Table Of ContentFinancial Accounting - I
Revised F
ourth Edition
Financial Accounting - I
Revised F
ourth Edition
Mohammed Hanif
Sr. Professor of Accounting & Finance
St. Xavier’s College (Autonomous), Kolkata
Amitabha Mukherjee
Formerly Sr. Professor of Accounting & Finance
St. Xavier’s College (Autonomous), Kolkata
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Financial Accounting - I, Revised Fourth Edition
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Revised n
Preface to the Fourth Editio
Firstly, we would like to thank our readers for the overwhelming support they’ve shown for the last three
editions of this book. Throughout this book we have tried to give students a thorough knowledge of the
latest CBCS syllabus
prescribed by University of Calcutta w.e.f. 2017-18. This book has been designed and written exclusively for
students appearing for their B.Com Semester-I examination.
Considering the changing students’ need and valuable feedback from our readers, we have undertaken a
considerable restructuration of the book especially in terms of pedagogical aspect.
� �� Every chapter has been supplemented with adequate number of solved examples, which have been
experience to our readers as they transit from beginning to the end of the chapter.
� �� The in-chapter solved examples are then followed by Previous Years’ C.U. Question Papers (with
solutions). This section is further segregated as- ‘For General Course Students’ and ‘For Honours
Course Students’. These questions will enable students to assess the kinds of questions asked in the
university exams and will also help them in evaluating their conceptual understanding.
� �� Lastly, an exclusive section ‘Special Problems’ has been dedicated for the advance learners. This
� �� Considering the weightage assigned to the theory portion in the university question papers, we have
added an exclusive section ‘Suggested Answers of Short Questions’ at the end of the book. The
answers to the theoretical questions from the previous 7 years’ (2011 to 2017) C.U. Question Papers.
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As per the 2017-18 CBCS syllabus prescribed by University of Calcutta, the following two chapters are
exclusive to the current edition.
� �� Chapter-13: Introduction to Accounting Theory
� �� Chapter-14: Introduction to Accounting Standards
Secondly, with the withdrawal of AS-6: Depreciation Accounting and amendments in AS-10: Property,
Plant and Equipment, there was a need to revise the Chapter-9: Depreciation Accounting. Accordingly,
there has been a thoroughly revision of this chapter considering the latest amendments in AS-10.
A number of colleagues, friends and students helped us in the preparation of this book. We thank each and
every one of them.
[email protected] . All suggestions are welcome.
We specially thank Mr. S. Rangarajan for typesetting and formatting this book.
AUTHORS
Preface to the First Edition
!
taking place worldwide, different universities of India are changing the coment of the undergraduate syllabus
continually in a consistent manner.
In the past an accountant’s job was to report past events, however, nowadays an accountant has to take
"
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professionals. Throughout this book, we have tried to give students a thorough knowledge in the techniques
The book has been designed in accordance with the latest syllabus of the University of Calcutta. Utmost
care has been taken to balance the book well, with text and problems. We have included numerous fully
solved problems, interspersed within the text. In addition, a variety of chapter and exercises have been
'
various university question papers till 2009. More than 500 solved problems and 300 exercises have been
incorporated into this text. In addition to that, more than 200 multiple choice questions have been added to
help students clear every concept thoroughly.
AS-2, Valuation of Inventories and AS-9, Revenue Recognition, have been dealt with as per the require-
ments of the syllabus.
'
write to the authors at [email protected]. All suggestions for further improvement in the book are also
welcome.
We thank Mr. S. Rangarjan for typesetting and formatting this book. Our students have always been a
source of inspiration and happiness. They never cease to raise good points. We have tried to incorporate all
such points in this book.
We especially thank Master M.H. Kabir for mapping the newly designed rupee symbol “`” throughout
this book.
AUTHORS
Syllabus
Calcutta University
CC 1.1 Ch: FINANCIAL ACCOUNTING -- I
Marks Where you can
Unit Topic Details
allotted find in the Book
Nature of accounting; Users of accounting
information; Qualitative characteristics of
accounting information
Double entry book keeping system -- Basic
accounting equation, meaning of assets,
Chapter 1
liabilities, equity, revenue and expenses
Chapter 2
Accounting cycle -- Recording of
Chapter 3
1 Introduction transactions, journal, ledger and preparation 5
Chapter 4
of Trial Balance.
Chapter 5
Bases of accounting; cash basis and accrual basis.
Chapter 6
Basic concepts and conventions: entity, money
measurement, going concern, cost, realisation,
accruals, periodicity, consistency, prudence
(conservatism), materiality, matching and full
disclosures.
Revenue recognition: Meaning of revenue;
objective; timing of recognition. Recognition
of expenses. Chapter 7
Inventories: meaning. Significance of inventory Chapter 8
valuation. Lower of cost or market value rule;
Inventory ascertainment and reconciliation.
The nature of depreciation. The accounting
concept of depreciation. Factors in the
measurement of depreciation. Methods of
computing depreciation: straight line method and
2 Concepts for diminishing balance method; Disposal of
Chapter 9
Determination depreciable assets; change in estimate and 15
Chapter 10
of Business method of charging depreciation. Accounting for
Income depreciation:
Asset-depreciation, Asset-provision.
Reserves and provisions: Meaning; Objective;
Types & Accounting
Capital and revenue expenditures and receipts:
Chapter 11
general introduction only.
Chapter 12
Adjustment and rectification
x Syllabus
Concept of accounting theory, relation with
Introduction to
practice; GAAP, Capital ---- Capital maintenance
Accounting Chapter 13
concepts. Limitations of Historic Cost accounting,
Theory
3 Introduction to Fair Value accounting. 10
Introduction to Financial accounting standards: concept, benefits,
Accounting procedure for issuing accounting standards in India. Chapter 14
Standard Need for a global standard, IFRS (concept only).
Preparation of financial statements: of sole
Final Accounts of proprietorship business entities from a trial balance Chapter 15
4 15
Trading Concern -- Manufacturing, Trading, P/L A/c and Balance Chapter 16
Sheet
Financial Preparation of financial statements: a) from
Statement of incomplete records b) of non-profit organisation
Chapter 17
5 Incomplete 10
chapter 18
Records and of
NPO
Consignment: Basic features; difference
with sales. Recording in the books of
Consignor -- at cost & at invoice price,
Valuation of unsold stock; Ordinary
Accounting for commission. Treatment and valuation of
Special Sales abnormal & normal loss. Special
Transaction commission; Del credere commission (with
and without bad debt) - use of Consignment
Debtors A/c. Recording in the books of
Consignee
Accounting for sale on approval
Chapter 19
Concept of sectional balancing, preparation
Chapter 20
6 Sectional and Self of control accounts. Self balancing Ledger: 25
Chapter 21
Balancing Ledger advantages; Recording process; preparation
Chapter 22
of Adjustment accounts.
Loss of stock: Physical & ownership
concept; concept of under-insurance and
average clause; computation of claim -- with
Insurance Claim price change; consideration of unusual
for Loss of Stock selling line; price reduction etc.
and for Loss of Loss of profit: Concept -- insured &
Profit uninsured standing charges, GP rate, short
sales and increased cost of working, average
clause and computation of claim (simple
type)
TOTAL 80
