FINANCIAL ACCOUNTING II

Course Code: Course Objective:

To provide an understanding of the basics of financial statement analysis and statement of cash flow statement. To give a detailed understanding of accounting for different types of organizations like partnership and company, accounting for re-organization of the business in case of Amalgamation, absorption and reconstruction.

BBFFN 10201

Credit Units: 04

Course Contents:
Module I: Financial Statement Analysis Introduction, objectives of financial statement analysis, Techniques-Ratio analysis, Comparative analysis and limitations of financial statement analysis.AS-20(no numerical) Module II: Statement of Cash Flows Purpose, use and structure of the Statement of Cash Flows, Preparation of the statement of cash flows, Reporting cash flows and Interpreting the statement of cash flows.AS-3(no numerical) Module III: Accounting For Partnership Introduction to partnership accounts, partnership deed. Admission of a new partner-Revaluation account, Computation of new profit sharing ratio and sacrificing ratio, Proportionate capital, Treatment of goodwill in partnership accounts and its valuation. Retirement and Death of a partner: Determining the gaining ratio, Revaluation of assets and liabilities, Reserve, Final payment to retiring partner, Treatment and adjustment of goodwill. Numericals on preparation of various accounts in case of retirement and death of a partner. Dissolution of the firm: Circumstances leading to dissolution of partnership, Settlement of the accounts, Capital ratio on insolvency, Insolvency of all partners and Garner Vs Murray decision. Module IV: Company Accounts Company Accounts: Characteristics and types of shares. Accounting for issue of shares at par, premium and discount. Numericals on calls in arrear, calls in advance, forfeiture of shares, reissue of forfeited shares in case of pro rata allotment and determining the amount to be transferred to capital reserve. Accounting for debentures: Classification of Debentures. Differentiate Debentures from shares. Numericals on issue of debentures for cash and for consideration other than cash. Issue of debentures as collateral security. Redemption of debentures and numericals on the same. Module V: Amalgamation Absorption and Reconstruction of Companies Determining purchase consideration. Numericals on accounting treatment of amalgamation, absorption, internal and external reconstruction. Understanding inter company holdings and numericals on the inter company holdings.AS-14(no numerical)

Examination Scheme:
Components Weightage (%) P-1 10 C-1 10 CT-1 20 EE-1 60

Text & References:

Text: Maheshwari, S. N. Advanced Accountancy Volume-II Ninth Edition, Vikas Publishing House Pvt. Ltd. References: Grewal, T.S., Shukla, M. C., Advanced Accountancy Sixteenth Edition, Sultan Chand and Sons. Tulsian, P.C., Financial Accounting, Volume II, Pearson Education