Accounting for Not-for-Profit Organizations and Partnership Firms

Unit I: Accounting Not-for-Profit Organisation

• Not-for-profit organization: Meaning and Examples.
• Receipts and Payments: Meaning and Concept of Fund-based and non-fund-based accounting.
• Preparation of Income and Expenditure Account and Balance sheet from receipt and payment account with additional information.

Unit II: Accounting for Partnership

• Nature of Partnership Firm: Partnership deed (meaning, importance).
• Final Accounts of Partnership: Fixed v/s Fluctuating capital, Division of profit among partners, Profit, and Loss Appropriation account.

Unit III: Reconstitution of Partnership

• Changes in profit sharing ratio among the existing partners – Sacrificing ratio and Gaining ratio.
• Accounting for Revaluation of Assets and Liabilities and Distribution of reserves and accumulated profits.
• Goodwill: Nature, Factors Affecting and Methods of Valuation: Average profit, Super profit, Multiplier, and Capitalization methods.
• Admission of a Partner: Effect of admission of a partner, Change in profit sharing ratio, the Accounting treatment for goodwill, Re-evaluation of assets and liabilities, Reserves (accumulated profits), and Adjustment of capital.
• Retirement/Death of a Partner: Change in profit sharing ratio, Accounting treatment of goodwill, Re-evaluation of assets and liabilities, Adjustment of accumulated profits (Reserves).

Unit IV: Dissolution of Partnership Firm

• Meaning, Settlement of accounts: Preparation of realization account and related accounts (excluding piecemeal distribution, sale to a company, and insolvency of a Partner)

Company Accounts and Financial Statement Analysis

Unit V: Accounting for Share and Debenture Capital

• Share Capital: Meaning, Nature, and Types.
• Accounting for Share Capital: Issue and Allotment of Equity and Preference Shares; Over subscription and Under subscription; Issue at par, premium, and at discount; Calls in advance, Calls in arrears, Issue of shares for consideration other than cash.
• Forfeiture of Shares: Accounting treatment, Re-issue of forfeited shares.
• Presentation of shares and Debentures Capital in the company’s balance sheet.
• Issue of Debenture – At par, premium, and discount; Issue of debentures for consideration other than cash.
• Redemption of the debenture. Out of proceeds of fresh issue, accumulated profits, and sinking fund.

Unit VI: Analysis of Financial Statements

• Financial Statements of a Company: Preparation of simple financial statements of a company in the prescribed form with major headings only.
• Financial Analysis: Meaning, Significance, Purpose, Limitations.
• Tools for Financial Analysis: Comparative statements, Common size statements.
• Accounting Ratios: Meaning and Objectives, Types of Ratios:
  • Liquidity Ratios: Current ratio, Liquidity ratio.
  • Solvency Ratio: Debt to equity, Total assets to debt, Proprietary ratio.
  • Activity Ratio: Inventory turnover, Debtors turnover, Payables turnover, Working capital turnover, fixed assets turnover, Current assets turnover.
  • Profitability Ratio: Gross profit, Operating ratio, Net profit ratio, Return on Investment, Earning per Share, Dividend per Share, Profit Earning ratio.

Unit VII: Statement of Changes in Financial Position

• Cash Flow Statement: Meaning and Objectives, Preparation, Adjustments related to depreciation, dividend and tax, sale and purchase of non-current assets (as per revised standard issued by ICAI).

Computerized Accounting System

Unit I: Overview of Computerized Accounting System

• Concept and Types of Computerized Accounting System (CAS).
• Features of a Computerized Accounting System.
• Structure of a Computerized Accounting System.

Unit II: Using a Computerized Accounting System

• Steps in the installation of CAS, Preparation of Chart of Accounts, Codification, and Hierarchy of account heads.
• Data entry, Data validation, and Data verification.
• Adjusting entries, Preparation of Financial Statements, Closing entries, and Opening entries.
• Security of CAS and Security features are generally available in CAS (Students are expected to understand and practice the entire accounting process using an accounting package.)

Unit III: Accounting Using Database Management System (DBMS)

• Concepts of DBMS. Objects in DBMS: Tables, Queries, Forms, Reports.
• Creating data tables for accounting.
• Using queries, forms, and reports for generating accounting information. Applications of DBMS in generating accounting information such as shareholders’ records, sales reports, customers’ profiles, suppliers’ profiles payroll, employees’ profiles, and petty cash registers.

Unit IV: Accounting Applications of Electronic Spreadsheet

• Concept of an Electronic Spreadsheet (ES).
• Features offered by Electronic Spreadsheet.
• Applications of Electronic spreadsheets in generating accounting information, preparing depreciation schedules, loan repayment schedules, payroll accounting, and other such companies.