OSWAAL CBSE Chapterwise Mind Maps, ACCOUNTANCY ,

By balance c/dSurplus ofexpenditureSurplus ofIncomeAll incomeAmountsIncomeAll ExpensesExpenditure Amountcontained in Receipts and Payment Account. Prepared on the basis of informationdeficit balance. It is a nominal Account. Closing balance shows either surplus orthat are related to current year. This account records only those transactionsFeaturesBy All Paymentsin cashTo Balance b/dTo All Receiptsin cashAmountPaymentsFeatureAmountReceiptsare shown. It is a real account. Closing balance shows howmuch cash balance is available. Only actual cash transactionsbalance of cash in hand/or at Bank. It commences with the openingAmountCapital fund andOther LiabilitiesLiabilitiesAssetsAll AssetsNot-for-ProfitOrganizationshNot-for-profit organisations refer to theorganisations that are used for the welfareof the society while not for profit.Chapter - 1 Subscriptions Grants and Aids Income from different Activities Membership fees The Dove foundation based in U.P. BHUMI Udaan India foundation in MumbaiSourcesof fundsExamples Service motive Managed by elected memberstics Main sources of funds are donations, grants e.t.c.sireact Trustees are the membersarAmountCMind map : learning made simpleOSWAAL CBSE Chapterwise Mind Maps, ACCOUNTANCY, Class - XII1

Capital Rate months100 12Drawing Amount Rate Months100 12Net Profit beforeCommission Rate100100of ReservesOralPartnership Deedof Business Accepted formformation Easy to wind up Easy to establish Low cost ofBasics ofPartnershipFixAll entries are madein Capital AccountsSharing ofProfitsOnly LegalBusiness maximum fiftyminimum twoallowedProvided inPartnershipDecide OrallyDeedWrittens Transfer the balanceof P & L A/C Transfer the balanceof Profits Divided the shareGuarantee of Profitmissiony or ComSalarAmount of Loan 6profits are distributedamong all partners Then Remainingis written in P & Lappropriation Account Amount GuaranteedAccount is debitedwith that amount Divide newprofit among all His Capitalcalculated Deficiency amount is Commission to PartnerCurrent Account Remain Fixed All entries are made in Interest on DrawingC Interest on Capital Capital Accounts Salary to Partnertrece ofDeed Minor partner Nominal partner Secret partner Silent partner Active partnerabsen Name and Address of partners Name of the firm Nature of Business Capital of partners Interest on capital Interest on drawing Settlement of disputes Share Profits & Losses equally No Interest on capital No Interest on drawing No Partner gets salaryGoodwill Total Capitalised value ofBusiness – Capital Employed.Average Profit method:Goodwill Average Profit Numberof Years’ PurchaseSuper Profit method:Super Profit Actual Profit–Normal ProfitGoodwill Super Profit Numberof Years’PurchaseCapitalisation method:Average Profit 100Capitalisation ofAverage Profit Normal rate of returnof Valuation of goodwillhodsMetilldwogo Efficient management Favourable location Longer establishment of Business Market situations Risk associated with business It is an intangible assets It is not depreciatedChapter - 2tuNaMind map : learning made simpleepeditalapConc2OSWAAL CBSE Chapterwise Mind Maps, ACCOUNTANCY, Class - XII

losses is calculated. Gaining / Sacrificing ratio is calculated. The share of gaining partner and sacrificingpartner in Net effect is calculated. In case of positive Net Effects–Gaining Partner’s Capital A/cDr.To Sacrificing Partner’s Capital A/c Reverse entry is made in case of negativeNet Effects. Net effect of reserves, accumulated profits andTransfer to Partners’ CapitalAccount or Current Accountin old profit–sharing ratio.ReconstitutionofPartnership FirmstitutiontakesSacrificing Ratio Old Ratio - New RatioGaining Ratio New Ratio - Old RatioChapter - 3acple Change in profit–sharing ratio Amalgamation of two partnership firms Death of a partner Retirement of an existing partner Admission of a partnerCircumstances when Recon Debit the Revaluation Account if liabilities are increasing Credit the Revaluation Account if liabilities are decreasing Debit the Revaluation Account if assets decrease Credit the Revaluation Account if assets increaseMind map : learning made simpleOSWAAL CBSE Chapterwise Mind Maps, ACCOUNTANCY, Class - XII3

Capital firm’s new capitalis determined, New partner's capitalis determined on the basisof firm’s capital, Adjustment is made onthe firm’s capital on thebasis of new partner’s capital, New capital is determinedfor new partner as well asold partners. On the basis of Old Partners’amount of assets and Liabilities toRevaluation Account, Profits or losses arising from revaluationare distributed amongst the old partnersin their old profit-sharing ratio. Transfer the Increasing or decreasingAdmissionofa PartnerSacrificing Ratio Old Ratio–New RatioChapter - 4tangible assets as well as the goodwill according to theprofit–sharing ratio. On the admission of partner, goodwill must be revalued. However, not all businesses keep a goodwill account in theirbooks. Goodwill adjustments can be done – Goodwill Account opened. Goodwill account not opened. The new partner is required to pay his share of theGoodwillReserves, losses and profits should be transferredto Capital / Current Accounts of old partners inold profit - sharing ratio.and ReservesprofitsAccounting treatmentofcActedulamuNew Profit - Sharing Ratio Old Ratio–Sacrificing RatioMind map : learning made simple4OSWAAL CBSE Chapterwise Mind Maps, ACCOUNTANCY, Class - XII

transfer to Current Account.t ioRaGaining Ratio New share – Old shareNew share Old share Acquired shareBy Increase inAssetsTo Increase inLiabilitiesTo Decrease inAssetsTo Partners’Capital A/cBy Partners’Capital A/cBy Decrease inLiabilitiesParticularAmountAmountDR.General Reserve A/CDR.Workmen Compensation A/C DR.To all Partners’ Capital/ Current A/C’s Distribute in old ratio, Profit and Loss A/CParticularntoucc If capital of remaining partner falls short, he brings in cash. If capital of remaining partner has a surplus, he withdraws cash. Surplus or deficit in Capital Account is transferred or adjusted byRevaluatiouccngAperiod up to the date of death.Retirement/Deathofa PartnerAChapter - 5d Profits and Reserveslateumn Calculate average profit, Reduce average profit for thenumber of past years, Take total profits of the requiredBalance of Capital, Share in revaluationsAccount, Share of reserves, Share of goodwillof firm, Share of profit till thedate of retirement. Consider openingand debit to continuing partners’ capital account in gaining ratio. When appears in books, distribute in old ratio. When does not appear, credit to retiring partner’s capital accountNe w ProfitshariMind map : learning made simpleOSWAAL CBSE Chapterwise Mind Maps, ACCOUNTANCY, Class - XII5

AmountA/cBy Partners Capitalfor AssetsBy Cash receivedBy All LiabilitiesParticularsthe Current Account balance (if any) to Capital Account,the Undistributed Profits, Reserves or losses to Capital Account, Transfer the realisation loss or gain to Capital account, Make final settlement. TransferDissolution ofPartnership firmAmount received from sale of assets is debitedand payment of liabilities and realisationExpenses are credited to this account.AmountAccount Next,out of profitsout of Capital At last, by the partnersindividually in theirprofit-sharing ratio. First,ontributi of AssetsDis First, in paying debits of the firm,Next, in paying to each partner ratealy whatis due to him, Next, in paying to each partner ratealy whatis due to him on account of capital, Residue to be divided in profit-sharing ratio. Settlement of Dissolution by Notice (Section 43), Dissolution by Order of Court (Section 44).partnership deed so provides (Section 42), Dissolution by Agreement (Section 40), Compulsory Dissolution (Section 41), Dissolution upon Contingency, if theDissolution of partnershipamong all the partners in a firm.of Partnership firmutionlosDisChange in economic relationship amongthe partners but the firm Continues.Chapter - 6s Transferof partner’s loan account. Loan will be paid after outside liabilities. Paid off by passing following entryPartner’s loan A/cDr.To cash / Bank A/c Loan will be shown an the credit sideTo All AssetsTo Cash paidfor Liabilitiesand expensesTo PartnersCapital A/cParticularsA Nominal account prepared on dissolutionof firm to close down the books of accounts.Mind map : learning made simple6OSWAAL CBSE Chapterwise Mind Maps, ACCOUNTANCY, Class - XII

tunscoiDAtSundry assests A/cDr.To vendor’s Account For purchase of businessSundry assets A/cDr.Goodwill A/cDr.To liabilities A/cTo Vendor’s A/cTo Capital Reserve For purchase of MachineryIncorporation Expenses A/c Dr.To Share Capital A/cueIssAtAt premiumares to Promotersof Sh 100 is issued at 80E.g., when a share of 100 is issued at 120E.g., when a share of 100 is issued at 100E.g., when a share ofthe market price.shares at a price that is less thanto its employees to subscribe theOption granted by the companya specified time.by share holders withincapital which is not paidPortion of called-upfor calls not yet due.Special typayment of calls due.the shares for non –means cancelling Sweat equity sharesThe number of sharesapplied for is less thanthe number of sharesoffered for issue.OvernThe number ofshares appliedfor is more thanthe number ofshares offeredfor issue.Subscriptio Paid up capital Called – up capital Subscribed capital Issued capital Authorised capitalby the company by the issue of shares.Share capital means the capital raisedMeaning Right shares Bonus sharesis wound up.resS hafospeessome of allotteesesTypereturn of capital when the Companycompany and a preferential right toof dividend during the life-time of theeshareScnrehave preferential right to the paymentposition in a company.Forfeiture of sharesAccounting forShare Capitalcapital is divided.into which totalOne of the unitsRepresents ownershipPreference Shares are those whichChapter - 7pTyMoney paid bygroup of persons of a company.subscribe the securities to a selectedPrefAny offer of securities or invitation toMind map : learning made simpleOSWAAL CBSE Chapterwise Mind Maps, ACCOUNTANCY, Class - XII7rpa

be written off in the first yearpayable on debentures,payable is pre-fixed.Accounting forDebentures Interestissued as collateral security. Notsum on maturity – all the debentures are redeemed on theConditionsis calculated at a fixed rate Itof interest on the face value.is charged against profit. Itof debentures in instalments by draw of lots – thepart of debentures being selected by draw.company may redeem its debentures by payment, each year a Redemptionredemption date specified in the terms of issue of their maturity. Lumpbe written off in equalinstalments every year. Mayfrom statement of profit and loss.from securities premium reserve or MayVariousat premium and are redeemable at premiumare issued at par and are redeemable at premium Debentures Issuedare issued at premium and are redeemable at par Debenturesat discount and are redeemable at premiumare issued at discount but are redeemable at par Debentures Issuedare issued at par and are redeemable at par DebenturesIssue of debentures to vendors,Issue of debentures to purchase the business. give any other asset as a collateral security.when the borrower is not in a position toDebentures are issued as collateral securityIssue of debentures to promoters, at discount – issued at a price less than the face valueat premium – issued at higher price than the face valueat par – issued at nominal priceChapter - 8redemption of debenture.as dividend for the purpose ofprofits available for distributionIt is a reserve created out of Issue Issue IssueMind map : learning made simple8OSWAAL CBSE Chapterwise Mind Maps, ACCOUNTANCY, Class - XII