All India Accountancy Oxyopia (AIAO) SYLLABUS FOR CLASS 12 - National Level Talent Search Examination

INTRA SCHOOL ROUND (First Round)

INTRODUCTION TO ACCOUNTING

Accounting: objectives, advantages and limitations, types of accounting information; users of accounting information and their needs.
Basic accounting terms: business transaction, account, capital, drawings, liability (Non – current and current); asset (Non – current; tangible and intangible assets and current assets), receipts (capital and revenue), expenditure (capital, revenue and deferred), expense, income, profits, gains and losses, purchases, purchases returns, sales, sales returns, stock, trade receivables (debtors and bills receivable), trade payables (creditors and bills payable), goods, cost, vouchers, discount – trade and cash.

THEORY BASE OF ACCOUNTING

Fundamental accounting assumptions: going concern, consistency, and accrual.
Accounting principles: accounting entity, money measurement, accounting period, full disclosure, materiality, prudence, cost concept, matching concept and dual aspect.
Bases of accounting – cash basis and accrual basis.
Accounting Standards and IFRS (International Financial Reporting Standards): Concept and Objectives

RECORDING OF TRANSACTIONS

Accounting equation: analysis of transactions using accounting equation.
Rules of debit and credit: for assets, liabilities, capital, revenue and expenses
Origin of transactions- source documents (invoice, cash memo, pay in slip, cheque), preparation of vouchers – cash (debit and credit) and non cash (transfer).
Books of original entry: format and recording – Journal.
Cash Book: Simple Cash Book, Cash Book with Discount Column and Cash Book with Bank and Discount Columns, Petty Cash Book.
Other books: purchases book, sales book, purchases returns book, sales returns book and journal proper.

PREPARATION OF BANK RECONCILIATION STATEMENT, LEDGER AND TRIAL BALANCE.

Bank reconciliation statement- calculating bank balance at accounting date: need and preparation. Corrected cash book balance.
Ledger – format, posting from journal, cash book and other special purpose books, balancing of accounts.
Trial balance: objectives and preparation (Scope: Trial Balance with balance method only)

DEPRECIATION, PROVISIONS AND RESERVES

Depreciation: concept need and factors affecting depreciation; methods of computation of depreciation: straight line method, written down value method (excluding change in method)
Accounting treatment of depreciation: by charging to asset account, by creating provision for depreciation/ accumulated depreciation account, treatment of disposal of asset.
Provisions and reserves: concept, objectives and difference between provisions and reserves; types of reserves- revenue reserve, capital reserve, general reserve and specific reserves.

ACCOUNTING FOR BILLS OF EXCHANGE

Bills of exchange and promissory note: definition, features, parties, specimen and distinction.
Important terms : term of bill, due date, days of grace, date of maturity, discounting of bill, endorsement of bill, bill sent for collection, dishonour of bill, noting of bill, retirement and renewal of a bill.
Accounting treatment of bill transactions.

RECTIFICATION OF ERRORS

Errors: types-errors of omission, commission, principles, and compensating; their effect on Trial Balance.
Detection and rectification of errors; preparation of suspense account.

FINANCIAL STATEMENTS OF SOLE PROPRIETORSHIP

Financial Statements: objective and importance.
Profit and loss account: gross profit, operating profit and net profit.
Balance Sheet: need, grouping, marshalling of assets and liabilities.
Adjustments in preparation of financial statements : with respect to closing stock, outstanding expenses, prepaid expenses, accrued income, income received in advance, depreciation, bad debts, provision for doubtful debts, provision for discount on debtors, manager’s commission, abnormal loss, goods taken for personal use and goods distributed as free samples.
Preparation of Trading and Profit and Loss Account and Balance Sheet of sole proprietorship.
Incomplete records: use and limitations. Ascertainment of profit/loss by statement of affairs method.

FINANCIAL STATEMENTS OF NOT-FOR-PROFIT ORGANIZATIONS

Not-for-profit organizations: concept.
Receipts and Payment account: features.
Income and Expenditure account: features. Preparation of Income and Expenditure account and Balance Sheet from the given Receipts and Payments account with additional information.

COMPUTERS IN ACCOUNTING

Introduction to Computer and Accounting Information System {AIS}: Introduction to computers (Elements, Capabilities, Limitations of Computer system),
Introduction to operating software, utility software and application software. Introduction to Accounting Information System (AIS), as a part of MIS
Automation of Accounting Process. Meaning
Stages in automation

(a) Accounting process in a computerised environment (Comparison between manual accounting process and Computerised accounting process.)

(b) Sourcing of accounting Software (Kinds of software: readymade software; customised software and tailor-made software; Generic Considerations before sourcing accounting software)

(d) Generation of reports -Trial balance, Profit and Loss account and Balance Sheet.

INTER SCHOOL ROUND (Second Round)

ACCOUNTING FOR PARTNERSHIP FIRMS

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: nature, factors affecting and methods of valuation – average profit, super profit and capitalization.

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 and accumulated profits. 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 and accumulated profits, adjustment of capital accounts and preparation of 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 and reserves, adjustment of capital accounts and preparation of 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, executor‟s account and preparation of balance sheet.

Dissolution of a 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)).

ACCOUNTING FOR COMPANIES

Accounting for Share Capital

Share and share capital: nature and types.

Accounting for share capital: issue and allotment of equity shares, private placement of shares, Employee Stock Option Plan (ESOP). Public subscription of shares – over subscription and under subscription of shares; issue at par and at premium, calls in advance and arrears (excluding interest), issue of shares for consideration other than cash.

Accounting treatment of forfeiture and re-issue of shares.

Disclosure of share capital in company‟s Balance Sheet.

Accounting for Debentures

Debentures: Issue of debentures at par, at a premium and at a discount. Issue of debentures for consideration other than cash; Issue of debentures with terms of redemption; debentures as collateral security-concept, interest on debentures.

Redemption of debentures: Lump sum, draw of lots and purchase in the open market (excluding ex-interest and cum-interest). Creation of
Debenture Redemption Reserve.

ANALYSIS OF FINANCIAL STATEMENTS

Financial statements of a company: Statement of Profit and Loss and Balance Sheet in the prescribed form with major headings and sub headings (as per Schedule III to the Companies Act, 2013).

Financial Statement Analysis: Objectives, importance and limitations.

Tools for Financial Statement Analysis: Comparative statements, common size statements, cash flow analysis, ratio analysis.

Accounting Ratios: Objectives, classification and computation.

Liquidity Ratios: Current ratio and Quick ratio.

Solvency Ratios: Debt to Equity Ratio, Total Asset to Debt Ratio, Proprietary Ratio and Interest Coverage Ratio.

Activity Ratios: Inventory Turnover Ratio, Trade Receivables Turnover Ratio, Trade Payables Turnover Ratio and Working Capital Turnover Ratio.

Profitability Ratios: Gross Profit Ratio, Operating Ratio, Operating Profit Ratio, Net Profit Ratio and Return on Investment.

CASH FLOW STATEMENT

Meaning, objectives and preparation (as per AS 3 (Revised) (Indirect Method only)

COMPUTERISED ACCOUNTING

Overview of Computerised Accounting System.

Introduction: Application in Accounting.
Features of Computerised Accounting System.
Structure of CAS.
Software Packages: Generic; Specific; Tailored.

Accounting Application of Electronic Spreadsheet.

Concept of electronic spreadsheet.
Features offered by electronic spreadsheet.
Application in generating accounting information – bank reconciliation statement; asset accounting; loan
repayment of loan schedule, ratio analysis
Data representation – graphs, charts and diagrams.

Using Computerized Accounting System.

Steps in installation of CAS, codification and Hierarchy of account heads, creation of accounts.
Data: Entry, validation and verification.
Adjusting entries, preparation of balance sheet, profit and loss account with closing entries and opening entries. Need and security features of the system.

Database Management System (DBMS)

Concept and Features of DBMS.
DBMS in Business Application.
Generating Accounting Information – Payroll.