Accounting II Syllabus, Grade 12 Principle of Accounting II Subject code: 104 Annual Teaching hours: 160 Credit hours: 5 Unit 1: Accountin...
Accounting II Syllabus, Grade 12
Principle of Accounting II
Subject code: 104
Annual Teaching hours: 160
Credit hours: 5
Unit 1: Accounting for Companies
1.1 Concept of corporate 6LH
1.1.1 Company
Private company and public company: Meaning, Characteristic;
Differences between private company and public company;
Documents of the company (memorandum of association, articles of association and prospectus)
1.2 Accounting for shares 8LH
1.2.1 Capital of the company
Meaning of share capital, types of share capital (authorized, issued, subscribed, called up and paid up capital);
Shares of the company: meaning, characteristic types of shares (ordinary and preference shares);
Types of preference shares: redeemable preference
shares, irredeemable preference shares, convertible preference shares,
non-convertible preference shares, participating preference shares,
non-participating preference shares, cumulative preference shares,
non-cumulative preference shares;
Difference between equity shares and preference shares;
Procedures of share issue as per the Nepal Company Act.
Method of share issue and accounting recoding: lump sum basis, installment basis;
Forfeiture of shares and reissue of shares;
Under subscription of shares, over subscription of shares (excess shares entire rejected, pro-rata allotment, mixed allotment);
Shares issued for cash at par, premium and discount;
Shares issued at other than cash;
Share issued for underwriting commission and brokerage.
1.3 Accounting for debentures 5LH
1.3.1 Debenture
Meaning, characteristic and importance of debentures;
Types of debentures: bearer and registered, naked
and secured, redeemable and irredeemable, convertible and
non-convertible, first and second debentures;
Differences between shares and debentures;
Issue of debentures in consideration for other than cash
Accounting treatment for debentures issue: lump sum basis;
Issue of debentures with redeemable condition;
Issue of debentures for collateral security;
Redemption of debentures at lump sum basis;
Conversion of debentures into shares.
Unit 2: Corporate Financial Statements
2.1 Corporate Financial Statements 24LH
2.1.1 Preparation of financial statements
Meaning of financial statement;
Traditional financial statements (trading account,
profit and loss account, profit and loss appropriation account, balance
sheet);
Financial statements (income statement; retained
earnings and balance sheet) with adjustments or without adjustment as
per Nepal Accounting Standard and Nepal Financial Report Standards;
Statement changing in shareholders’ equity.
2.2 Worksheet 8LH
2.2.1 Preparation of worksheet;
Introduction of worksheet and need of worksheet;
2.3 Cash flow statement 18LH
2.3.1 Cash flow statement
Preparation of cash flow statement with adjustment (direct and indirect method) on the basis of worksheet or trial balance;
Preparation of cash flow statement with adjustment (direct and indirect method) on the basis of comparative balance sheet.
Unit 3: Cost Accounting
3.1 Concept of cost accounting 4LH
3.1.1 Introduction of cost accounting
Cost accounting: meaning, objectives, importance and limitation;
Limitation of financial accounting;
Differences between cost accounting and financial accounting;
Method of costing: job order costing, contract
costing, process costing, service costing, unit costing, batch costing
and multiple costing.
3.1.2 Introduction and classification of cost
Concept of cost, classification of cost on the
basis of production, process, elements, functions, variability and
controllability;
3.2 Materials and materials control 10LH
3.2.1 Materials and materials control
Meaning and types of materials, objectives and essential of materials control.
Purchase and receipt procedures: materials purchasing and purchase department, centralized and decentralized
Receipt of purchasing order; preparation of
purchase requisition form, tender form, purchase order form, receipt of
materials, inspection of materials and payment of materials;
Purchase department: centralize purchase and decentralize purchase;
Store keeping: meaning, types and location of store;
Storekeeper: duties and responsibilities of storekeeper;
Classification and codification of materials;
Bin cards.
Issuing: meaning and preparation of requisition form;
Pricing of materials issue;
Valuation of closing stock under FIFO, LIFO, average and weighted average methods;
Stock level:
meaning and computation of stock level; maximum stock level, minimum
stock level, average stock level, reorder stock level and reordering
quantity.
Economic order quantity:
meaning, concept and computation of EOQ; total cost at EOQ by using
formula, EOQ by trial and error method, reorder level and calculation of
total cost.
3.3 Accounting for labour 4LH
3.3.1 Accounting for labour
Labour cost: meaning and importance; labour cost control and its need;
Basic knowledge of labour requisition form,
employees’ history card, time card, biometric machine, job card, piece
card and payroll sheet.
System of wage payment: meaning, advantage, disadvantage of piece rate system and time rate system;
Differences between piece rate system, time rate system
Determination of total wages using piece rate and time rate system.
3.4 Accounting for overhead or indirect expenses 2LH
3.4.1 Overhead or indirect expenses
Overhead: concept and meaning of overhead;
Classification of overhead on the basis of function, behavior, elements and control;
Allocation, apportionment and absorption of overhead: meaning and importance.
3.5 Unit or output costing 16LH
3.5.1 Unit or output costing
Unit costing: meaning and importance of unit costing;
Components of cost sheet: prime cost, works cost,
office on cost, cost of production, cost of goods sold, selling and
distribution cost, cost of sales, profit and total sales;
Preparation of cost sheet;
Tender and historical cost: meaning and calculation of tender cost on the basis of cost sheet.
3.6 Cost reconciliation statement 5LH
3.6.1 Cost reconciliation statement
Meaning of cost reconciliation statement;
Causes of differences of net profit or loss of financial accounting and cost accounting;
Preparation of cost reconciliation statement.
Unit 4: Computer Accounting
4.1 Use of computer in accounting 10LH
4.1.1 Computer systems in accounting
The meaning, elements, importance and limits of computer system in accounting
Computer System Process: sources of information in a computer system (invoice, purchase order, receipt, barcode)
Information analysis
Information processor: journals, ledgers and reports,
Storage of information: Data storage method
Records in Excel: depreciation table, debt repayment table, payroll sheet
4.1.2 Use of software in accounting
Software: use of software, software system language refiner, accounting software requirements and features
Company creation, accounting masters, accounting
group, journal, ledger, balance test, income statement and balance
sheet, report performance, bank account reconciliation details
preparation (for small projects only)
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