NCERT Solutions Class 12 Accountancy
NCERT Solutions for Class 12 Accountancy is provided here to learn accounting and perform extraordinary in Board Exams. Our accountancy experts have especially designed the solutions in a less complicated manner as per the latest CBSE Board Syllabus. These NCERT Solutions will guide learners to recognize the methods in a trouble-free manner.
Accounting plays important role in running a business because it helps you in tracking income and expenditures, ensure statutory compliance and provide investors, management and government with quantitative financial information which can be used in making business decisions. Proper study of accountancy will help the learners in almost every field in the future. The accounting information is essential for the management and the decision making of the body of an organization. A great knowledge of accounts will guide you to make your career better and brighter in the business field.
We have explained about all topics and account entries in detail and trouble-free manner, which will help learners in exams. We have covered the entire syllabus of Class 12 Accountancy for CBSE Board. These NCERT Solutions will help you to make your score higher in Board Exams as well as Competitive Exams. Learners can also practice these solutions in offline mode.
A list of chapters provided in Class 12 Accountancy NCERT Solutions free pdf.
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PART – 1
1) NCERT Solutions for Class 12 Accountancy Chapter 1 Accounting for Not-for-Profit Oganisation
A non-profit organization can choose cash accounting method or an accrual accounting method for recording its expenses and income. Cash accounting method records transaction amounts when the money trades hands. Students can easily download free pdf of NCERT Solutions for Class 12 Accountancy Chapter 1.
A list of topics from the chapter ‘Accounting for Not-for Profit Organisation’ 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 Organisation’-
- Partnership is defined as, ‘the relation between persons who have, agreed to share the profits of a business carried on by all or any of them acting for all’.
- Partnership is a separate business entity from accounting point of view, but from a legal viewpoint, partnership firm is not a separate legal entity from its partners.
- Interest on capital = amount of Capital × (Rate/100) × time
- Commission as percentage of net profit before charging such commission = net profit before commission × (rate of commission / 100)
- Commission as 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 funds in a partnership, the transaction involves a debit to the cash account and a credit to a separate capital account. A capital account records the balance of the investments from and distributions to a partner. Students can easily download free pdf of NCERT Solutions for Class 12 Accountancy Chapter 2.
A list of topics from the chapter ‘Accounting for Partnership: Basic concepts’ is given 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 go on increasing, which results in increase in the value of goodwill then it is known as Efficient management.
- If the firm is supplying good quality of products, then the customer will come again and again for the same and thus will create the goodwill and brand name for the same, it is called Quality of products.
- Goodwill = capitalized value of average profit – net assets
- Capitalised value of average profit = (Average profit / Normal rate of return ) × 100
- Net assets = all assets at their current values less outside liabilities.
- Goodwill = average profit × numbers of years of purchase
- Goodwill = weighted average of profit × numbers of years of purchase
- Goodwill = super profit × numbers of years of purchase
- Super profit = (Average / actual profit) – normal profit
- Normal profit = [(capital employed × rate of return) / 100]
- Goodwill = capitalized average profit – actual capital employed
- Goodwill = ( super profit × 100) / normal 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 reconstitution of the partnership firm. Reconstitution of a partnership firm takes place whenever 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 free pdf of NCERT Solutions for Class 12 Accountancy Chapter 3.
A list of topics from the chapter ‘Reconstitution of a 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 from the chapter ‘Reconstitutions of a partnership Firm – Admission of a partner’-
- A person can admitted as a new partner only with the consent of all the existing partners.
- Revaluation account is a nominal account which shows profit/loss arising because of revaluation of assets and liabilities.
- Sacrificing Ratio is the ratio in which the partners have agreed to sacrifice their share of profit in favour of other partner or partners. This ratio is calculated by taking out the difference between old profit share and new profit share.
Sacrificing Ratio = Old Ratio – New Ratio
- Gaining Ratio is the ratio in which the partners have agreed to gain their share of profit from other partner. This ratio is calculated by taking out the difference between new profit share and old profit share.
Gaining 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 goodwill is adjusted among the partners in gaining ratio with the share of goodwill of the retiring or the deceased partner at the time of retirement or at the event of death of a partner is called Reconstitution of a Partnership Firm. Students can easily download free pdf of NCERT Solutions for Class 12 Accountancy Chapter 4.
A list of topics from the chapter ‘Reconstitution of a 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 a Partnership Firm – Retirement/Death of a Partner’-
- Retirement of a partner means, leaving the firm by a partner. A partner has the right to retire from the firm by giving suitable notice to other partner.
- General reserve is distributed among all the partners in their old ratio.
- New profit Sharing Ratio is the ratio in which the remaining partners share future profits after retirement/death.
- If the specific funds such as workmen’s compensation funds or investment fluctuation fund are in excess of actual requirement, the excess will be transferred to the Capital A/c in old ratio, it is called Specific Funds.
5) NCERT Solutions for Class 12 Accountancy Chapter 5 Dissolution of Partnership Firm
The relationship between partners of firm is dissolved or terminated is called the process of Dissolution of partnership firm. If a relationship between all the partners of firm is dissolved then it is known as dissolution of firm. Students can easily download free pdf of NCERT Solutions for Class 12 Accountancy Chapter 5.
A list of topics from the chapter ‘Dissolution of Partnership Firm’ is given below-
- Dissolution of Partnership
- Dissolution of a Firm
- Settlement of Accounts
- Accounting Treatment
Some important points from the chapter ‘Dissolution of Partnership Firm’-
- In case of reconstitution of a firm,i.e., dissolution of a partnership, the firm continues, while in case of dissolution of a firm, the firm’s business is discontinued.
- Firm debt means the debt owed by the firm to outside parties as loan taken by the firm from bank.
- Private debt means the debt owed by the partner from other person personally.
- By Notice (Sec. 43): When the duration of the partnership firm is a fixed and it is at will of the partners. Any partner by giving notice other partners can dissolve the firm.
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 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 free pdf of NCERT Solutions for Class 12 Accountancy Chapter 1.
A list of topics from 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 (shareholders).
- A company has perpetual existence, not affected by the death, lunancy or insolvency of its shareholders.
- Share Capital is that part of the capital of a company, which is represented by the total nominal value of shares, which it has issued.
- Reserve Capital is that portion of uncalled share capital which shall not be capable of being called up except in the event and for the purpose of the company being wound up.
- Forfeiture of shares means cancellation of shares and seizure of the amount already received from defaulting shareholders.
- Securities are fungible and tradable financial instruments used to raise capital in public and private markets.
- An unearned premium reserve is maintained on an insurer’s balance sheet to reflect the unearned premiums that would be returned to policyholders if all policies were canceled on the date the balance sheet was prepared.
2) NCERT Solutions for Class 12 Accountancy Chapter 2 Issue and Redemption of Debentures
When the debentures are issued at a price less than its par value and redeemed at a price higher than its par value, then it is termed issue of debenture at discount and redeemable at premium. Students can easily download free pdf of NCERT Solutions for Class 12 Accountancy Chapter 2.
A list of topics from 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’-
- Debenture includes debenture stock, bonds and any other instrument of the company evidencing a debt, whether constituting a charge on the assets of the company or not.’
- Rond Bond is also an instrument of acknowledgement of debt. Bond is similar to debenture in terms of contents and texture. However, bonds can be issued without pre-determined rate of interest.
- When redemption is made at the expiry of a specific period, as per the terms of issue is called Redemption in Lump-sum.
- Redemption by draw of lots: In this method a certain proportion of debentures are redeem each, year, the debenture for which repayment is to be made is selected by draw of lots.
- If articles of association of a company authorize, it may purchases its own debentures from open market i.e. stock exchange is called Redemption by purchases in 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 free pdf of NCERT Solutions for Class 12 Accountancy Chapter 3.
A list of topics from the chapter ‘Financial Statement of a Company’ is given 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 statement of a company’-
- Balance Sheet is a statement of assets, liabilities and equities of a business and it is prepared to show the financial position of the company at particular date.
- An asset is a resource controlled by the enterprise as a result of past events Pam which future economic benefits are expected to flow to the enterprise.
- Liabilities is a present obligation of the enterprise arising from past events, the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits.
- The title of ‘profit and loss account’ is charged to statement of profit and loss. If shows the net result of business operations.
4) NCERT Solutions for Class 12 Accountancy Chapter 4 Analysis of Financial Statements
Analysis of Financial statement provides lending institutions with an unbiased view of a business’s financial health, which is helpful for making lending decisions. Students can easily download free pdf of NCERT Solutions for Class 12 Accountancy Chapter 4.
A list of topics from the chapter ‘Analysis of Financial Statements’ is 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 profitability, operating efficiency and financial stability of an enterprise.
- To measure the Profitability or Earning Capacity of the business -analysis helps in measuring the profits and earning capacity of business. it helps in judging 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 in judging the financial health of the business.
- To make Comparative Study within the firm (intra–firm) and with other firms (inter–firm)- analysis helps in comparisons of financial statements.
- To judge the efficiency of management- profits and assets of the business helps in judging the efficiency of the business i.e. whether the business is utilizing its resources in an efficient manner or not.
5) NCERT Solutions for Class 12 Accountancy Chapter 5 Accounting Ratios
An important sub-set of financial ratios, are a group of metrics used to measure the efficiency and profitability of a company based on its financial reports is called Accounting ratios. Students can easily download free pdf of NCERT Solutions for Class 12 Accountancy Chapter 5.
A list of topics from the chapter ‘Accounting Ratios’ 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 from the chapter ‘Accounting Ratios’-
- Liquid ratio or Quick ratio = liquid assets or quick assets / current liabilities
- Debt of equity ratio = Debt (long term external equities) / Equity (shareholder’s fund)
- Proprietary ratio = Proprieter’s fund or shareholder’s fund / Total assets
- Total assets to debt ratio = Total assets / long term debts
- Interest coverage ratio = Net profit before interest and tax / interest on long term debts
- Average inventory = (opening inventory + closing inventory) / 2
6) NCERT Solutions for Class 12 Accountancy Chapter 6 Cash Flow Statement
The cash generated and used during the time interval specified in its heading is called the cash flow statement. Generally, the period of time is the same as the income statement. Students can easily download free pdf of NCERT Solutions for Class 12 Accountancy Chapter 6.
A list of topics from 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 principal revenue producing activities of the enterprise and other activities that are not investing or financing activities.
- Financing activities are the activities that result in change in capital and borrowing of the enterprises.
- Investing activities is a section of the cash flow statement that shows the cash generated or spent relating to investment activities.
- To assess the causes of difference between actual cash & cash equivalent and related net earnings/income.
- When the net result of a transaction either increases or decreases in cash or cash equivalents, a cash flow rises.
Advantages of Solving Class 12 Accountancy NCERT Solutions
- NCERT Solutions provide a step-by-step explanation to every question given in the textbooks. It is one of the most valuable aids to students in their home assignments and exams as well.
- Solving these NCERT Solutions will help students clearing all their doubts.
- These NCERT Solutions are prepared as per the syllabus of the respective subject and thus, provide proper guidance with a thorough learning process.
- NCERT Solutions help in clearing the tough concepts as these NCERT Solutions are designed using proper explanations.
- To score optimum marks in the examination, the students need to practice these NCERT Solutions as it contains a variety of questions for practice purpose. This will help students to have an easy hand at the Erroneous Questions as well.
- While studying in CBSE Board Schools, students always get confused while choosing the right study material. Therefore, the best option is NCERT Solutions as it covers the whole CBSE Syllabus for Class 12 Accountancy.
- NCERT Solutions give significant learning and also helps students to upgrade their skills.
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