Syllabus (COMMERCE)

Course Type: MAJ-1

Semester: 1

Course Code: BBCOMMAJ01T

Course Title: Financial Accounting and Cost Accounting

(L-P-Tu): 5-0-1

Credit: 6

Practical/Theory: Theory

Course Objective: This course aims to: 1. Provides conceptual knowledge of financial accounting and impart skills for recording various kinds of business transactions and preparing financial statement of sole proprietorship business entities; 2. Create awareness about the standards for reporting financial statements; 3. Enable the students to understand the various techniques in maintaining accounts for partnership business; 4. Develop understanding among learners about contemporary cost concept and rational approach towards cost systems for identification, classification and analysis of cost components; 5. Provide knowledge for cost ascertainment in different industries using various costing methods; 6. The course also aims to provide knowledge about various methods of cost determination under specific situations and to acquire the ability to use information determined through cost accounting for decision making purpose.

Learning Outcome: After completion of the course, learners will be able to: 1. Apply the prescribed accounting standards while recording transactions and preparing financial statements; 2. Measure business income applying relevant Accounting Standards. 3. Know the accounting treatments for a partnership-firm and also for its insolvency 4. Determine various types of cost of production; 5. Compute unit cost and total cost of production and prepare cost statement; 6. Compute employee cost, employee productivity, and employee turnover and apply activity-based costing for cost determination

Subject: Financial Accounting and Cost Accounting

Module-I: Financial Accounting

Unit 1: Theoretical Framework (Lectures:10 )

Accounting as an information system, the users of financial accounting information and their needs; Qualitative characteristics of accounting, information. Functions, advantages and limitations of accounting; Branches of accounting; Bases of accounting- cash basis and accrual basis of accounting.

The nature of financial accounting principles; Basic concepts and conventions: entity, money measurement, going concern, cost, realization, accruals, periodicity, consistency, prudence (conservatism), materiality, matching and full disclosures.

Financial Accounting Standards: Concept, benefits, procedure for issuing accounting standards in India, International Financial Reporting Standards (IFRS)- Need and procedures.

Unit 2: Final Accounts (Lectures: 15)

Preparation of financial statements of sole proprietorship business entities from trial balance-Trading, Profit & Loss Account and Balance Sheet, Rectification of errors.

Unit 3: Partnership Accounts (Lectures: 15)

Profit & Loss Appropriation Account, Capital and Current account, Guarantee-by firm or by partner(s) or by both. Rectification of the wrong appropriation with retrospective effect; Change in profit sharing ratios, Treatment of goodwill. revaluation of assets and liabilities Admission and retirement of partner(s), and Death of a partner.

Dissolution of partnership- insolvency of one or more partners, piecemeal distribution- surplus capital method and maximum loss method

Module-II: Cost Accounting

Unit 4: Introduction (Lectures: 10)

Definition of Costing, Cost accounting and management accounting. Objectives of cost accounting. Importance of cost accounting in business, Relationship among cost accounting, management accounting and financial accounting, Relationship with financial management. Advantages of cost accounting system, Installation of cost accounting system, Essentials of good costing system.

Cost, Cost Object, Cost Units and Cost Centre; Types of costs and classification of costs. Cost sheet-total cost and unit cost; Costing methods and techniques. Preparation of Cost Sheet.

Unit 5: Material and Labour Cost (Lectures: 15)

Purchase, Storage- functions of storekeeper, requisition, receipt, issue and transfer of materials. Storage records and accounting for materials.

Materials control- Just-in-time purchase, stock levels, EOQ and ABC analysis, periodic and perpetual inventory. Physical verification, discrepancies in stock and their treatment. Turnover of stock.

Methods of pricing of materials, Advantages and disadvantages of different methods of pricing, comparative analysis and stock valuation for balance sheet; Treatment for normal and abnormal loss, wastes, scrap, spoilage and defectives.

Labour Cost: Introduction, Time booking, Payroll, payment of wages, Idle Time and Overtime- causes, effects and treatment in cost accounting.

Labour turnover- Causes and methods of calculation, Cost of labour turnover.

Incentive system-Main principles for a sound system of wage incentive schemes, Labour utilization, Distinction between direct and indirect labour cost, and System of wage payment and incentives. System of incentive schemes for indirect workers, Components of wages for costing purposes, Absorption of wages, Efficiency rating procedure.

Unit 6: Overhead (Lectures: 10)

Definition, Classification of overhead-element wise, functional and behavioural; Need for classification of overhead into fixed, variable and semi-variable, Various types of overhead.

Manufacturing Overhead- allocation and apportionment, Absorption of overhead- methods and their application; Treatment of over and/or under absorption of overhead, Basic Concepts of different capacities.

Reading References:

Basu and Das, Practice in Accountancy, Rabindra Library, Kolkata.

Belverd E. Needles & Marian Powers, Financial Accounting: (with IFRS), Cengage Learning.

Bhattacharya, Asish K., Accounting for Managers, PHI Learning.

Dhamija, Financial Accounting For Managers, Pearson Education.

Ghosh, T.P., Financial Accounting for Managers, Taxmann Publications.

Goldwin, Alderman and Sanyal, Financial Accounting, Cengage Learning.

Goyal & Goyal, Financial Accounting, PHI Learning.

Horngren, Charles T., Introduction to Financial Accounting, Pearson Education.

Lal, Jawahar & Srivastava, Seema, Financial Accounting, S. Chand and Co.

Maheshwari, S.N. & Maheshwari, S.K., Financial Accounting. Vikas Publishing House.

Mukherjee, Amitabha & Hanif; Mohammed, Modern Accountancy, Tata McGraw-Hill.

Paul, S.K., Accountancy, New Central Book Agency, Kolkata.

Sehgal, Deepak, Financial Accounting, Vikas Publishing House.

Tulsian, P.C. & Tulsian Bharat, Financial Accounting, S.Chand & Co.

Kishore, Ravi M., Cost Accounting, Taxamnn Publications.

Lal, Jawahar, Cost Accounting, Mc-Graw Hill Education.

Maheshwari, S.N. & Mittal, S.N., Cost Accounting: Theory and Problems, Shri Mahavir Book Depot, New Delhi.

Mitra, J.K., Advanced Cost Accounting, New Age International.

Nigam, B.M., Lall & Jain, I.C., Cost Accounting: Principles and Practice. PHI Learning.

Paul, S.K., Practical Cost and Management Accounting, New Central Book Agency, Kolkata.

Pillai, R.S.N. & Bagavathi, V., Cost Accounting, S. Chand.

Singh, Surender, Cost Accounting, Scholar Tech Press, New Delhi.

Tulsian, P.C., Tulsian, B. & Arora, M.N., Cost Accounting, S.Chand.

Thukaram Rao, M.E., Cost Accounting, New Age International.