Accountancy Notes Class 12

by Yuvi K - October 25, 2023

Accountancy Notes for CBSE Class 12

For students appearing for class 12 examinations conducted by CBSE, accountancy is an important part of the curriculum. It consists of recording, classification and summarization of financial transactions along with analysis, interpretation and communication of financial statements relating to a business. The class 12 accountancy syllabus is divided into three sections viz. Theory, Practical and Project Work.

Fundamentals of Accounting

Accounting begins with the understanding of basic terms and concepts. Following are some of the terms which are widely used in accounting:

Assets (सम्पत्तियाँ): Assets are economic resources that are owned by a person or business entity.
Liabilities (दायित्व): Liabilities are obligations that are owed to someone.
Ledger (लेजर): Ledger is an accounting book where all the financial transactions relating to the business are recorded in a chronological order.
Journal (जर्नल): Journal is the book of primary entry where all the transactions are recorded at the time of their occurrence.
Trial Balance (ट्रायल बैलेंस): Trial Balance is a statement which lists all the ledger accounts and their balances at a particular point of time.
Depreciation (मूल्य गणना): Depreciation is the systematic allocation of depreciable assets cost over the asset’s useful life.

Accounting Process

Accounting process involves the four steps namely, identification, recording, summarization and analyzing a financial transaction.

Identification (पहचान): Identification is the process of recognizing and determining the source and nature of a financial transaction.
Recording (रिकॉर्डिंग): Recording is the process of capturing financial information relating to the transaction in the books of account.
Summarization (सारांश): Summarization is the process of computing the financial effects of the transactions before reporting them to management and other interested parties.
Analysis (विश्लेषण): Analysis is the process of interpreting the results of summarization to identify their implications for management decision-making.

Branch of Accounting

Accounting is a broad subject. It can be divided into five branches namely, financial accounting, management accounting, cost accounting, auditing and taxation.

Financial Accounting (वित्तीय लेखांकन): Financial Accounting covers the recording of business transactions which are then reported in the form of financial statements for external reporting purposes.
Management Accounting (प्रबंधन लेखांकन): Management Accounting deals with collecting and providing financial information to the internal management for decision making.
Cost Accounting (लागत अकाउंटिंग): Cost Accounting is the process of recording, classifying and summarizing costs related to a business activity.
Auditing (लेखापरीक्षण): Auditing is an independent examination of financial records for the purpose of verifying their accuracy and financial statements.
Taxation (कर): Taxation is a process of collecting taxes from individuals and businesses in accordance with the established laws.

These fundamental concepts and terminologies provided in the study of Accountancy Class 12 will provide the students a good basis to understand the subject better.