NCERT Solutions For Class 12 Accountancy15/07/2020 2021-10-25 18:01
NCERT Solutions For Class 12 Accountancy
NCERT Solutions Class 12 Accountancy
The NCERT Solutions for Class 12 Accountancy is provided here to help you learn Accounting and perform exceptionally well in the Board Exams. Our accountancy experts have specially designed the solutions in a less complicated manner as per the latest CBSE Board syllabus. These NCERT solutions will guide the learners to identify the methods in a hassle-free manner.
Accounting plays a vital role in running a business as it helps you keep track of income and expenses, ensures statutory compliance, and provides investors, management, and government with quantitative financial information that can be used in making business decisions. A proper study of accountancy will help the learners in almost every field in the future. Accounting information is essential for the management and decision-making of the body of an organization. Good knowledge of accounts will guide you to make your career better and brighter in the field of business.
We have explained all the topics and account entries in a detailed and hassle-free manner, which will help the learners in the exam. We have covered the complete syllabus of Class 12 Accountancy for the CBSE Board. These NCERT solutions will help you to make your score high in board exams as well as competitive exams. Learners can also practice these solutions in offline mode.
List of Chapters provided for Class 12 Accounts NCERT Solutions Free PDF.
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PART – 1
1) NCERT Solutions for Class 12 Accountancy Chapter 1 Accounting for Not-for-Profit Organization
A nonprofit organization may choose the cash accounting method or an accrual accounting method to record its expenses and income. The cash accounting method records transaction amounts when money is traded. Students can easily download a free PDF of NCERT Solutions for Class 12 Accountancy Chapter 1.
The list of topics in the chapter ‘Accounting for Non-Profit Organizations’ is given below-
- Meaning and Characteristics of Not-for Profit Organisition
- Accounting records of Not-for Profit Organisition
- Receipt and payment of Account
- Income and expenditure of Account
- Balance Sheet
- Some peculiar Items
- Income and Expenditure Account based on Trial Balance
- Incidental Trading Activity
Some important points from the chapter ‘Accounting for Not-for-Profit Organization: –
- The partnership has been defined as, ‘relationship between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.’
- The partnership is a separate business entity from an accounting point of view, but from a legal point of view, a partnership firm is not a separate legal entity from its partners.
- Interest on Capital = Amount of Capital × (Rate/100) × Time
- Commission as a percentage of net profit before charging such commission = Net profit before commission × (rate of commission / 100)
- Commission as a percentage of net profit after charging such commission = Net profit before commission × [(Rate of commission) / (100 + rate of commission)]
2) NCERT Solutions for Class 12 Accountancy Chapter 2 Accounting for Partnership: Basic Concepts
When a partner invests money in the partnership, the transaction includes a debit to the cash account and a credit to a separate capital account. A capital account records the balance of investments and distributions from a partner. Students can easily download a free PDF of NCERT Solutions for Class 12 Accountancy Chapter 2.
The topics of the chapter ‘Accounting for Partnership: Basic Concepts’ are listed below-
- Nature of Partnership
- Partnership Deed
- Special Aspects of partnership accounts
- Maintenance of capital accounts of partners
- Distribution of Profit among partners
- Guarantee of profit to a partner
- Past Adjustment
- Final Accounts
Some important points from the chapter ‘Accounting Partnership: Basic Concepts: –
- If the business is run by experienced and efficient management, its profits will continue to increase, increasing the value of goodwill, this is known as efficient management.
- If the firm is supplying good quality products, the customer will come to him again and again and thus create goodwill and brand name for him, this is called quality of products.
- Goodwill = Capitalized Value of Average Profit – Net Assets
- Capitalized Value of Average Profit = (Average Profit / Normal Rate of Return) × 100
- Net assets = all assets at their current values less external liabilities.
- Goodwill = Average profit × Number of years of purchase
- Goodwill = Weighted Average of Profit × Number of Years of Purchase
- Goodwill = High-profit × Number of years of purchase
- Super Profit = (Average / Actual Profit) – Normal Profit
- Ordinary profit = [(Capital employed × rate of return) / 100]
- Goodwill = Capitalized Average Profit – Actual Capital Employed
- Goodwill = (Super Profit × 100) / Simple Rate of Return
- 3) NCERT Solutions for Class 12 Accountancy Chapter 3 Reconstitution of a Partnership Firm – Admission of a Partner
Any change in the existing agreement is known as restructuring of the partnership firm. Reconstitution of a partnership firm occurs when there is a change in the profit-sharing ratio among the partners, admission of a new partner, retirement of a partner, and death or insolvency of a partner. Students can easily download a free PDF of NCERT Solutions for Class 12 Accountancy Chapter 3.
A list of the subjects of the chapter ‘Reconstitution of Partnership Firm – Admission of a Partner’ is given below-
- Modes of reconstitution of a partnership Firm
- Admission of a new partner
- New profit sharing ratio
- Sacrificing ratio
- Adjustment for accumulated profits and losses
- Revaluation of assets and reassessment of liabilities
- Adjustments of capitals
- Change in profit sharing ratio among the existing partners
Some important points of the chapter ‘Reconstitution of Partnership Firm – Admission of a Partner: –
- A person can enter as a new partner only with the consent of all the existing partners.
- A revaluation Account is a nominal account that shows profit/loss due to the revaluation of assets and liabilities.
- Sacrifice ratio is the ratio in which partners agree to sacrifice their share of profit in favor of another partner or partners. This ratio is calculated by taking the difference between the old profit share and the net profit share.
Disclaimer Ratio = Old Ratio – New Ratio
- The profit ratio is the ratio in which the partners agree to receive their share of profit from the other partner. This ratio is calculated by taking the difference between the new profit share and the old profit share.
Profit Ratio = New Ratio – Old Ratio
4) NCERT Solutions for Class 12 Accountancy Chapter 4 Reconstitution of a Partnership Firm- Retirement/Death of a Partner
The adjustment of goodwill between the partners at the time of retirement or in proportion to the share of goodwill of the deceased partner or in the event of death of any partner is called reconstitution of the partnership firm. Students can easily download a free PDF of NCERT Solutions for Class 12 Accountancy Chapter 4.
The list of subjects from the chapter ‘Reconstitution of Partnership Firm – Retirement/Death of a Partner’ is given below-
- Ascertaining the amount due to retiring/deceased partner
- New Profit Sharing Ratio
- Gaining Ratio
- Treatment of Goodwill
- Adjustment for revaluation of assets and liabilities
- Adjustment of accumulated profits and losses
- Adjustment of partner’s capital
- Death of a partner
Some important points from the chapter ‘Reconstitution of Partnership Firm – Retirement/Death of a Partner: –
- Retirement of a partner means leaving the firm by the partner. A partner has the right to retire from the firm by giving suitable notice to the other partner.
- The general reserve fund is distributed among all the partners in their old ratio.
- The new profit sharing ratio is the ratio in which the remaining partners share future profits after retirement/death.
- If the specified fund such as Workmen’s Compensation Fund or Investment Fluctuation Fund is more than the actual requirement, the excess will be transferred to the capital account in the old ratio, it is called the specified fund.
5) NCERT Solutions for Class 12 Accountancy Chapter 5 Dissolution of Partnership Firm
The relationship between the partners of the firm is dissolved or comes to an end, the process of dissolution of the partnership firm is called. If the relationship between all the partners of the firm is dissolved then it is known as dissolution of the firm. Students can easily download a free PDF of NCERT Solutions Class 12 Accounts Chapter 5.
A list of the subjects of the chapter ‘Dissolution of Partnership Firm’ is given below-
- Dissolution of Partnership
- Dissolution of a Firm
- Settlement of Accounts
- Accounting Treatment
Some important points of the chapter ‘Dissolution of Partnership Firm’: –
- In case of reorganization of a firm, i.e. in case of dissolution of the partnership, the firm continues, whereas in case of dissolution of the firm, the business of the firm ceases.
- A firm loan means a loan given by the firm to outside parties in the form of a loan taken from the bank.
- A personal loan means a loan taken personally by a partner from another person.
- By notice (section 43): When the term of the partnership firm is fixed and at the will of the partners. Any partner can dissolve the firm by giving notice to the other partners.
1) NCERT Solutions for Class 12 Accountancy Chapter 1 Accounting for Share Capital
The capital of a company is contributed by a large number of persons who are known as shareholders. These shareholders are issued shares of the company. The accounting of such transactions is called accounting for share capital. Students can easily download a free PDF of NCERT Solutions for Class 12 Accountancy Chapter 1.
A list of the subjects of the chapter ‘Accounting for Share Capital’ is given below-
- Features of Company
- Kinds of Companies
- Share Capital of a Company
- Nature and Classes of Shares
- Issue of Shares
- Accounting Treatment
- Forfeiture of Shares
Some important points from the chapter ‘Accounting for Share Capital’: –
- A company is a separate legal entity from its owner(s).
- A company has perpetual existence, not affected by the death, insanity, or bankruptcy of its shareholders.
- Share capital is that part of the company’s capital, which is represented by the total nominal value of the shares issued by it.
- Reserve capital is that part of the unsold share capital that cannot be withdrawn except in the event and purpose of winding up of the company.
- Forfeiture of shares means cancellation of shares and forfeiture of the amount already received from the defaulting shareholders.
- Securities are alternative and tradable financial instruments used to raise capital in the public and private markets.
- Unearned premiums are kept on the insurer’s balance sheet to reflect unearned premiums, which would be returned to policyholders if all policies were canceled on the date of preparation of the balance sheet.
2) NCERT Solutions for Class 12 Accountancy Chapter 2 Issue and Redemption of Debentures
When the debenture is issued at a price less than its par value and is redeemed at a price higher than its par, it is issued at a discount to the debenture and can be redeemed at a premium. Students can easily download a free PDF of NCERT Solutions for Class 12 Accountancy Chapter 2.
The list of subjects of the chapter ‘Issue and Redemption of Debentures’ is given below: –
- Meaning of Debentures
- Distinction between Shares and Debentures
- Types of Debentures
- Issue of debentures
- Over subscription
- Issue of debenture for consideration other than cash
- Issue of debenture as a collateral security
- Terms of issues of debenture
- Interest on Debenture
- Writing off discount / loss on issue of debenture
- Redemption of debentures
- Redemption by payment in Lump sum
- Redemption by purchase in open market
- Redemption by conversion
- Sinking fund method
Some important points from the chapter ‘Issue and Redemption of Debentures’: –
- Debentures include debentures, stocks, bonds and any other instrument of the company which gives evidence of any debt, whether charged on the assets of the company or not.’
- Rond Bond are also a means of approving loans. Bond is similar to debenture in terms of material and texture. However, bonds can be issued without a predetermined interest rate.
- When the redemption is done at the end of a specific period, it is called a lump sum redemption as per the terms of the issue.
- Redemption by Draw of Lots: In this method, a fixed proportion of the debentures are redeemed every year, the debentures for which the repayment is to be made, are chosen by a draw.
- If the Articles of Association of a company authorizes, it can buy its debentures from the open market i.e. the stock exchange is called redemption by purchase in the open market.
3) NCERT Solutions for Class 12 Accountancy Chapter 3 Financial Statement of a Company
Financial information can be found on the company’s Web page in Investor Relations where Securities and Exchange Commission (SEC) and other company reports are often kept. Students can easily download a free PDF of NCERT Solutions for Class 12 Accountancy Chapter 3.
The subjects of Chapter ‘Financial Statements of the Company’ are listed below-
- Meaning of financial statement
- Nature of financial statement
- Objectives of financial statement
- Types of financial statement
- Uses and importance of financial statement
- Limitations of financial statements
Some important points from the chapter ‘Financial Statements of the Company’: –
- The balance sheet is a statement of assets, liabilities, and equity of a business and is prepared to show the financial position of the company as on a particular date.
- An asset is a resource controlled by an enterprise as a result of past events, from which future economic benefits are expected to flow to the enterprise.
- Liabilities are a current obligation of the enterprise arising from past events, the settlement of which is expected to result in an outflow of resources from the enterprise with economic benefits.
- The head ‘Profit and Loss Account’ applies to the statement of profit and loss. If the business shows the net result of operations.
4) NCERT Solutions for Class 12 Accountancy Chapter 4 Analysis of Financial Statements
Analysis of financial statements gives lending institutions an unbiased view of the financial health of the business, which helps make lending decisions. Students can easily download a free PDF of NCERT Solutions for Class 12 Accounts Chapter 4.
The topics covered in the chapter ‘Analysis of Financial Statements’ are given below-
- Meaning of analysis of financial statements
- Significance of analysis of financial statements
- Objectives of analysis of financial statements
- Tools of analysis of financial statements
- Comparative statements
- Common Size Statement
- Limitations of Financial analysis
Some important points from the chapter ‘Analysis of Financial Statements’: –
- Financial statement analysis is useful in assessing the profitability, operational efficiency, and financial stability of an enterprise.
- To measure the profitability or earning potential of the business – Analysis helps to measure the profits and earning potential of the business. It helps in deciding whether the profits are accurate or not.
- To measure the financial strength of the business – Analysis helps in understanding the financial position of the company. It helps to judge the financial health of the business.
- The analysis helps in comparing the financial statements – to conduct a comparative study with the firm (intra-firm) and with other firms (inter-firm).
- To judge the efficiency of management- Profits and assets of the business help to judge the efficiency of the business i.e. whether the business is efficiently using its resources or not.
5) NCERT Solutions for Class 12 Accountancy Chapter 5 Accounting Ratios
An important sub-set of financial ratios is a group of metrics used to measure efficiency and profitability based on a company’s financial reports, called accounting ratios. Students can easily download a free PDF of NCERT Solutions Class 12 Accountancy Chapter 5.
The list of subjects of the chapter ‘Accounting Ratio’ is given below-
- Meaning of accounting ratios
- Objectives of ratios analysis
- Advantages of ratio analysis
- Limitations of ratios analysis
- Types of ratios
- Liquidity ratios
- Solvency ratios
- Activity ratios
- Profitability ratios
Some important points of the chapter ‘Accounting Ratio’: –
- Liquid Ratio or Quick Ratio = Liquid Assets or Quick Assets / Current Liabilities
- Debt to Equity Ratio = Debt (Long Term External Equity) / Equity (Shareholder’s Fund)
- Ownership Ratio = Owner Fund or Shareholder Fund / Net Assets As
- Net assets to debt ratio = Net assets / Long term debt
- Interest Coverage Ratio = Net Profit Before Interest and Taxes/Interest on Long Term Loans
- Average Inventory = (Opening Inventory + Closing Inventory) / 2
6) NCERT Solutions for Class 12 Accountancy Chapter 6 Cash Flow Statement
The cash generated and utilized during the time interval specified in its headline is called the cash flow statement. Generally, the time is the same as on the income statement. Students can easily download a free PDF of NCERT Solutions for Class 12 Accountancy Chapter 6.
The list of topics in the chapter ‘Cash Flow Statement’ is given below-
- Objectives of Cash Flow Statement
- Benefits of Cash Flow
- Cash and Cash Equivalents
- Cash Flows
- Classification of Activities for the Preparation of Cash Flow statement
- Ascertaining Cash Flow from Operating Activities
- Ascertaining of Cash Flow from Investing and Financing Activities
- Preparation of Cash Flow Statement
Some important points from the chapter ‘Cash Flow Statement’: –
- Operating activities are the major revenue-generating activities of the enterprise and other activities that are not investment or financing activities.
- Financial activities are those activities that result in changes in the capital and borrowings of enterprises.
- Investing activities is a section of the cash flow statement that shows the cash generated or spent related to investing activities.
- To assess the reasons for the difference between actual cash and cash equivalents and the corresponding net earnings/income.
- An increase in cash flow occurs when the net result of a transaction increases or decreases in cash or cash equivalents.
Benefits of Solving Class 12 Accountancy NCERT Solutions
- NCERT Solutions provides step by step explanation of every question given in the textbooks. It is one of the most valuable aids to the students in their homework and exams as well.
- Solving these NCERT solutions will help the students to clear all their doubts.
- These NCERT solutions are designed as per the syllabus of the subject concerned and thus, provide proper guidance along with the entire learning process.
- NCERT solutions help in clearing difficult concepts as these NCERT solutions are prepared using proper explanations.
- To score maximum marks in the exam, students need to practice these NCERT solutions as it consists of different types of questions for practice purpose. This will help the students to solve the wrong questions easily.
- While studying in CBSE board schools, students always get confused while selecting the right study material. Hence, the best option is NCERT Solutions as it covers the entire CBSE syllabus for Class 12 Accountancy.
- NCERT solutions give valuable education and also help students to upgrade their skills.
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