FINANCIAL ACCOUNTING

FULLY SOLVED BOOK LASY 5 YEARS PAPERS SOLVED PLUS GUESS

2.3 FINANCIAL ACCOUNTING OBJECTIVE:
The objective of this subject is to acquaint students with the accounting concepts, tools and Techniques
influencing Business Organizations.
Unit 1: INSURANCE CLAIMS 
Introduction – Need – Policy for Loss of Stock – Steps for ascertaining Fire insurance claim – Treatment of
Salvage – Average Clause –Computation of Fire insurance claims.
Unit 2: HIRE PURCHASE AND INSTALLMENT SYSTEMS 
Introduction – Meaning – Hire Purchase Act 1972 – Important Definitions – Hire Purchase Agreement –
Hire Purchase Price – Cash Price – Hire Purchase Charges – Net Hire Purchase Price – Net Cash Price –
Calculation of Interest – Calculation of Cash Price – Journal Entries and Ledger Accounts in the books of
Hire Purchaser and Hire Vendor. Installment System – Meaning – Features – Differences between Hire
Purchase System and Installment Purchase System (Theory only)
Unit 3: ROYALTY ACCOUNTS 
Introduction – Meaning – Technical Terms – Royalty – Landlord – Tenant – Minimum Rent – Short
Workings – Recoupment of Short Working under Fixed Period – Floating Period – Recoupment within the
Life of a Lease – Treatment of Strike and Stoppage of work – Accounting Treatment in the books of Lessee
– Preparation of Ledger Accounts – Royalty Account – Landlord Account – Short Workings Account –
Minimum Rent Account when Minimum Rent Account is required.
Unit 4: SALE OF PARTNERSHIP TO A LIMITED COMPANY 
Introduction – Need for conversion - Meaning of Purchase Consideration – Mode of Discharge of Purchase
Consideration – Method of calculation of Purchase Consideration – Net Payment Method – Net Asset
Method – Passing of Journal Entries and Preparation of Ledger Accounts in the books of Vendor –
Treatment of certain items – Dissolution Expenses – Unrecorded Assets and Liabilities – Assets and
Liabilities not taken over by the Purchasing Company – Contingent liabilities – Non-assumption of trade
liabilities – Passing of Incorporation entries in the books of Purchasing Company.
Unit 5: ISSUE OF SHARES
Meaning of Share, Types of Shares – Preference shares and Equity shares – Issue of Shares at par, at
Premium, at Discount, Pro – Rata Allotment – Journal Entries and Bank Accounts – Preparation of Balance
Sheet in the Vertical form.