UNIT 1: ACCOUNT FOR COMPANIES (35 LECTURE HOURS)

Company formation, types and documents:

• Company and its formation: Meaning and concept of company
• Characteristics of a company
• Types of companies
• Statutory company

Registered company:

• Companies limited by shares and guarantee
• Unlimited Company
• Private company
• Public company
• Characteristic and privileges of private company
• Advantage of company form of organization
• Company promoters
• Concept of memorandum of association
• Article of Association and Prospectus relating to shares and debentures

Shares and share Capital of a Company:

• Meaning of share capital
• Types of share capital
• Authorized
• Issued
• Subscribed
• Called up an paid up Capital
• Methods of Raising Capital
• Meaning and types of shares – ordinary and Preference shares
• Types of preference shares – cumulative
• Non – cumulative
• Participating and redeemable

Accounting treatment for:

• Share application
• Share allotment
• Share calls
• Issue of shares
• At par, at discount and at premium
• Calls in arrears
• Calls in advance
• Share forfeiture
• Re-issue of forfeited shares
• Minimum subscription
• Under subscription
• Over subscription and share allotment
• Refund and transfer of excess application money to allotment and share calls and pro-rata allotment
• Share underwriting
• Commission and brokerage
• Issue of shares in consideration for other than cash

Accounting for Debentures:

• Meaning
• Characteristics
• Importance and types of debentures
• Bearer and Registered
• Naked and secured
• Redeemable and Irredeemable
• Convertible and non-convertible
• First and second debentures

Accounting treatment for:

• Debenture application
• Allotment and calls
• Issue of debentures for cash
• Consideration for other than cash and as collateral security
• Issue of debenture
• At par, at a premium and at a discount
• Issue of debentures with redeemable conditions
• Treatment of shares and debentures in the Balance Sheet of a Company

UNIT 2: FINAL ACCOUNT OF A COMPANY (30 LECTURE HOURS)

Trading Account:

• Concept and Preparation of Trading Account

Profit and Loss Account:

• Concept and preparation of Profit and Loss Account

Profit and Loss Appropriation Account:

• Concept and preparation of Profit & Loss Appropriation Account

Balance Sheet:

• Concept
• Objectives and marshalling of assets and liabilities
• And preparation of a Balance Sheet

Preparation of a company’s final account with or without the following adjustments:

• Outstanding expenses
• Prepared expenses
• Accrued income
• Income received in advance
• Depreciation and amortization
• Appreciation
• Closing stock
• Bad debts
• Loss of goods
• Provision for bad debts
• Provision for discount on debtors
• Interest on loans
• Interest on investments
• Purchase or sale of fixed assets
• Gods distributed as samples
• Transfer to reserves and funds, tax paid and provision for tax
• Proposed dividend and final dividend
• Manager’s commission
• Bonus and retirement benefits to employees in cash and goods sent to customers on sale or return basis
• Concept and preparation of Income Statement and Balance Sheet and prescribed by the Company Act 2053 BS using as work sheet.

UNIT 3: FINANCIAL STATEMENT ANALYSIS (35 LECTURE HOURS)

• Meaning
• Concept
• Objectives
• And limitation of financial statement analysis
• Partied interested in financial statement analysis

Ratio analysis:

• Concept and limitations of ratio analysis
• Calculation of following ratios (without interpretation)
• Current ratio
• Quick ratio
• Debt – equity ratio
• Debt to total capital ratio
• Inventory turnover ratio
• Debtor turnover ratio
• Average collection period
• Fixed assets turnover ratio
• Total assets turnover ratio
• Capital employed turnover ratio
• Gross profit margin
• Net profit margin
• Return on assets
• Return on shareholder’s equity
• Return on common shareholder’s equity
• Return on capital employed
• Earning per share
• And dividend per share

Statement of Changes in Financial Position:

• Meaning
• Objectives
• And preparation of statement of changes in financial position on working capital and cash basis – determination of funds from operations
• Cash from operations
• Cash from investing and financing activities with sample and direct adjustments.

UNIT 4: COST ACCOUNTING (50 LECTURE HOURS)

Conceptual Foundation:

• Concept
• Objectives
• Importance and limitations of cost accounting
• Limitations of financial accounting
• Difference between financial and cost accounting
• Methods of costing
• Job order costing
• Process costing
• Service costing
• Unit costing
• Batch costing and
• Multiple costing

Introduction and classification of costs:

• Concept of cost
• Classification of cost on the basis of production and process
• Element
• Functions
• Variability and controllability

Materials and material control:

• Meaning and types of materials
• Material control
• Objectives and essential of material control

Material Scheduling or Routing:

Purchases:

• Material purchasing and purchase department
• Centralized and decentralized purchasing
• Purchase order
• Preparation of purchase Requisition form
• Tender form
• Purchase Order form
• And inspection and Receiving form

Store keeping:

• Meaning
• Types and location of stores
• Storekeeper
• Duties and responsibilities of storekeeper
• Classification and condification of materials
• Bin cards

Issuing:

• Meaning and preparation of inventory requisition form
• Pricing of materials issued
• And valuation of closing stock under LIFO and FIFO by preparing store ledgers

Stock Level:

• Meaning and computation of stock levels
• Minimum stock level
• Maximum stock level
• Average stock level
• Reordering level
• And reordering quantity

Economic Order quantity (EOQ):

• Meaning
• Concept
• And computation of EOQ and total cost at EOQ using formula

Accounting for labour:

Labour cost:

• Meaning and importance
• Labour cost control and its need
• Departments and their functions
• Personnel department
• Engineering department
• Rate or time and motion study department
• Time keeping department
• Payroll department
• And cost accounting department
• Basic knowledge about the following forms
• Labour Requisition form
• Employee’s History Card
• Time Card
• Piece Card and Payroll Sheet

System of wages payment:

• Piece rate and Time Rate Systems
• Meaning advantages and disadvantages of and difference between piece rate and time rate systems
• Determination of total wages using piece rate and time rate systems

Accounting for Overheads:

Overheads:

• Concept and meaning of overheads
• Classification of overhead on the basis of function
• Behavior
• Elements and control
• Allocation
• Apportionment and Absorption of overheads
• Meaning and importance

Unit of Output costing:

Unit Costing:

• Concept and importance of unit costing
• Components of cost sheet
• Prime cost
• Work Oncost
• Works Cost
• Office Oncost
• Cost of production
• Cost of goods sold
• Selling and Distribution Oncost
• Costofsales
• Profit and Total sales
• Preparation of cost sheet

Tender:

• Meaning and calculation of tender cost on the basis of cost sheet

Manufacturing account:

• Meaning and preparation of manufacturing Account for determination of cost of manufacturing and manufacturing profit

Cost Reconciliation Statement:

• Concept and preparation of Cost Reconciliation Statement

UNIT – WISE WEIGHTAGE