula and hit enter.
Now cell C2 will display the following result ( Fill formula downwards)
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This functions returns TRUE if any argument evaluated is true, and returns
FALSE if all arguments are false
Activity
For SI selection in Kerala Police, there is physical test, which consists of three
items. A candidate has to qualify ANY one of the three tests to qualify for the
final. The prescribed standard for the physical test is given below:
Shot put 6 mtr or above.
Ball throw 45 mtr.
500 mtr race within 4 minutes
Write a formula using OR function to check whether a candidate qualify or not
The following data is furnished.
Answer
Type the formula in F2: =IF(OR(C2>=6,D2>=45,E2<=4),”Qualified”, “Not
Qualified”)
Activity 2
Modify the above program in such a way that the name of the candidate is also
printed in Cell F2 (E.g. say “Rajesh Qualified”.
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Answer:
Modify the formula as given below
The result now will be:
Activity 3
Blue, Red and Yellow are the primary colors. Write a formula to check whether
the text is a primary color, if yes print “xxxxx is a Primary Color” otherwise
print “xxxx is not a Primary color).
Step 1 Format the cell as shown below
Step 2 Write the formula in B2
To test more colors , copy this formula in the below cells
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Lookup Function
What will you do when you need to look in a single row or column and find a
value from the same position in a second row or column?
No, confusion, you will look in a column and find the data corresponding to
the row. This can be graphically depicted as follows:
There are two ways to use LOOKUP: Vector form and Array form
Vector form: Vector form of LOOKUP looks in one row or one column for a
value. E.g. If you want to search for a value in column A, down to row 6. , i.e.
range A1:A6
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Thus the syntax can be rewritten in an understandable form:
The value 216 is searched in vector A2:A12. When it finds a match (i.e. locates
216) it goes through the corresponding row and picks up the value (here1000)
from the column which is provided as the third argument( here D2:D12). Thus
the formula can be written like :
Activity:
A trader deals in various household items, and an item list is maintained in
the following format.
Item Code Item Name Dealer Name Unit Price Qty Rate of tax
A501970 Mobile S5 Samsung 14000 10 12
A501971 Mobile S4 Samsung 20000 25 15
A501972 Mobile L5 Lenovo 30000 15 20
A501973 Data cable iball 525 105 5
A501974 Memory card scandisk 350 50 5
A501975 Mobile Cover iball 1000 40 4
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A501976 Mob Charger Lenovo 2150 10 4

A501977 Laptop Acer 26000 5 15
A501978 iPod Apple 7500 22 18
A501979 Notebook Sony 12500 14 20
A501980 Laptop bag Hp 1500 60 2
A501981 Print Cartridge Hp 2000 100 20
Write an Excel formula to display the following detail , when Item Code is
input
B17: Label “Enter Code”
C17: Box to Enter Code
D17 Display Result
Answer:
Step 1 Select cell A1 ,B1,C1,D1,E1 and F1 and type headings
Step 2 Make data entries in all columns.
Step 3 Select B17 and type the label

Select C17 format cell to give thick boarder
Select D17 and type the Formula:
The Formula to look up value is
=LOOKUP(C17,A2:A13,D2:D13) and hit enter to see the result
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Array Form:
Array form: An array is a collection of values in rows and columns (like a table)
that you want to search. For example, if you want to search columns A and B,
down to row 6, i.e. from a range A1:B6. To use the array form, your data must
be sorted.
Syntax
LOOKUP(lookup_value, array)
An array is a collection of values in rows and columns(range of cells like a
table) that we want to search with lookup value. For example, if you want to
search columns A and B, down to row 6. LOOKUP will return the nearest match.
To use the array form, your data must be sorted.
The array form of LOOKUP looks in the first row or column of an array for the
specified value and returns a value from the same position in the last row or
column of the array.
The array form of LOOKUP is very similar to the HLOOKUP and VLOOKUP
functions.
The difference is that HLOOKUP searches for lookup_value in the first
row, VLOOKUP searches in the first column, and LOOKUP searches according
to the dimensions of array.
Example :
The grade criteria in examination is as follows:
0-29% D, 30-40%-D+, 41-50%-C, 51-60%-C+, 61-70%-B,71-80%-B+,81-90%-A,91-
100% -A+
Enter the criteria in a table and find the grade of students according to their
percentage score input
Enter the range in excel sheet as follows
Step1
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Step 2
In cell D2 , enter the name of student, and in E2 the marks scored.
Step 3
In cell F2 enter the formula: =LOOKUP(E2,A2:C9) and press enter. The lookup
function looks for a nearest match in the first column and returns the value
corresponding in the same raw .
Example 2
TIP In general, it’s best to use the HLOOKUP or VLOOKUP function instead
of the array form of LOOKUP. This form of LOOKUP is provided for
compatibility with other spreadsheet programs.
VLOOKUP FUNCTION
Syntax:
VLOOKUP (lookup_value, table_array, col_index_num, [range_lookup])
VLOOKUP stands for Vertical LOOKUP. VLOOKUP function is used to
look up a value we want to find in a large data table. VLOOKUP looks for a
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value in the leftmost column of a table, and then returns a value in the same
row from a column we specify. By default the table must be in ascending order.
Using VLOOKUP is similar to looking up a person’s name in a telephone book
to get a telephone number( name number etc are vertically
arranged). VLOOKUP looks at a value in one column, and finds its
corresponding value on the same row in another column.
Example
Write the following formula in E2 and look the result.

=VLOOKUP(“AJI”,A2:D7,4)
.HLOOKUP FUNCTION.
HLOOKUP stands for Horizontal LOOKUP. This function looks for a value
in the top row of a table or array and returns the value in the same column
from a row based on the index number we specify. more specifically HLOOKUP
function ‘looks up’ a given value in the top row of a data array (or table), and
returns the corresponding value from another row of the array.
Syntax.
HLOOKUP( lookup_value, table_array, row_index_num, [range_lookup] )
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Example:
The rate of gold per gram during the first week of January is given below
To find the rate on a specific date, enter the following formula in cell A3. The
result is:
Suppose more items and rates are contained in the array:
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Financial Functions:
1) The ACCRINT () function
Returns the accrued interest for a security that pays periodic interest.
Syntax
ACCRINT(issue, first_interest, settlement, rate, par, frequency, [basis],
[calc_method])
The “issue”( security’s issue date) should be entered by using the DATE
function, otherwise problems can occur if dates are entered as text.
The ACCRINT function syntax has the following arguments:
Parameters Field Remarks
Issue Required The security’s issue date
First_interest Required The security’s first interest date.
Settlement Required The security settlement date
Rate Required security’s annual coupon rate
Par Required security’s par value(If you omit par,
ACCRINT uses 1,000)
Frequency Required The number of coupon payments per
year
1= Annual
2=Semi Annual
3=Quarterly
Basis Optional The type of day count basis
0=US (NASD) 30/360
1=Actual/actual
2=Actual/360
3=Actual/365
4=European 30/360
Calc_method Optional A value that specifies the way to
calculate interest
Activity
ABS CO issued a security with par value is $10,000on 01-Jan-2012, the first
interest date is 01-Apr-2012, the settlement date is 31-Dec-2013 and the annual
coupon rate is 8%. The security’s, payments are made quarterly, and a US
(NASD) 30/360 day count basis is used. Use ACCRINT () function to calculate
the accrued interest of a security that pays periodic interest.
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Answer:
2) The CUMIPMT () function

The CUMIPMT function returns the cumulative interest payment on a loan
between two specific periods , that is start period and end period.
Syntax:
CUMIPMT(rate, nper, pv, start_period, end_period, type)
Arguments
rate The interest rate, per period
nper The length of the loan in months.
pv The amount being borrowed, also referred to as the
present value
start_period The number of the first period over which the interest is
to be calculated (must be an integer between 1 and nper)
end_period The number of the last period over which the interest is
to be calculated (must be an integer between 1 and nper)
type whether the payment is made at the start or the end of
the period(Value should be integer (0 or 1)
The value 0 or 1 has the following meaning:
0 - the payment is made at the end of the period
1 - the payment is made at the beginning of the period
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Note: In line with the general cash flow convention, outgoing payments are
represented by negative numbers and incoming payments are represented by
positive numbers.
Activity 1
A loan of Rs 400000 was taken , repayable after 15 years at 11.70% per year.
How much will be paid towards the interest :
CASE I in the first year
CASE II in the second year
CASE III in the third year
CASE IV in the last year
Answer
3) The PV () functi on
The Excel PV function calculates the Present Value of an investment, based on
a series of future payments.
Syntax
PV( rate, nper, pmt, [fv], [type] ) where:
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Activity:
Calculate the present value of an annuity that pays Rs 10,00 per month for a
period of 5 years. The interest is 12% per year and each payment is made at the
end of the month. Assume payments are made (i) at the beginning of each
month and (ii) at the end of each month
The formula is : =PV(B1/12,B2*12,B3,B4,0)

Calculate the present value of an annuity that pays Rs 10,00 per month for a
period of 5 years. The interest is 12% per year and each payment is made
quarterly. Assume payments are made (i) at the beginning of each month and
(ii) at the end of each month
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The formula is : =PV(B1/4,B2*4,B3,B4,0)

Note :Rate is divided with 4 (four quarter) and also year ( 5 year has5x4= 16
quarters)
4) The FV() function
Calculates the future value of an investment based on a constant interest rate.
You can use FV with either periodic, constant payments, or a single lump sum
payment.
The syntax of the function is :
FV( rate, nper, [pmt], [pv], [type] )
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Activity:
How much will you have in the bank if you start with 20,000 and save 200 per
month (at the beginning of each month) at an annual rate of 10% for 40 years.
Interest is compounded monthly.
Solution:
Future Value = FV( rate, nper, [pmt], [pv], [type] )
There is an easy way to compute by using function from formula menu

Step 1 Click on cell B8 ( where we wish to display result)
Step 2:Enter the following values in cells as see below:
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Step 3
Go to Formula Tab->Click Financial-> Click FV to open the following box
Step 4 Click on Rate field and select cell B2 in the worksheet

Click on nper field and select cell B4 in the worksheet
Click on pmt field and select cell B6 in the worksheet
Click on pv field and select cell B5 in the worksheet
Click on type field and select cell B7 in the worksheet
Click OK at the end to get the result
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5 PMT () function
The PMT function calculates the constant periodic payment required to pay
off a loan or investment, with a constant interest rate, over a specified period.
The syntax is :
PMT( rate, nper, pv, [fv], [type] ) where
Activity: Calculate the monthly payments on a loan of 150,000 which is to be

paid off in full after 5 years. Interest is charged at a rate of 12.5% per year and
the payment to the loan is to be made at the end of each month.
Solution
Step 1 Enter the basic values as shown below in column B of excel sheet
Step 2 Enter the following formula in cell B7

=PMT(B2,B4,B5,B6)
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Step 3 Press Enter to get the result
(the minus sign simply represents monthly cash outflow)

Using the PMT() in the Formula menu , the result will be:
6. RATE () function
The Rate function calculates the interest rate required to pay off a specified
amount of a loan over a given period.. RATE is calculated by iteration and if
the successive results of RATE do not converge to within 0.0000001 after 20
iterations, RATE returns the #NUM! error value.
Syntax:
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RATE( nper, pmt, pv, [fv], [type], [guess] ) where:
Example:
A loan of Rs. 200000 is to be paid off in full with fixed payments of Rs. 4500 per
month, over a period of 5 years. The payments are to be made at the end of
each month. Compute the rate of interest using RATE().
Solution:
Step 1
Enter the values in column B of an excel sheet as shown below :
Step 2
Enter the formula in cell B7 : =RATE(B2,B3,B4,B5) and press enter
Step 3 (The result in cell B7 represent monthly rate, so multiply it with 12 to
get yearly rate)
Enter the formula =B7*12in Cell B8 and press enter
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Alternatively we may use the RATE() in formula Tab to get the value in B7
Example 2:
ABS Chits Pvt. Ltd is a private banking company which announced a new
savings scheme for salaried employees , with a monthly savings of Rs 5500
over 2 1/2 years to get a lump sum amount of Rs. 200000. Calculate the monthly
and yearly interest rate assuming the starting value as zero, and savings are
to be made at the start of each month.
Solution:
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Step 1: Enter the values as shown below in an excel sheet
Step 2 Enter the formula in B7: = RATE(B2,B3,B4,B6,B5) i.e. [=RATE(30,-

5500,0,200000,1)]
Alternatively use RATE() in Formula tab to compute monthly rate
7. NPV () Function
NPV is a popular measure of profitability used in corporate budgeting to assess
a given project’s potential return on investment. Based on the assumption “ Re
1 earned today will not worth equal to Re 1 earned a year after” the time value
of the cash flows are compounded at a discount rate over the duration of the
project. To calculate NPV, the estimated cash outflow and inflow for each period
must be established, as well as the expected discount rate.
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NPV function calculates the Net Present Value of an investment, based on a

given discount rate, and a series of future payments and income.
The format of the function is :
NPV( rate, value1, [value2], [value3], .. where:
Important points:
• If the values are supplied individually, numbers, blank cells, logical
values and text representations of numbers are interpreted as numeric
values; other text values and error values are ignored
• If the values are supplied as an array, all non-numbers in the array are
ignored
• In Excel 2007, we can provide up to 254 payment and income values to
the NPV function, but in Excel 2003, it is limited up to 29 values.
• NPV in Excel does not actually calculate the Net Present Value (NPV).
Instead, it calculates the present value of a series of cash flows, even or
uneven, but it does NOT net out the original cash outflow at time
period zero. This original cash outflow actually needs to be manually
subtracted out when using the NPV formula in Excel
•
NPV is useful in the following ways
Helps to compare projects with their relative profitability to ensure that only
the most lucrative ventures are pursued.
A higher NPV indicates that the project or investment is more profitable.
Example
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2.DATA ENTRY , TEXT MANAGEMENT AND CELL FORMATTING

Excel is a very popular tool for entering and manipulating data.
Data Entry:
In excel, data entry refers to the direct input of data in the appropriate cells,
ranges or data fields, of a worksheet , through the use of a human data-
input device or built in data fill options. Some common methods are mentioned
below:
Data fill :
Instead of entering data manually on a worksheet, you can use the Auto Fill
feature to fill cells with data. The data such as numbers, text , date or combination
of them that follows a pattern can be filled automatically in to other cells or
range that we require by dragging the fill handle or through ribbon option.
Mouse Option by dragging the fill handle
A fill handle is a small black square in the bottom-right corner of the selected
cell(s).Steps to auto fill data are :
Data Fill: Ribbon Option

Under this method we can make use of the built in facility to fill a series in the
Edit group of the Home Tab. This option copies (repeats) the information
from one cell to another. Type the information (cell contents or formula) in the
first cell of the group
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Steps to fill data
Import/copy data from other sources:

There is another easiest method for data entry in cells. In this case the required
data is copied or imported to excel worksheet from other sources such as text
or non text data files.
Text files: These are files with .txt or .csv ( comma separated Values) extensions.
These files can be opened in Windows text editor like note pad etc.
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Creating Text Data Files:

Steps:
1. Open notepad (Path=Start->All Programs->Accessories->Notepad
2. Type column heading in the first line of text file.. Each column name
should be separated by comma (,) ( Excel assumes first line for
headings)
E.g. AdmNo,Name,Sex,Mark1,Mark2,Mark3,Mark4
3. The second line onward we can type data. The data so entered should
be separated by comma.
E.g.: 1001,Vishnu,Male,56,58,59,59
1002,Arunkumar,Male,54,57,54,53
1003,Anna Sara Krishnan,Female,57,58,54,56
1004,P.K. Sreekala,Female,57,56,60,59
4. Save the text file, give a name, say “mytextdatafile”. By default, notepad
saves files with extension .txt
The text file may contain data as follows:
5. Open MS Excel worksheet

a. Click Data Tab in the Ribbon
b. Click From Text in the Get External Data option
201
6. Now the Import Text File Dialogue Box will appear. Browse folder
and locate file, click import.
7. Now data will be copied in to the respective columns and rows of

excel sheet from the text file.
The copied data will look like as follows.
202
Work sheet for teacher assessment

Need
Excellent Good Average
Indicators Improvement
(4- score) (3- score) (2 score)
(1 score)
Participation in discussions
Creative suggestions
Sharing of similar cases
Answering Reflective question
Concept attainment
Total
(Students securing less than 8 scores need remedial strategy or doubts
clarification)
Unit
Assessment
• General discussion on the basic • PPT showing the use of
concepts of spreadsheet functions and formulas
• Group discussion, project and • Notes on data entry, text
lab work on data entry, text management and cell
Unit test
management and cell formating formating

• General discussion on the • Prepared pivot table
preparation of pivot table
• Group discussion and Case • Report on various types of
study on common errors in errors commonly occurred in
spread sheet spreadsheet
TE Questions:
1. In cell C1 the bonus of a Worker is calculated as 6543.467. If we use the
formula
=ROUNDUP(C1,0), the displayed result will be:
(a) 6543 (b) 6540 (c) 6544 (d) 6500
203
2. An Excel worksheet contains the following data:
(a) Name the function used to display the address in F2.

(b) Give the formula used for this.
3. Give appropriate ‘COUNT’ Functions to calculate the missing figures in H4,
H5, H6 and H7.(Hint: use the details of columns ‘D’ and ‘F’ for calculations)
4. Explain the procedure for ‘naming’ the given data in range A2:G2, as ‘Gross
Salary’.
204
Unit
Use of Spread sheet in Business
3 Application
Introduction
Many companies use spreadsheets in varied ways within business
contexts on a daily basis. They are designed to store information
but in reality they do a lot more than that. Through preset and
user-defined formulas, spreadsheets can perform mathematical,
statistical, financial and organizational transformations on sets
of data. Spreadsheets also help business to present data in
organized ways and to create graphical visualizations and
ultimately in planning and future decision making.

Helps to inculcate skills for planning, organising and decision
making in daily life.

Payroll Accounting Suggested Strategy: • Describe the concept
- Payroll components General Discussion & Project of payroll accounting
- elements in payroll • Discussion on use of electronic and apply the knowl-
calculation spreadsheets in payroll preparation. edge in the develop-
- template design • Mini project to automate payroll ment of Spreadsheet
preparation of a given entity, say school application for com-
or banks, using spreadsheet may be given puting employee's
Assessment: gross pay and net
• Participation in Discussion and project pay.
work
• Understanding elements in payroll
calculation
• User interface facilities and various
reports available
Skills:
Communication, design, create
Asset Accounting Suggested Strategy: • Narrate the concept
- Basic concepts General Discussion & Project of Computerized As-
- Computerised • Discussion to recollect the concept of set Accounting and
Asset Accounting depreciation and various methods of apply the knowledge
- Straight line Method calculating depreciation in the development of
- Written Down • Discussion on the use of electronic Spread sheet appli-
Value Method spreadsheets in asset accounting. cation for computing
• Small project to automate management depreciation under
and accounting of assets for charging Straight Line Method
depreciation under various methods may and Written Down
be given value method
Assessment:
• Participation in Discussion and project
work
• Understanding in various methods of
charging depreciation
• Computerized Asset Accounting System
developed using spreadsheet.
• Reports prepared.
Skills:
Communication, design, create,
Loan Repayment Suggested Strategy: • Describe the con-
Schedule General Discussion & Project cept of calculating
- Calculating Interest • Discussion on the factors to be considered interest and repay-
and repayments of while calculating interest on loan ment of loan and ap-
Loan ply the knowledge in
206

• Application of spread sheet while the development of
calculating interest and repayment Loan Repayment
schedule of a loan Schedule using
• Project to calculate interest and Spread sheet
repayment of principal loan amount may
be given
Assessment:
• Participation in Discussion and project
work.
• Developing formula for calculating interest
and loan repayment installments.
• Schedule prepared
Skills:
Communication, design, create,
Computation of salary/wages of given employees

Suggested Strategy : Discussion
Teacher initiates a discussion in the classroom regarding the preparation of
payroll.
Discussion points
Foramting a sheet to design a template
Headings and Title (Name of Organisation, Month, Year etc)
Data input columns and their labels
Elements involved in the payroll
The salary of an employee is paid on the basis of pre determined rate , personnel
policies and contracts. The computation of salary of employees is based on
the following.
• Number of days worked
• rate of pay/grade pay/basic pay
• rate of applicable allowances
• Rate of applicable deductions or contributions.
Important aspects related to preparation of Pay roll.
1) Maintaining payroll related employee data
• Employee Code/ID
207
• Employee Name
• Daily Attendance
• Basic Pay
• Data relating to Allowances
• Data relating to various deductions
2) Periodic Payroll Computation
• Computation of earnings and deductions from basic values after
considering various types of leaves
3) Preparation of salary statement and salary slips
4) Generation of Pay roll related Bank Statement to transfer net pay to
employees bank account
Determination of Payroll Components
Earnings
Sl.No Components Short Form Meaning/Description
1 Basic Pay BP Basic Pay is the pay in the Scale of Pay
which is paid to an employee before any
extras are added or taken off
2 Grade Pay GP Pay added to Basic pay based on
applicable pay band and designation
3 Dearness Pay DP That portion of Dearness allowance
declared or merged with Basic Pay
4 Dearness DA Allowance allowed as a compensation for
Allowance erosion in purchasing power based on cost
of living index. The Dearness Allowance
(DA) is a cost of living adjustment
allowance
5 House Rent HRA This allowance is given to an employee
allowance to meet the rental expenses for his/ her
accommodation.
6 Transport TRA It is also known as Conveyance Allowance.
Allowance It provided to facilitate commuting i.e.
travel some distance between one’s home
and place of work on a regular basis
7 Other OA All other allowances other than above such
Allowances as Medical Allowance, Washing
Allowance, Uniform Allowance, Education
Allowance, Canteen Allowance etc
208
Deductions
Sl.No Components Short Form Meaning/Description
1 Provident PF It is a statutory deduction as per Provident
Fund Fund Act computed as a percentage of
Basic Pay + Dearness Pay
2 Professional PT Professional Tax is a statutory deduction
Tax charged by the state governments in India
based on theincome of the individual
3 Tax Deduction TDS It is a means of collecting income tax as a
at Sourse montly deduction apportioned over 12
months
4 Recovery of LOAN An amount signified to be deducted on
Loan account of any loan taken by an employee,
Instalment say from PF Loan, Housing Loan amount
etc
5 Any Other AOD Any other deductions such as Festival
Deduction adavnace, LIC premium, etc
Elements Used in Payroll Calculation
Sl.No Components Short Form Calculation Remarks
1 Basic Pay BPE BP*NOEDP/NOM BP X No. of Effective
Earned Days Present / No. of
Days in a Month
2 Dearness DA BPE*Rate of DA DA is usually a
Allowance percentage of BP (say
80% of BP)
3 House Rent HRA BPE*Rate of HRA HRA may be a fixed
Allowance or Fixed Amount amount say Rs 250
4 Transport TRA A fixed amount or TRA may be a fixed
Allowance a percentage amount
5 Hill Tract HTA Fixed Amount or
Allowance a percentage
6 Total TE BPE+DA+HRA+ Sum of Sl.No 1 -5
Earnings TRA+HTA+AOE
209
7 Provident PF BPE*PF rate

Fund
8 Tax TDS Fixed Amount
Deduction at deducted every
Source month
9 Recovery of LOAN Fixed Amount
Loan deducted every
Installment month
10 Total TD PF+TDS+LOAN+ Sum of all
Deductions PT+AOD deductible amounts
11 GROSS GROSS BPE+DA+HRA+ Add all Earning to
SALARY PAY TRA+HTA+AOE BPE, but no
deduction is made
EXAMPLE
The following infromations pertain to the employees of Adithya Infotec,
Thiruvanamthapuram. Prepare a pay roll for the given month
SL.NO NAME EMP Basic Leave PF Loan
1 Kumar MGR(Manager) 45000 0 0
2 Mathew SPR(Supervisor) 35000 0 2500
3 Thomas MGR(Manager) 40000 5 4000
4 Rajeev MGR(Manager) 42000 2 3000
5 Remesh SPR(Supervisor) 25000 0 0
6 Anoop SPR(Supervisor) 24000 3
7 Adithyan SPR(Supervisor) 25000 0
Avinash WKR(Worker) 15000 3 2500
9 Anjally WKR(Worker) 15000 2
10 Allka WKR(Worker) 15000 1
TDS BONUS
MGR 1500 10% BP
SPR 1000 15 % of BP
WKR 250 20 % BP
210
Solution
Step 1 Create as spreadsheet template as follows
Step 2 Select cell F14 write the formula =(D14/$H$7)*($H$7-E14) (BP/Days in

month*(days in month-Leave). Drag Fill handle down to copy the formula to
remaining cells
Step 3 Select cell G14 Enter the formula for DA =F14*$H$8 ( Effecive BP*80%)
Step 4 Select cell H14 and type formula for HRA
IF(C14=”MGR”,F14*$J$7,IF(C14=”SPR”,F14*$J$8,IF
(C14=”WKR”,F14*$J$9)))
Or
=IF(C14=$I$7,F14*$J$7,IF(C14=$I$8,F14*$J$8,IF(C14=$I$9,F14*$J$9)))
Drag Fill handle down to copy the formula to remaining cells
Step 5 Select cell I14 type the formula for HTA
=IF(C14=$I$7,$M$7,IF(C14=$I$8,$M$8,IF(C14=$I$9,$M$9)))
Step 6 Select cell J14 and type formula for Bonus
=IF(C14=$I$7,F14*$L$7,IF(C14=$I$8,F14*$L$8,IF(C14=$I$9,F14*$L$9)))
Step 7 Select cell K14 and write formula for Gross salary
=SUM(F14:J14)
Step 8. Select cell L14 and write formula for TDS
=IF(C14=$I$7,$K$7,IF(C14=$I$8,$K$8,IF(C14=$I$9,$K$9)))
Step 9. Select Cell N14, type formula for Total deductions
= SUM(L14:M14)
Step 10 Select cell O14, type formula for Net salary
=K14-N14
211

Tip You can enter name of Month in Cell H6 and use the following formula
to automatically find the number of days in a month i.e in cell H7.
=IF(H6=”January”, 31,IF(H6=”February ”, 28,IF(H6=”March”, 31,
IF(H6=”April”,30, IF(H6=”May”,31, IF(H6=”June”,30, IF(H6=”July”,31,
IF(H6=”August”,31, IF(H6=”September”,30, IF(H6=”Octobar”,31,
IF(H6=”November”,30, IF(H6=”December”,31))))))))))))
Similarly the formula =”PAY ROLL FOR THE MONTH OF “&H6
can be used to display the Title , say “ Pay Roll For the month of
Self Assessment:
Yes / No Remarks
i. I know the use of spread sheet in asset accounting
ii. I need remedial measures on (............)
212
Unit
Assessment
• General discussion on Payroll • Notes showing the
accounting - components, components and elements of
elements and template design pay roll accounting
• General discussion on asset • List showing the formulas
Unit test
accounting and various types of involved in the calculation of
preparation of depreciation depreciation under various
statements methods
• General discussion and project • Output showing the
on the preparation of loan preparation of loan
repayment schedule repayment schedule
TE Questions:
1. Identify the cell where the salvage value of asset is entered, from the given
formula’=SLN(D5,D6,D7).
(a) D5 (b) D6 (c) D7 (d) None of these
2. A worksheet particulars for calculating depreciation under written down value
method is given below:
(a) Name the function used for the calculation of depreiation.

(b) Give the formula for calculating depreciation b y using appropriate cell
references.
213
3. Observe the following payroll statement:
Give appropriate formula to calculate the following missing figures:

(a) DA 73% of Basic Pay
(b) Gross pay
(c) Total deduction, which includes PF and GIS.
(d) Net Pay
4. Following is the syntax of a Function used for calculations in MS Excel:
=PMT(Rate,Nper,pv,fv,type)
(a) State the use of this Function.
(b) Explain the parameters given in the Function.
214
Unit
4 Graphs and Charts for Business

Data
Introduction
Business reporting is not always easy. Often, we may get
swamped down in long, boring paper work reports that nobody
wants to read. We should think of a business intelligence tool
which allows one to present information in an intelligent and
meaningful manner. We can effectively use one of such built in
facilities provided by electronic spread sheets to present business
data i.e. graphs and charts. When business data is presented in
charts and graphs it is easier to understand and interpret the
data. In turn this makes the business reporting process much
easier and meaningful and the business reporting process can
be simplified and improved. In this unit we will address the use
of graphs and charts for presenting business data.

Helps to develop skills of presentation of facts in suitable ways
as demanded by the situation.

Graphs and Charts Suggested Strategy: • Illustrate the data in
- Basic steps for Group Discussion & case study and graphical form in
graphs/charts/dia Lab work charts and diagrams
grams using excel • A group discussion can be initiated on the using MS Excel
- Elements of graph use of electronic spreadsheets in report
and chart visualization.
- Formatting of chart • Reflective questions to elicit different
types of graphs that can be prepared
• Sufficient examples of data can be given
and ask them how they can be plotted in
graphs or can be represented through
diagrams.
Assessment:
• Creativity
• Analysis of each steps for the preparation
of graph & charts
• Output in lab work/records other products
Skills:
ICT Skills
Types of charts Suggested Strategy: • State and apply the
- Changing chart type Group Discussion & case study and techniques of chang-
- Resizing of chart Lab work ing lay out, types and
graph • A group discussion can be initiated in the models of graphs and
- 2D-3D charts/ class room regarding various types of charts for represent-
graphs charts. ing business data us-
- Advantages in using • Case study on changing types of graphs ing spread sheet
graph & charts & charts resize, convert to 2D- 3D
visualizations • Describe the use of
• Notes on conveniences of pictorial accounting/business
representation of business data data for graphical
Assessment: representation.
• Involvement in discussion and lab work
• Preparation of graph & charts
Skills:
ICT Skills
216
Elements of chart or Graph:

ICT facilities may be used to display a prepared chart in MS Excel, as given
below
Lead questions may be asked to identify the various elements of the chart:
• what is the title of this chart?
• What is the range of this chart?
• Is the chart is plotted in the full area, ie,C1:J16?
• Where the diagram bars are indicated with special symbols?
•
•
Based on the answers to each question, teacher may help them to explain the
different elements of a chart or graph.
1. Chart Title:
The name of the chart is displayed at the top of the chart. Usually the column
217
heading of the values are shown as the chart title by default. We may change
the name by click on to the chart title.
2. Chart area;
The entire chart including all elements is termed as chart area. In the given
chart ‘C1:J16 is the chart area. It is the area within the rectangular outline.
3. Plot area:
It is the area bounded by the X and Y axis. In this example, it is around D3:I8,
where the chart is actually plotted.
4. Data Series:
Individual values plotted in a chart are called data markers. It may be of

different shapes. Data markers of the same colour or pattern is called a data
series.
5. Legend:
The identification of data series is possible through giving legends. It is the

identifier of a piece of information shown in the chart.
6. Horizontal axis:
The X axis called horizontal axis. This line indicates the categories or values.
In this example, Sales figures are shown in the horizontal axis.
7. Vertical axis;
The Y axis is called vertical axis. This line indicates data or dependent values.
In this example, Months are shown in vertical axis.
8. Grid lines:
The parallel lines to vertical axis are called grid lines. It increases the readability
of a chart.
218
Teacher Assessment
No Attributes No of students
1 Number of participants actively engaged in the
discussion
2 Timely completion of discussion
3 Attainment of concept during the process of
discussion
4 Students need further help
5 Students were able to explain the concept
Unit
Assessment
• Group discussion on the steps • Notes showing the steps
involved in the preparation of involved in the preparation of
Unit test
graphs and charts graphs and charts

• Group discussion on different • Notes showing the
types of graphs/ charts and conveniences of using charts
advantages on its preparation and graphs
219
TE Questions:
1. In MS Excel,graphs and charts are available in…………………………..tab,
under……………….group.
(a) Home, Charts (b) Insert, Charts
(c) Insert, Tables (d) Data, Illustrations
2. ……………….. is an identifier of a piece of information shown in a chart.
(a) Plot area (b) Data Points
(d) Vertical axis (d) Legend
3. Explain the steps in creating a pie chart.
4. Distinguish between a pie chart and a doughnut chart.
220
Unit
5 Accounting Software Package:

Tally
Introduction
Recording of business transactions, its storage and retrieval are
the important functions of any accounting software. Among the
available ones, Tally occupies a unique position for superiority.
It is both ready to use as well as tailor made. So it is equally
good for any kind of business organizations irrespective of their
scale of operations. After going through the chapter, the student
shall be able to develop skills to input transactions by creating
ledger accounts and display the financial statements

Helps to make transparent dealings and recordings in the day-
to-day activities

Steps in Installation of Suggested Strategy : Brain storming • Describe and dem-
CAS • Teacher may make use of the technique onstrate installation
- of brain storming so as to elicit student of Computerised Ac-
responses as to how windows/ counting System.
Encyclopedia/game or similar software
are installed in their PCs .
• Based on student responses teacher may
conclude that Tally software is also
installed in the same manner.
• Teacher may also provide them a real or
firsthand experience by running the
installation CD with the help of an LCD
Projector in the Lab/Class room/Smart
Room. (Teacher may also select a
student(s) to demonstrate installation)
Assessment:
• Participation in brain storming
• Understanding in each step in installation.
Skills:
Communication, demonstrate, evaluate,
ICT Skills
Use of Accounting Suggested Strategy :
Software Group Discussion & project and Lab • Describe the fea-
- Gateway of Tally work tures of Tally ac-
- Company Creation • Group discussion may be initiated tally counting software
- Chart of Accounts accounting package and its different such as grouping of
& Grouping modules related to accounting systems in accounts, codifica-
- Account Master the package. tion, Account Mas-
- Voucher Entry • Projects may be assigned in groups to see ters, voucher entry
- Trial Balance how the features of accounting packages etc.
- B/S and P&L a/c are implemented in tally.
- Display of Reports Assessment: • Create company and
• Participation in discussion & working with books of accounts
project
• Understanding tally features and how the • Construct Trial bal-
features of accounting packages are ance, Trading and
implemented in tally. P&L account and a
• Project report & findings Balance sheet and
• Output in lab work/records other products other reports
Skills:
Communication, classify, design, create,
organise , construct ,develop, ICT Skills
222

Bank Reconciliation Suggested Strategy: • Prepare a bank Rec-
Statement General Discussion & small project onciliation Statement
and Lab work as on date
• Recollect on the preparation of Bank
reconciliation Statement
• Introduce various steps to be followed in
the construction of BRS in Tally with the
help of PPT
Assessment:
• Participation in discussion & working with
project
• Understanding steps to construct BRS
• Project report & findings
• Output in lab work/records
Skills:
Communication, classify, , appraise,
discriminate , evaluate, interpret, ICT Skill
Need and Security Fea- Suggested Strategy : Brain Storming • Create company and
ture of the System • Through brain storming technique student books of accounts
- Password responses may be elicited on safety,
- Data Audit security and threats in the use of • Construct Trial bal-
- Data Vault accounting software and the means ance, Trading and
available to overcome such threats. P&L account and a
Assessment: Balance sheet and
• Participation in brain storming other reports
• Understanding concepts like security
password, data audit, data vault etc
• Lab work/records
Skills:
Communication, appraise, implement,
justify, critique, solve, ICT Skill
223
Creation of ledger accounts:

Suggested Strategy – Case study
Harees, a sole trader in ready wares gives a summary of his transactions for
the month of September 2015.
01/09/2015 Additional capital brought in Rs.50,000
02/09/2015 Opened a current account with SBI and remitted Rs.30,000
03/09/2015 Purchased readymade shirts for Rs.40,000 from yousuf
04/09/2015 Returned some spoiled shirts to yousuf Rs.10,000
05/09/2015 Paid yousuf Rs.15,000
07/09/2015 Cash Sales Rs.30,000
08/09/2015 Credit sales to Fathima Rs.10,000
Discussion Points:
a. Accounts involved in each transaction
b. Classification of accounts as capital, liability, income, expense and
assets
c. Classification of expenses under direct and indirect head
The above discussion points may be presented in a table format so that students
can identify the accounts, find out debit and credit aspects and group them
After discussion and filling up of the blanks in the table teacher explains in
brief the need for doing the above exercise which will provide them a strong
base for relating their knowledge to computerized accounting.
Teacher Assessment
Identify the respective ledger from the transaction Ledgers
a. Paid into bank ?
b. Withdrawn from bank for personal use ?
c. Furniture taken for personal purpose from business ?
224
Unit
Assessment
• Brain storming on the process of • Note on the installation of
installation of CAS Tally software
• Group discussion, project and • Report on the preparation of
lab work on the use of an final accounts ·
accounting software • Out put - Trading and profit
Unit test
and loss a/c and Balance
Sheet
• Project work on the Bank • Report on the prepartaion of
Reconciliation Statement BRS
• Brainstorming on the need of • Notes on the data vault,
security feature of accounting passwords, tally audit
system features
TE Questions:
1. Which function key is used for BRS?
a. F6 b. F5 c. F9 d. F11
2. In which group can the following items of accounts be included:
a. Prepaid Insurance
b. Commission received in advance
c. Loose tools
d. Live stock
e. Salary outstanding
f. Patents
g. Copy rights
3. Prepare necessary day books for the following transactions:
01/04/2015 Started business with cash Rs.50, 000
02/04/2015 Paid salary Rs.10, 000
225
03/04/2015 Purchased goods from kumar Rs.7, 000

04/04/2015 Returned to kumar Rs.100
05/04/2015 Cash sales Rs.10, 000
06/04/2015 Commission received in advance Rs.3, 000
07/04/2015 Paid wages Rs.500
4. Explain the steps for Bank Reconciliation Statement?
226
Unit
6 Database Management System

For Accounting
Introduction
Think of the overwhelming/prodigious/massive quantity of data
produced in every minute in an organization? Isn't risky to track
or manipulate such voluminous data in traditional paper filing
system or even in the form of electronic spreadsheets. This is
mainly because there was a jump from KB's & MB's to GIGA's &
TERA's of data to handle. A simple solution to this situation is
the use of a DBMS. The ultimate purpose of a DBMS is to store
and retrieve data and transform data into information to support
decision making. Many software tools such as MS Access, Oracle,
SQL Server etc are used for this purpose. In this unit we learn
MS Access program for developing some practical accounting
applications.
Helps in developing a data base in their life situations.

Understanding and de- Suggested Strategy: • Define the require-
fining the database re- General Discussion ments that are ex-
quirement. • General discussion with focus on the pected from the da-
following aspects may be carried out tabase application
• database requirement
• whether desktop or server database
• quantum of data to be stored
• nature and type of data to be stored
• frequency of data capture/modification
• Hardware and OS requirements
Assessment:
• Participation in the discussion
• Understanding of concepts
Skills:
Communication, appraise, evaluate,
Compare
Identification of data to Suggested Strategy: • Explain how to iden-
be stored in Tables Group Discussion & project and Lab tify data to be stored
Logical Structuring of work in tables and develop
Data in Tables • Teacher may initiate a group discussion a suitable framework
in the class room regarding the data to
- field/entities store in tables. Give focus on the following • State different ways
- attribute o recalling framework for storing data in MS to structure database
- record Excel as per requirement
- database design o how to store various attributes in data
- key fields tables
- primary key o database design- number of tables
- defining entity rela- o data types
tions o entity relations
• A project may be assigned in groups to
develop a framework and logically
structure data in tables
Assessment:
• Participation in discussion/ lab work
• Understanding in each steps in identifying
data to be stored, developing suitable
framework, logical structuring
Skills:
228

Creating MS Access Suggested Strategy: • Design and create
Components: Group Discussion & project and Lab MS Access compo-
- Tables work nents such as tables,
- Forms • Discussion on the components of Ms forms, queries, and
- Queries Access reports.
- Reports • Project work on the creation of MS
Access components. • Make use of MS Ac-
• The discussion may be consolidated with cess for developing
the help of a PPT presentation. simple database ap-
• Demonstrate various steps of creating plications for captur-
tables , forms queries etc live over an ing, storing and re-
LCD projector trieving data.
• Students may be directed to continue
working with the previous project and
submit a report.
Assessment:
• Participation in discussion/ lab work.
• Understanding in concepts such as tables,
forms, queries, reports
• Understanding each steps in creating
components
• Other material/products
Skills:
229
CREATION OF TABLE
SUGGESTED STRATEGY: GENERAL DISCUSSION
Teacher initiates discussion by recalling the different components of a Data
Table and various data types used in Access. Teacher illustrates a suitable
example for discussing the different steps in the table creation.
If we need to form a data base for the students of this class, what all details to
be included in table?
• Class Number
• Name of Student
• Sex
• Date of Birth
• Category (SC/ST/OEC/OBC/General)
• Phone Number
•
Teacher collects the required details of first five students of the class and
displays them in the black board.
Student ID Name Sex Date Dirth Category Pnone No.
Teacher helps the students to prepare an Access file for entering the student
details of the class. The Procedures may be made clear by live demonstration
in the classroom.
Step-1, Database files creation
Click on Start’ → All Programmes ’ → Microsoft Office ’ →
MS Access 2007 ’ → Click on New Blank database
Enter file name as “Student Details”
Click on “Create”, then a data base file “Student_Details.accdb” is created.
230
Step: 2, Table creation

Click on “Create”
Click on “Table Design”
Enter the details in the table
Enter the attributes such as SID, SNAME, SSEX, SDOB,SCAT and SPH in the
column Field Name.
Choose the appropriate data type for the attributes. (Sex and Category may be
given as ‘Lookup Wizard’
Give the description, if needed.
Then the table will be as shown below:
Step-3, Setting Primary Key

Click at the field to be specified as primary key. Here, SID can be the primary key. Right
click on the field SID. A new window appears in the screen. Click on Primary key. (or
click on primary key in the Ribbon. Then, a key symbol appears on the left of SID.
231
Step-4, saving the table

Click on “Office Button”
Click on “Save”
Enter the name “TABLE_STUDENT” in Table Name and Click ‘OK’, in the
appeared window.
Click on Close Button(X) to close the table.

Teacher Assessment
Procedure of Level of Attainment
Table Creation Excellent Average Need Improvement
(No. of students) (No. of students) (No. of students)
Step-1
Step-2
Step-3
Step-4
Remedial measures Teacher Assistance Peer interaction Reference of Books
taken by students (No. of students) (No. of students) (No. of students)
who need
improvement
232
Unit
Assessment
• General discussion on the • Note on the OS requirement
concept of database requirement and nature and types of data
• Group discussion, project and to be stored
lab work on logical structuring • Report on project
of data and storage of data • Out put - Database design
Unit test
• Project work/ discussion on • Report on the prepartaion of
creating database components various database
components
TE Questions:
1. Fill up the blanks with proper voucher type:
Field Data Type
Name ?
Date of Birth ?
Basic Pay ?
Department ?
Designation ?
2. Explain the steps one has to follow for making a Table under design mode?
3. Forms in Ms Access help in data ………………
a. Retrieval b. Query c. Report d. Input
4. Explain the steps required in Ms Access to display names of persons who
draw salary exceeding Rs.10,000
Arun - Rs.18,000
Anil - Rs.12,000
Thomas - Rs. 9,000
Devakumar - Rs.32,000
Bino Joy - Rs.8, 000
233

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A ccountancy

C.H. Arunkumar Anil Gomaz

standards. International standards do not refer to the standard of

Kerala School Curriculum (2013) - Chief characteristics

l is intended to inculcate human values in the learners.

and research in the field of arts has to be developed in them. In

l To create the right understanding about sexual health.

Life Skill Education

not just for the benefit of mankind. An understanding regarding

l My opinions are given due respect and value.

knowledge, but as a facilitator who co-ordinates the various

Code of Professional Ethics for School Teachers

Process Page Assessment Page

Extended Activities and Remedial Measures - Hints

Teacher Planner. All learners have to be assessed and recorded with

end of each term and learners should be categorised on the basis of

Advantages of open-book Assessment

CATEGORY/ ALTERNATIVE TERMS

3.2. Implementing using (e.g. Select the appropriate given situation

learners should be given the opportunity to get a proper awareness

opportunity at least once in a month to participate in such activities.

The formats for assessment are given as Annexure I and II.

Approach: An approach that focuses learning outcomes

Cognitive Area Socio - Emotional Area

of pupil but provides a basic understanding of the various princi-

community at large. The learning activities have to be organized in

There is a saying - "The accountant is the person, an entrepreneur is

2013 puts forth that these skills can be developed through

essence of teaching and learning of commerce.

foundation in basic accounting principles and methodology and

II State the Objectives

This can be done through a discussion in the class.

ments include preparation of notes, preparation of charts, models,

7. Seminar paper presentation

5. Field trip/ Study tours

to understand the real life situation. However there is slight differ-

Brain storming Rules

Steps in brain storming

1 Presentation of the problem

Case may be presented by the teacher or may be provided in print

4. Activity Log in Accountancy

Teacher Text of Accountancy

3.8 Adjustment of capitals

Part - B - Analysis of Financial Statements

1.9. Issue of shares at premium and discount

3.2. Form and content of Balance Sheet of companies

5.6. Interest coverage ratio

Part - C - Computerised Accounting

2.7. Two variable Data Table

5.14. Display Report

6.1. Understanding and Defining database Requirement

3. Reconstitution of partnership firm – Admission of a

3.4 Describe goodwill and enumerate the factors affecting it

4. Reconstitution of partnership firm – Retirement / Death of

5. Dissolution of Partnership Firm

ANALYSIS OF FINANCIAL STATEMENTS

1. Accounting for Share Capital

2. Issue and Redemption of debentures

3. Financial Statement of a Company

4. Analysis of Financial Statements

6. Cash flow Statement

1. Overview of computerized Accounting System

3. Use of Spread sheet in Business Applications

4. Graphs and Charts for Business Data