CBSE Class 12th Accountancy Syllabus 2023

Units/Topics

Learning Outcomes

• Partnership: features, Partnership Deed. ·
• Provisions of the Indian Partnership Act 1932 in the absence of partnership deed. ·
• Fixed v/s fluctuating capital accounts. Preparation of Profit and Loss Appropriation account- division of profit among partners, guarantee of profits. ·
• Past adjustments (relating to interest on capital, interest on drawing, salary and profit sharing ratio). ·
• Goodwill: meaning, nature, factors affecting and methods of valuation – average profit, super profit and capitalization.

Note: Interest on partner’s loan is to be treated as a charge against profits.

Goodwill: meaning, factors affecting, need for valuation, methods for calculation (average profits, super profits and capitalization) , adjusted through partners capital/ current account or by raising and writing off goodwill (AS 26)

Accounting for Partnership firms – Reconstitution and Dissolution. ·

• Change in the Profit Sharing Ratio among the existing partners – sacrificing ratio, gaining ratio, accounting for revaluation of assets and reassessment of liabilities and treatment of reserves, accumulated profits and losses. Preparation of revaluation account and balance sheet. ·
• Admission of a partner – effect of admission of a partner on change in the profit sharing ratio, treatment of goodwill (as per AS 26), treatment for revaluation of assets and reassessment of liabilities, treatment of reserves, accumulated profits and losses, adjustment of capital accounts and preparation of capital, current account and balance sheet. ·
• Retirement and death of a partner: effect of retirement / death of a partner on change in profit sharing ratio, treatment of goodwill (as per AS 26), treatment for revaluation of assets and reassessment of liabilities, adjustment of accumulated profits, losses and reserves, adjustment of capital accounts and preparation of capital, current account and balance sheet. Preparation of loan account of the retiring partner. ·
• Calculation of deceased partner’s share of profit till the date of death. Preparation of deceased partner’s capital account and his executor’s account. ·
• Dissolution of a partnership firm: meaning of dissolution of partnership and partnership firm, types of dissolution of a firm. Settlement of accounts – preparation of realization account, and other related accounts: capital accounts of partners and cash/bank a/c (excluding piecemeal distribution, sale to a company and insolvency of partner(s)).

Note: 

(i) If the realized value of tangible assets is not given it should be considered as realized at book value itself.

(ii) If the realized value of intangible assets is not given it should be considered as nil (zero value). (iii) In case, the realization expenses are borne by a partner, clear indication should be given regarding the payment thereof.

After going through this Unit, the students will be able to: · 

• state the meaning of partnership, partnership firm and partnership deed. ·
• describe the characteristic features of partnership and the contents of partnership deed. ·
• discuss the significance of provision of Partnership Act in the absence of partnership deed. ·
• differentiate between fixed and fluctuating capital, outline the process and develop the understanding and skill of preparation of Profit and Loss Appropriation Account. ·
• develop the understanding and skill of preparation profit and loss appropriation account involving guarantee of profits. ·
• develop the understanding and skill of making past adjustments. ·
• state the meaning, nature and factors affectin goodwill ·
• develop the understanding and skill of valuation of goodwill using different methods. ·
• state the meaning of sacrificing ratio, gaining ratio and the change in profit sharing ratio among existing partners. ·
• develop the understanding of accounting treatment of revaluation assets and reassessment of liabilities and treatment of reserves and accumulated profits by preparing revaluation account and balance sheet. ·
• explain the effect of change in profit sharing ratio on admission of a new partner. ·
• develop the understanding and skill of treatment of goodwill as per AS-26, treatment of revaluation of assets and re-assessment of liabilities, treatment of reserves and accumulated profits, adjustment of capital accounts and preparation of capital, current account and balance sheet of the new firm. ·
• explain the effect of retirement / death of a partner on change in profit sharing ratio. ·
• develop the understanding of accounting treatment of goodwill, revaluation of assets and re-assessment of liabilities and adjustment of accumulated profits, losses and reserves on retirement / death of a partner and capital adjustment. ·
• develop the skill of calculation of deceased partner’s share till the time of his death and prepare deceased partner’s and executor’s account. ·
• discuss the preparation of the capital accounts of the remaining partners and the balance sheet of the firm after retirement / death of a partner. ·
• understand the situations under which a partnership firm can be dissolved. ·
• develop the understanding of preparation of realisation account and other related accounts.