Best for Business
Commerce – Best for business:-
Commerce is the second most sought stream after 10th especially nowadays. Growing liberalization and commercialization has increased their importance and have opened a wide range of career opportunities. One should choose commerce only when one has an interest in business, numbers, finances, and economics. Commerce provides such skill and knowledge which is considered best for business, finance, and commerce. It is considered as the threshold for a prestigious career like Chartered Accountant, Company Secretary etc.
Following are the Commerce subjects in class 11-12
- Accountancy
- Economics
- Business Studies.
1. What is Accountancy
Defining Accounting:-
The definition of accounting is being described as the method of reporting, recording, analyzing, and summarizing economic data. The implementation of accounting allows the company’s decision-makers to make effective decisions by presenting information on the financial position of the firm.
2. What is Economics.
Economics is a philosophy that explores human activity directed at the distribution of finite resources in such a way that consumers can increase their happiness, those producers can maximize their income, and that society can maximize their social welfare. It’s about having a decision in the face of scarcity.
3. Business studies
Business can be defined as an economic activity involving the production and selling of goods and services conducted for profit-making through fulfilling human needs in society.
Syllabus of Commerce for class 11th & 12th
11th commerce subjects
Part A: Financial Accounting – I
Unit-1: Theoretical Frame Work
Introduction to Accounting
• Accounting- concept, objectives, advantages and limitations, types of accounting information; users of accounting information and their needs. Qualitative Characteristics of Accounting Information. Role of Accounting in Business
• Basic Accounting Terms- Business Transaction, Capital, Drawings. Liabilities (Non-Current and Current). Assets (Non-Current, Current); Fixed assets (Tangible and Intangible), Expenditure (Capital and Revenue), Expense, Income, Profit, Gain, Loss, Purchase, Sales, Goods, Stock, Debtor, Creditor, Voucher, Discount (Trade discount and Cash Discount)
Theory Base of Accounting
• Fundamental accounting assumptions: GAAP: Concept
• Business Entity, Money Measurement, Going Concerned, Accounting Period, Cost Concept, Dual Aspect, Revenue Recognition, Matching, Full Disclosure, Consistency, Conservatism, Materiality, and Objectivity
• System of Accounting. Basis of Accounting: cash basis and accrual basis
• Accounting Standards: Applicability in IndAS
• Goods and Services Tax (GST): Characteristics and Objective
Unit-2: Accounting Process
Recording of Business Transactions
• Voucher and Transactions: Source documents and Vouchers, Preparation of Vouchers, Accounting Equation Approach: Meaning and Analysis, Rules of Debit and Credit.
• Recording of Transactions: Books of Original Entry- Journal
Special Purpose books:
• Cash Book: Simple, cash book with bank column and petty cashbook
• Purchases book
• Sales book
• Purchases return book
• Sales return book
Ledger:
• Format, Posting from journal and subsidiary books, Balancing of accounts
Bank Reconciliation Statement:
• Need and preparation
Depreciation, Provisions, and Reserves
• Depreciation: Concept, Features, Causes, factors
• Other similar terms: Depletion and Amortisation
• Methods of Depreciation:
i. Straight Line Method (SLM)
ii. Written Down Value Method (WDV)
• Difference between SLM and WDV; Advantages of SLM and WDV
• Accounting treatment of depreciation
i. Charging to an asset account
ii. Creating provision for depreciation/accumulated depreciation account
iii. Treatment for disposal of the asset
• Provisions and Reserves: Difference
• Types of Reserves:
i. Revenue reserve
ii. Capital reserve
iii. General reserve
iv. Specific reserve
v. Secret Reserve
• Difference between capital and revenue reserve
Accounting for Bills of Exchange
• Bill of exchange and Promissory, Note: Definition, Specimen, Features, Parties
• Difference between Bill of Exchange and Promissory Note
• Terms in Bill of Exchange:
i. Term of Bill
ii. Accommodation bill (concept)
iii. Days of Grace
iv. Date of maturity
v. Discounting of bill
vi. Endorsement of bill
vii. Bill after the due date
viii. Negotiation
ix. Bill sent for collection
x. Dishonor of bill
• Accounting Treatment
Trial balance and Rectification of Errors
• Trial balance: objectives and preparation
• Errors: types-errors of omission, commission, principles, and compensating; their effect on Trial Balance
• Detection and rectification of errors; preparation of suspense account
Part B: Financial Accounting – II
Unit 3: Financial Statements of Sole Proprietorship
Financial Statements
Meaning, objectives, and importance; Revenue and Capital Receipts; Revenue and Capital Expenditure; Deferred Revenue expenditure. Trading and Profit and Loss Account: Gross Profit, Operating Profit, and Net profit. Preparation. Balance Sheet: need, grouping, and marshaling of assets and liabilities. Preparation. Adjustments in preparation of financial statements with respect closing stock, outstanding expenses, prepaid expenses, accrued income, income received in advance, depreciation, bad debts, provision for doubtful debts, provision for discount on debtors, Abnormal loss, Goods taken for personal use/staff welfare, interest on capital and managers commission. Preparation of Trading and Profit and Loss account and Balance Sheet of a sole proprietorship with adjustments.
Incomplete Records
Features, reasons, and limitations. Ascertainment of Profit/Loss by Statement of Affairs method.
Unit 4: Computers in Accounting
• Introduction to computer and accounting information system {AIS}: Introduction to computers (elements, capabilities, limitations of computer system)
• Automation of accounting process: meaning
12th Commerce syllabus
Part A: Accounting for Not-for-Profit Organizations, Partnership Firms and Companies
Unit 1: Financial Statements of Not-for-Profit Organizations Units/Topics
• Not-for-profit organizations: concept.
• Receipts and Payments Account: features and preparation.
• Income and Expenditure Account: features, preparation of income and expenditure account and balance sheet from the given receipts and payments account with additional information.
Unit 2: Accounting for Partnership Firms Units/Topics
• 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.
Note: Interest on partner’s loan is to be treated as a charge against profits. Goodwill to be 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 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 o goodwill (as per AS 26), treatment for revaluation of assets and reassessment of liabilities, treatment of reserves and accumulated profits.
• 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.
• Calculation of deceased partner’s share of profit till the date of death.
• 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) The realized value of each asset must be given at the time of dissolution. (ii) In case, the realization expenses are borne by a partner, clear indication should be given regarding the payment thereof.
Unit-3 Accounting for Companies
Accounting for Share Capital
• Share and share capital: nature and types.
• Accounting for share capital: issue and allotment of equity and preferences shares. 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.
• Concept of Private Placement and Employee Stock Option Plan (ESOP).
• Accounting treatment of forfeiture and reissue of shares.
• Disclosure of share capital in the Balance Sheet of a company.
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. Writing off discount / loss on issue of debentures.
Note: Discount or loss on issue of debentures to be written off in the year debentures are allotted from Security Premium Reserve (if it exists) and then from Statement of Profit and Loss as Financial Cost (AS 16).
• Creation of Debenture Redemption Reserve.
Note: Related sections of the Companies Act, 2013 will apply.
Part B: Financial Statement Analysis
Unit 4: Analysis of Financial Statements
Financial statements of a Company: Statement of Profit and Loss and Balance Sheet in prescribed form with major headings and sub headings (as per Schedule III to the Companies Act, 2013) Note: Exceptional items, extraordinary items and profit (loss) from discontinued operations are excluded.
• Financial Statement Analysis: Objectives, importance and limitations.
• Tools for Financial Statement Analysis: Comparative statements, common size statements, cash flow analysis, ratio analysis.
• Accounting Ratios: Meaning, 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.
Unit 5: Cash Flow Statement
Meaning, objectives and preparation (as per AS 3 (Revised) (Indirect Method only)
OR
Part B: Computerised Accounting
Unit 3: 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
