Module : ACT
204: Intermediate Financial Accounting
Programme : B.Com
Credit Value : 12
Prerequisite :
ACT
101: Accounting Principles
General
Objectives:
·
To
enable learners to acquire functional knowledge of accounting procedures
involved in partnership, Not-for-Profit organizations, consignment, joint
venture, hire purchase and installment system and branch and departmental
accounting
·
To
help students understand and use the acquired knowledge of accounting
practically in the respective fields
Learning
Outcomes:
Upon successful completion of this module,
student should be able to:
·
test
and account for transactions of dissolution of partnership firm
·
prepare
Receipts and Payment A/c, Income and Expenditure A/c and Balance Sheet of Not
for profit organizations
·
explain
the meaning of consignment and do the accounting entries in the books of
consignor and consignee
·
apply
the different methods of transactions of joint venture
·
apply
the Concept of Hire Purchases and Installment System of Account and account for
transactions in the books of hire purchase and installment system
·
do
accounting in the books of branch having dependent and independent system of
accounting
·
maintain
books in columnar form for department wise information
CONTENT
Unit-I: Partnership Accounts (20
Hours)
1.
Overview of admission, retirement and death of a
partner
2.
Dissolution of Firm
Treatment of
Realisation Expenses; Joint Life Policy, Reserves, Provisions and Fund.
Accounting Treatment Settlement of Partner’s Loan, Unrecorded Assets and Liabilities.
Assets and Liabilities taken over by partners and also Assets taken over by
Creditors and Ascertainment of missing figures through Preparation of
Memorandum Balance Sheet
3.
Insolvency of Partner(s)
Insolvency of
Partner both fixed and fluctuating method with Garner Vs. Murray Rule and
Indian Partnership A/c; (with and without debit balance of solvent partners);
When more than one partner declared insolvent; When all partners are insolvent
except one
4.
Insolvency of the Firm:
Creditors are
not transferred to Realisation A/c and Transferred to Realisation A/c with
fully and partly secured loans
5.
Gradual Realisation and Piecemeal
Distribution: Surplus Capital Method and Maximum
Loss Method
6.
Amalgamation of Firm to a Company.
When one
exiting partnership firm absorb another Partnership firm
7.
Sale of Firm to a Company:
Conversion of a
firm into a company when all partners are solvent and insolvency of a partner
Unit-II: Accounting for Not-for-Profit
Organizations (10 Hours)
Preparation
of Income & Expenditure A/c and Balance Sheet when Trial Balance and other
information are given.
Preparation
of Income & Expenditure A/c and Balance Sheet when Receipts & Payments
A/c and other information are given.
Preparation
of Income & Expenditure A/c when Receipts & Payments A/c, Balance
Sheet, and other information are given.
Preparation
of Receipts & Payments A/c and Balance Sheet when Income & Expenditure
A/c and other information are given.
Preparation
of Receipts & Payments A/c when Income & Expenditure A/c, Balance
Sheet, and other information are given.
Preparation
of Opening and Closing Balance Sheets when Receipts & Payments A/c and
Income & Expenditure A/c are given.
Unit-III: Consignment and Joint
Venture (15 Hours)
1.
Consignment
Concept, need
and objectives; different commissions and objectives; applications of
consignment problems in two parties’ book at cost and invoice procedures as
also treatment of bad debts with del-credere commission, stock lost in transit
and lost in godown (Both Normal and Abnormal Loss) and consignment stock.
2.
Joint Venture
Concept, need
and objectives; similarities and differences between joint venture and
partnership and also consignment; methods of recording transactions – separate
set of books, in the books of one co-venture, in the books of all co-ventures
including memorandum joint venture method.
Note:
Valuation of Closing Stock in Joint Venture and Joint Ventures for Underwriting
of Shares are included but Goods returned by consignee, fall in market price
and Conversion of Consignment to Joint Venture has been excluded.
Unit-IV: Hire Purchase and Instalment
Payment System (15 Hours)
1.Hire Purchase System:
Full Cash
Price Basis and Accrued Price Basis - Calculation of Cash Price, Hire Purchase
Price and Interest under different situations. Default and Repossession –
Complete and Partial
2.Instalment Payment System:
Full Cash Price
Basis and Accrued Price Basis - Calculation of Cash Price, Hire Purchase Price
and Interest under different situations. Default and Repossession – Complete
and Partial
3.Lease transactions: (As- 19)
Concept
and advantages of lease; the lease from the lessee’s point of view; financial
decision and types of lease- operational and financing lease; reporting in the
financial statements.
Unit-V: Branch Accounting and
Departmental Accounting (15 Hours)
1. Branch Accounting:
Meaning,
Types of Branches; (a) Dependent Branches – Features and Accounting Methods
i.e., Debtors Methods and Stock and Debtors Methods. (b) Independent Braches –
Features and Accounting Treatment excluding foreign branches
2. Departmental Accounting:
Meaning,
distinction between Branch and Departmental Accounts – Accounting Treatment –
Basis of allocation of Expenses and Inter Departmental Transfers
Teaching
strategies
- Lectures
- Demonstration
- tutorial
- presentation
Assessment
·
Assignment 20%
·
Mid-
Semester
Exam 30%
·
End-Semester
Exam 50%
Total 100%
Essential
Texts
- Sehgal,
A. and Sehgal, D., Advanced Accounting – Corporate Accounting,
Taxman publication, Delhi.
- Sehgal,
A. and Sehgal, D., Advanced Accounting – Financial Accounting,
Taxman publication, Delhi.
References
- Accounting
Principles –Anthony R.N., and J.S. Reece – Richard D.
Irwin, Inc
- Accounting
Text and Cases – Anthony, R.N, Tata McGraw-Hill
Publishing Company Ltd.