Theory Based Accounting

  

Introduction to Accounting

• Definition and Functions: Accounting is a process of recording, classifying, summarizing, and interpreting financial information. It helps in the systematic recording of business transactions, preparation of financial statements, and providing information to users for decision-making.
• Users of Accounting Information: Includes internal users (management, employees) and external users (investors, creditors, government).
• Basic Accounting Terms: Assets, Liabilities, Capital, Revenue, Expenses, etc.

2. Theory Base of Accounting

• Accounting Concepts and Principles: Fundamental concepts like Going Concern, Accrual Basis, Conservatism, Consistency, and Materiality.
• Accounting Standards: Brief overview of Indian Accounting Standards (Ind AS) and their importance.

3. Recording of Business Transactions

• Journal Entries: The process of recording transactions in a journal using the double-entry bookkeeping system.
• Ledger Posting: Transferring entries from the journal to respective accounts in the ledger.
• Trial Balance: Preparation of trial balance to check the arithmetical accuracy of accounts.

4. Preparation of Financial Statements

• Trading and Profit & Loss Account: Preparation of Trading account for calculating Gross Profit/Loss and Profit & Loss account for Net Profit/Loss.
• Balance Sheet: Preparation of Balance Sheet to represent the financial position of a business on a particular date.

5. Bank Reconciliation Statement

• Understanding the need for a Bank Reconciliation Statement (BRS) and the process of preparing a BRS to reconcile the bank balance as per cash book with the balance as per bank statement.

6. Depreciation, Provisions, and Reserves

• Depreciation: The process of allocating the cost of tangible assets over its useful life. Methods of calculating depreciation - Straight Line Method (SLM) and Written Down Value (WDV).
• Provisions and Reserves: Concept and importance of creating provisions and reserves in accounting.

7. Bills of Exchange

• Understanding the concept, features, and accounting treatment of Bills of Exchange used in business transactions.

8. Rectification of Errors

• Identifying and rectifying common types of errors in accounting records that do not affect the trial balance and those that do.

This overview provides a basic theoretical foundation for CBSE Class 11 Accountancy. For comprehensive study, students should refer to their textbooks, class notes, and additional resources recommended by their teachers. Practice problems, previous years' question papers, and sample papers are also essential for exam preparation.