VOCATIONAL HIGHER SECONDARY

TEACHERS SOURCEBOOK

ACCOUNTANCY AND AUDITING

SECOND YEAR

Government of Kerala Department of Education 2006

STATE COUNCIL OF EDUCATIONAL RESEARCH AN D TRAINING (SCERT) Vidyabhavan, Poojappura, Thiruvananthapuram-12

Prepared by: State Council of Educational Research & Training (SCERT) Vidyabhavan, Poojappura, Thiruvananthapuram -12 Kerala
E-mail:scertkerala@asianetindia.com

Type setting by: SCERT Computer Lab. Government of Kerala Education Department 2006

Preface
Dear Teacher

This Teachers Sourcebook on Accountancy & Auditing introduces the teacher to the main principles and practices of the revised pedagogy which is activity-based, process-oriented and learner-centred. The realisation that learning is not mere storing information in memory and that real learning is construction of knowledge through observation, comparison, classification and analysis has led us to give a new thrust to the teaching-learning process at Vocational Higher Secondary level to make it more meaningful and learner-friendly. This sourcebook has been developed primarily for the benefit of teachers who teach Accountancy & Auditing at Vocational Higher Secondary level. The subject matter has been dealt with utmost care, in tune with the revised curriculum and pedagogic principles. It is hoped that this book will enable the teacher to provide suitable learning activities for effective learning. The success of the approach depends upon the vision and commitment of the teacher. They are expected to make use of this sourcebook at all stages of their teaching process. It is also expected that the teacher would seek help and guidance from other sources like libraries and websites. Hope that this sourcebook w help the teacher to develop the skills and ill experience required for effective classroom transaction. Creative criticism and suggestions for improvement are most welcome.
With regards Thiruananthapuram July, 2006 Dr. E. Valsala K umar Director SCERT

Contents
Part I

I
II III IV V

Approach General .................................................................5 Learning Strategies ...................................................................27 Curriculum Objectives and syllabus .........................................40 Planning ...................................................................................47 Evaluation .................................................................................51

Part II
1. Financial Accounting................................................................64 1.1 Bank Reconciliation statement 1.2 Rectification of errors 2. Cost Accounting.............................................................................78 2.1 Material 2.2 Labour 2.3 Overheads 3. Auditing .........................................................................................115 3.1 Conduct of audit. 3.2 Audit Report 4. Taxation .........................................................................................128 4.1 Income Tax Act, 1961 4.2 Residence and tax liability 4.3 Assessment and returns

Part III
Appendix ..........................................................................................145 1. List of items included in record. 2. Reference Books

APPROACH
Significance of vocational education
The ultimate aim of education is human refinement. Education should enable the learner to formulate a positive outlook towards life and to accept a stand which suits the well being of the society and the individual as well. The attitude and potential to work has determined the destiny, progress and cultural development of the human race. As we all are aware, the objective of education to form a society and individuals having a positive work culture. The educational process expected in and outside our formal schools should concentrate upon inculcating concepts, abilities, attitudes and values in tune with these work culture. Hence vocationalised education cannot be isolated from the main stream of education. In another sense, every educational process should be vocationalised. However due to our inability to utilize the resources wisely, scarcity of job opportunities is a severe issue of the present society. For overcoming this deep crisis, emergent techniques have to be sorted out and appropriate researches have to be seriously carried out. It is in the sense that the content and methodology and world of of Vocational education Higher is well Secondary recognized. Education The have to of be the approached. The need for meaningful linkages between the world of work essence recommendations made by various commissions and committees is that the vocationalisation should be the main feature of the future system of education at the higher secondary stage, it can be extended to school level also. Vocational education is system of education which intends to prepare learners for identified occupations , spanning several areas of activities. The Vocational Higher Secondary course was envisaged as a part of the National Policy on Education with the noble idea of securing a job along

with education. The relevance of vocational education is very great in this age of unemployment. This education system, which ensures a job along with higher education stands aloof from other systems of education. This education imparts the life skills required by the youth to enter the world of work and assuming the responsibilities of adulthood. As per the expert meeting report (2001) of UNESCO, the life skills are grouped under 4 categories. They are 1. Skills for personal fulfillment 2. Skills for living in society 3. Skills fo r dealing with changing economic s 4. Skills for dealing with changing work patterns. Vocational Education ensures fulfilment of manpower requirement or national development and for social security for the citizens through selfemployment. It also helps to reduce the migration of rural youth to urban areas and thus helps in rural development. The learners of Vocational Education get an opportunity to avail one year apprenticeship training in industries to improve their practical skill. During the course of study, on the job training (OJT) for 10 days in a year is arranged to improve the skill and efficiency of the learner. This education system motivates the attitude towards self employment through Production Cum Service Training Centres. (PSTC)

Objective of Vocational Education

The National policy on education has accorded very high priority to the programme of vocationalisation of education, considering the following objectives. 1. To fulfil national goals of development and the removal of unemployment and poverty. 2. To impart education relevant to increased production and productivity, economic development and individual prosperity . 3. To make available skilled work force at all levels to alleviate the rural unemployment and for the development of nation.

4. To develop environmental awareness to ensure sustainable development. 5. To develop vocational aptitude, work culture, values and attitudes of the learners so as to enrich the productivity of the nation. 6. To develop entrepreneurial competencies and skills of learners for self reliance and to undertake gainful self employment. 7. To facilitate the expansion of higher education and explore future opportunities through innovative guidance and programmes. 8. To develop vocational competencies, creative thinking in the related areas and facilitate training. 9. To create awareness on mental, physical and social health. 10.To acquire awareness about different job areas and to provide

backgrounds for acquiring higher level training in subjects concerned.

Learning
Learning is construction of knowledge through a continuous mental process. It is advancement through adding and correcting in the light of comparing the new issue with the previously learned concepts. It is an intellectual process rather than the mere memorization of facts. Learning is a conglomeration of a variety of activities like problem solving, finding out co-relations, prediction, arriving at conclusions, rational as well as critical thinking, finding applications, grouping for other possibilities and extracting the crux when opportunities are provided for intellectual processes learning will become effective and intellectual ability will get strengthened.

Theoretical foundations of learning

Education is the best device that can be adopted for creation of a new society. It should be democratic in content and process and should acknowledge the rights of the learner. It should also provide opportunity for better citizenship training. The concept of equality at all areas should get recognition in theory and practice. They should be able to view education and life with the perspective of social well being. They should get opportunity to recognize that co-operation

is better than competition and co-operation is the key to social life and culture. A basic awareness of all the subjects needed for life is essential for all learners. The remnants of perspectives formed in us during the colonial period still influence our educational philosophy. The solution to the present day perplexities of the society which approaches education on the basis of competitions and marketisation is only a comprehensive view of life. It is high time that education was recognized on the basis of the philosophy of human education. The human approach to education has to reflect in its content, learning process and outlook. The perspective of learning to be and learning to live together as expressed by the UNESCO should be highlighted. The basis of new approaches on curriculum and teaching- learning process are derived from the developments took place in the east and west of the world. When we begin to see the learner at the centre of the learning process, the teaching process has to be changed timely. It is the result of the rapid growth and development of Science and Technology and Pedagogy. If we want to undergo the changing process, we have to imbibe the modern hypothesis regarding learner that they have great curiosity good imagination numerous other qualities and interests independent individuality interest in free thinking and working in a fearless atmosphere. interest in enquiring and questioning. ability to reach conclusions after logical thinking. ability for manifest and establish freely the conclusions arrived at. interest for recognition in the society.

determination to face the interference of socie ty and make components which is a part of social life. .When we consider the learning system, the domains to be stressed in

education according to the modern development becomes relevant.

The knowledge domain consists of

Facts Ideas Laws The temporary conclusions and principles used presently by scientists. Learning is a process. The continuous procedures we undergo to reach a particular goal is process. The skills which are parts of the process to analyze the collected ideas and proofs and come to a conclusion is called process skills. Some important process skills are,

the skills;
To observe To collect data and record To classify To measure and prepare charts To experiment To predict To recognize and control the variables To raise question To generalize To form a hypothesis and check. To conclude To communicate To predict and infer To use tools.

Observation is the process of acquiring knowledge through the senses. It is purely objective oriented. Learning experiences which provide the use all the sense may be used. The process of grouping is known as classifying. Starting from simple groupings of data, it can extend to the level of classification into minute subgroups. In addition to this, consider the skills related to creative domain also, they are

skills:
To visualize To connect facts and ideas in new ways. To find out new and uncommon uses of objects To fantasize To dream To develop cre ative isolated thoughts Creativity is an essential component of process and activities. The element of creativity is involved in finding out problems, formation of hypothesis, finding solutions to problems etc. Through activity oriented learning experiences, opportunities to express creativity can be created. Again, the following factors consisting in the Attitudinal domain are also important as; Self confidence Love for scientific knowledge Attitude to know and value history Respect human emotions Decide with reasonable present problems Take logical decisions ragarding personal values Hypothesis is a temporary conclusion drawn using insight. Based on knowledge and experiences relating to the problems the causes and solutions can be guessed.

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As regards the application domain the important factors are the ability to: observe in daily life examples of ideas acquired. take the help of scientific process to solve the problems of daily life. choose a scientific life style connect the ideas acquired with other subjects. integrate the subjects with other subjects. Some basic stands have to be taken on the new scientific knowledge about intelligence learning and teaching. When such basic concepts are accepted changes are required in the following factors. The vision, approach, structure and content of the curriculum. The vision, approach, structure and content of the textbooks. Role of the teacher and the learner. Learner atmosphere, learning materials and learning techniques. Some scientific perspectives accepte d by modem world in educational psychology are given below.

Constructivism
This approach puts forward the concept that the learner constructs knowledge. New knowledge is constructed when ideas are examined and practiced in new situations relating them with the previously acquired knowledge and experience. That is assimilated into the cognitive structure of ones knowledge. This method which gives priority to critical thinking and problem solving provides opportunity for self motivated learning.

Social Constructivism
Social constructivism is a sub section of constructivism. Knowledge is formed, spread and imbibed and it becomes relevant in a social environment. Interactive learning, group learning, co-operative participatory learning, all these are concepts put forward by social constructivism. The main propounders of constructivism are Piaget, Vygotsky and Bruner.

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Discovery learning and interactive learning have prime importance. Learning takes place as a part of the attempt for problem solving. The activities of a learner who confronts cognitive disequilibrium in a learning situation when he tries to overcome it leades to the renewal of cognitive structure. it is through this process construction of new knowledge and the assimilation of them take place. Observation and enquiry are unavoidable factors. The learner advances towards new areas of acquisition of knowledge where he tries to compare his new findings with the existing concepts. Learning is a live mental process. Rather than the ability for memorization of facts cognitive process has to be given emphasis. The process of problem analysis, elucidation, critical thinking, rational thinking, finding out co-relation, prediction, hypothesis formation, application, probing for other possibilities, extracting the crux and other processes are of critical importance in learning. Constructivism gives greater predominance to co-operative learning. Social and cultural factors influence learning. Sharing of knowledge and experience improvement, among group learners, activity collective and enquiry, assessment by and collaborative learning sharing

responsibilities with the objective of public activity, provide opportunity for effective learning. In learning internal motivation is more important than external motivation. The learner should have interest and initiative in learning. Learning situation should be capable of forming a sense of ownership in the learner regarding the learning process. Learning is not a linear process. It progresses in a spiraled way advancing deeper and wider.

New concepts of Learning

1. Discovery Learning The teacher has to create a motivating atmosphere for the learner to discover concepts and facts, instead of listening always. Creating occasion to progress towards discovery is preferred. Instead of telling everything

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before and compelling to initiate the models, situations are to be created to help the children act models as themselves. 2. Learning by discussion Discussion leads to learn is Burners theory. Here discussion is not opposing each other. It is a sharing on the plane of ideas. New ideas are arrived at by seeking explanations, by mutual giving and taking of ideas and by problem solving. 3. Problem solving and learning Only when the learner feels that some thing is a problem to be solved that he takes the responsibility of learning it. It is an inborn tendency to act to solve a problem that causes cognitive disequilibrium in a particular area. It is also needed to have confidence that one is capable of doing it. The problems are to be presented in consideration of the ability and level of attainment of the learner. 4. Collaborative learning This is the learning in which the responsibilities are distributed among the members of the group keeping common learning objectives. The common responsibility of the group will be successful only if each member discharges his duties. All the members will reach a stage of sharing the result of learning, equally through the activity with mutual understanding. The teachers who arrange collaborative learning will have to make clear the responsibilities to be discharged. This is possible through the discussion with the learners. Collaborative learning will help to avoid the situations of one person working for the whole group. 5. Co-operative learning This is the learning in which the learners help one another. Those who have more knowledge, experience and competency, will help others. By this exchange of resources the learners develop a plane of social system in learning also. As there are no high ups and low ones according to status among the learners they can ask the fellow learners doubts and for helps without any hesitation or in hesitation Care should be taken not to lead this seeking of help to mechanical copying. It should be on the basis of actual

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needs. So even while encouraging this exchange of ideas, among the members of the group cautious acceptance is to be observed as a convention. There should be an understanding that satisfactory responses should come from each member and that the achievement of the group will be assessed on the basis of the achievement of all the members 6. Zone of Proximal Development Vygotsky observes that there is a stage of achievement where a learner can reach by himself and another higher zone where he can reach with the help of his teachers and peers and elders. Even though some can fulfill the learning activity by themselves there is the possibility of a higher excellence. If appropriate help is forth covering every learner can better himself. 7. Scaffolding It is natural that the learner may not be able to complete his work if he does not get support at the proper-time-The learner may require the help of the teacher in several learning activities. Here helping means to make the learner complete the activity taking r esponsibility by himself. The teacher has to keep in mind the objective of enabling the learner to take the responsibility and to make it successful. 8. Learning an active mental process Learning being a cognitive process, the teacher needs to know cognitive processes to facilitate the creation of learning opportunities. Learning can be made effective by providing learning experiences involving mental processes like Retrieves/recollects/retells information Readily makes connections to new information base d on past

experiences and formulates initial ideas /concepts. Detects similarities and differences Classifies/categorise/organizes information approximately. Translates/transfer knowledge or understanding and applies them in a new situation. Establishes c ause -effect relationships

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Makes connections/relates prior knowledge to new information/applies reasoning and draw inferences Communicates knowledge/understanding through different media. Imagines/fantasises/designs/predicts based on received information Judges /appraises/evaluates the merits or demerits of an idea/develops own solutions to a problem.

9. Intrinsic Motivation Intrinsic motivation is given more importance than extrinsic motivation. The teacher has to arouse the internal motivation of the learner. A person internally motivated alone can immerse in learning and own its

responsibility.

Components of intelligence
1. Verbal/Linguistic intelligence The ability for reading, writing, verbal production speak and communicate effectively belong to this type. This type of intelligence can be developed through activities such as oral communication, report writing etc. 2. Logical/Mathematical intelligence. Abilities like logical thinking and finding out patterns and relations belong to this component. This type of intelligence developed through establishing relationships and mathematical operations. 3. Visual/Spatial intelligence People with prominently visual/spatial intelligence will be able to design models and execute ideas they have. Architects, designers and sculptures will be strong in this type of intelligence. Model building, making of art material, painting and drawing will help this component develop. 4. Bodily/ Kinesthetic intelligence. This intelligence is related to the ability to move the body parts. Dancers, actors and sports people who can move the body aesthetically and express emotions through body movements belong to this category. Activities involving Dance, aerobic, sports and games help the development of this type of intelligence.

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11. Musical intelligence. It is believed that this type of intelligence is highly developed in people with the ability to distinguish the different elements in music, performing musicians and those who can appreciate music. Playing musical instruments, singing along with others, keeping rhythm etc are activities that help the development of this component. 12. Interpersonal intelligence People who demonstrate leadership qualities and are able to interact in a positive way with others will have a better developed interpersonal intelligence. They can understand the thinking of others and can successfully involve in negotiation activities. Role play and group activities can be used to cultivate this intelligence. 7. Intrapersonal Intelligence This is the ability to understand oneself. These people can recognize their own abilities and disabilities. Writing diaries truthfully and in an analyzing way and assessing the ideas and activities of others will help developing this areas of intelligence 8. Naturalistic Intelligence A great in terest in the flora and fauna of the nature, love towards fellow beings interest in spiritual and natural factors will be capable of developing this area. 9. Existential Intelligence The ability to see and distinguish ours own existence as a part of the universe, ability to distinguish the meaning and meaninglessness of life, the ability to realize the ultimate nature of mental and physical existences, all these re the peculiarities of this faculty of intelligence. 10. Emotional Intelligence The concept of emotional intelligence put forward by Daniel Golman was used in framing the new curriculum. The fact that ones Emotional Quotient (E.Q) is the greatest factor affecting success in life is now widely accepted. The teacher who aims to focus on improving the emotional intelligence of learners need to concentrate on the following.

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i) Ability to take decisions Rather than imposing decision on learners while planning and executing activities, the learners may be allowed to take part in the decision making process. Taking decisions through open discussion in the class, inviting learners suggestions on common problems etc. are habits to be cultivated. ii) Ability to reach consensus When different opinions, ideas and positions arise, the learners may be given the responsibility to reach a consensus. Imagining what would be the course of action in some situtations, allowing to intervene in a healthy way in problems between individuals. iii) Problem solving Developing the idea that there is reason and solution to any problem. Training in finding reasons for problems. Suggesting solutions through individual or group efforts. Discussing social problems. Analyzing the shortcomings in methods to solve problems. Whether plastic can be banned within school premises can be given as a problem. Group discussion will provide reasons and solutions. Problems which can influence classroom learning and for which the learner can actively contribute solution need to be posed Self criticism, evaluation Ability to face problem-situation in life Thinking what one would do if placed in the situation of others, how one would respond to certain experiences of others - All these foster the growth of emotional intelligence. iv) Life skills Life skills need to be given a prominent place in education. W.H.O. has listed : skills required for-success in life. Self awareness Empathy Inter personal relations

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Communication Critical thinking Creative thinking Decision making Problem solving Coping with emotion Coping with stress The new curriculum addresses these areas. Knowing the characteristics of the learner, role of the teacher and how

to use the teachers handbook help the teacher to plan and effectively implement learning activities.

Role of a Vocational Teacher

In the e arlier approach the teacher was mainly depending on the lecture method for teaching. But in the new method of education the learner centered approach in given more importance than the teacher centered approach. Under this changed scenario the vocational teacher has to perform the following roles in the classroom. The Vocational teacher should be A facilitator of learning A guide to the overall development of the learner A good observer and motivator Able to consider the activities, needs, special features and age group of learners at higher secondary level. Able to understand the limitations of learner and their learning problems. An instructional material developers A good communicator An innovator Able to raise leadership qualities and self confidence of the learner An authoritarian in the concerned subject

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Able to arrest and sustain the attention of the learner Able to bring out and encourage the inborn talents. A resource manager to ensure the optimum utilization of resources. A systematic record keeper A counselor to issue guidance to the learner. A person with high level of practical competency Able to co-relate area of study with familiar environmental situations A self evaluator and good listener Able to create awareness in social problems A person with democratic and humanitarian approach A professionalist as well as philosopher A good evaluator A good organizer and a friend. A co-learner as well as co-researcher Able to give assistance and advice in placement needs and self employment by giving moral and technical support Able to keep moral values A person equipped with skill for using new techniques of learning Optimistic and impartial

Child friendly Class Room Atmosphere

Learning can be effective and enjoyable only when the class atmosphere is according to the new conception of learning and the characteristics of higher secondary learner. Class and seating are arranged in an attractive way Democratic nature is upheld Always active Learners interact with teachers without fear Opportunity for a variety of activities Learners allowed to involve interesting group activities

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Learning speed, learning style and differencing levels of attitudes are considered. Help is extended whenever needed. Sufficient instructional materials are available There is freedom of expression, learners share their ideas and

experiences Learners are given acceptance and encouragement Healthy atmosphere Needs of each learner is given consideration. Happy and energetic atmosphere Teachers work considering the rights of learners Problems handled in a patient way Teachers look at all events from the learners view point There will be learners of various ability levels in every class because learning style, learning speed, varying exposure to language experiences, physical and psychological problems and varying socio-cultural background. The learning experiences provided must help to bring the low activities to an expected level and extended the breadth and depth of the skills of the high activities. By repeating experiences, introducing variations in a learning experience to suit different levels and if needed, formulating additional experiences the problem of varying ability levels can be tackled.

Role of Learner
The learner in second year has undergone a learner centered and process oriented learning experience up to first year. The learner at this age is in awakening stage and he is enthusiastic about environment. He needs recognition and encouragement from environment and also recognize as a grown up man. He is adequately competent to select vocational subjects according to his aptitude and interest and to acquire higher education and profession as he wishes. The aspirations about future life is framed in this particular age for seeming national and international job opportunities. Some of the peculiarities of learner at this stage are;

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Physical, intellectual and emotional changes are intensive during the age and their reflections can be observed Ability to enquire discover and establish cause effect relationship between phenomena

Readiness to undertake challenges Capacity to shoulder leadership roles Attempt to interpret oneself Susceptibility to different pressures Doubts, anxieties and eagerness about sex Imaging for social recognition Active participant in the learning process Act as a researcher Sharer of information Sharer of responsibilities Collect information Jakes leadership Involves in group work Act as a co-participant Observes his environment Experiments and realize Make interpretations and draw inferences Mould himself in to an active contributor for the welfare of the society

Needs of Learner
To make acquaintance with a job or self employment through vocational education To acquire more knowledge in the concerned area through higher education To recognize and encourage the peculiar personality of the later adolescent period

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To enable him to defend against the unfavorable circumstances without any help

Evaluation
In vocational higher secondary education, a new approach to education and evaluation should be made. Evaluation must be a systematic and continuous process. As the curriculum is based on vocational stream, capacity building is a most important part and it should be evaluated accordingly. The technical skills, interest in the particular field, communication skill, analysis organizing and presentation skills etc have to be evaluated. The personal and social qualities also have to be evaluated. Therefore, evaluation should be transparent, continuous and

comprehensive.

Monitoring system
Education is a kind of journey from darkness to light satisfying the needs and the wants of the individual and the society. The modernization of education through activity oriented system enhances free thinking and working in a fearless atmosphere. It is a qualitative process not a quantitative one this necessitates a proper monitoring system. The system of monitoring should have the following features. 1. It must be transparent 2. It must enrich the ideas of the facilitator through innovative process 3. It must be time bound and rational 4. It must motive the facilitator to adopt new strategies 5. It must be recordable and ensure effective feedback for the effective monitoring of the system, three levels of the mechanism should be setup. 1. School level monitoring group 2. Regional level monitoring group 3. State level monitoring group Moreover a social auditing system is advisable to attain the objective effectively.

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Supporting System
In learner centered vocational education, a learning methodology has to be organized and a proper learning atmosphere is to be provided. Many organizations can support the learning activity. They are:School Resource Group (SRG) Comprising all teachers (vocational and non vocational) instructors, and lab assistants with academic head as the group leader. School support Group (SSG) Comprising PTA president, members of local bodies, members of social clubs, subject experts etc who can contribute guidance /technology /infrastructure /financial assistance etc. Parent Teacher Association (PTA) Can give supports for raising adequate funds for field trips, production cum training centers (PCTC), exhibition, On Job training (OJT) etc. Local bodies Grama Panchayat, district panchayat and block panchayat can give support for providing infrastructure ie, class rooms, laboratory, library, seminar hall, audiovisual equipment etc. Subject club All vocational teachers handling same vocational subjects should form a subject club at regional level or district level. This will helps to share the knowledge and practical facilities, production and marketing of materials, service etc. 1. Based on the excellency, district wise nodal schools may be selected to provide facilities like central library, museums, video conferencing etc. 2. Institution Industry Interaction Project (III P) This should be implemented in every institution to update knowledge this also helps for OJT , PCTC and field visit.

Features of learning process in the new system of education In the new system of education the learning process should be modified in such a way as to enable the learner to construct the knowledge

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of his own through observation, co-operation, problem solving, social interaction etc. The learning process should consider the nature ability, social setup, inborn talents and subject selected by the learner. Therefore the learning process should be, A continuous mental process Simple - learner must feel that he is able to undertake the task Enable the learner to attain the curriculum objective Interesting Suitable to the age and attitude of the learner Future possibilities Enable group activity Challenging Time bound Constructive and curiosity developing Possibilities for evaluation Capacity to generate independent thinking Ability to enquire discovers and establish cause effect relationship between phenomena. Learning Aids To make the teaching and learning process simple and effective, certain learning aids and necessary use of such aids are transacting a complex idea makes the class room live and learners get more and more involved. The advancement of science and technology may be effectively utilized for this purpose. Some of the learning aids listed below. Multimedia Over Head Projector Computer Internet Liquid Crystal display Projector TV, VCD, DVD and tape recorders

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Working models Charts Slides Video Conferencing facility Library Text book Source book The new educational policy uplifts the social commitment of the learner.

Society Therefore the society can also give some valuable contributions in this changing situation. The new system also ensure s that the learner can perform certain useful services for the betterment of society. The social obligations can be illustrated as follows. To enrich social values, aptitude and ability in learner To develop entrepreneurial aptitude and ability which helps social welfare and self employment New system of education adopts OJT, PSTC etc as a part of vocational curriculum which helps to make close contact with the society. The resources available from our society can be positively utilized to convene seminars, interview etc. Social organizations can help learners to make their education socially committed. The social clubs like NSS, Tourism club, Eco club, energy club etc functioning in schools can make direct link with the society.

Subject Approach
Commerce is a down to earth practical discipline. Hence learning process should be organized around current business process. There is, therefore, a need to closely interact with business. A student of commerce must be able to relate himself to the changing business environment and to understand their implications through the interaction with peer sharing of

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experience and experimental learning. Learning through activities will definitely make learning of commerce effective. The commerce based vocational courses are one of the popular courses in the state. Accountancy and Auditing is one such subject taught under commerce based vocational courses.

Objectives of Accountancy and Auditing.

To develop and improve vocational competencies of the learners. To prepare the learners for self reliance and gainful self employment. To fulfill the national goal of development and removal of unemployment and poverty. To meet the needs for skilled man power for the growing organized and unorganized sectors of economic. To develop the conceptual skill, technical skill and application skill in the commerce related field. To train students in the use of information technology for business. To familiarize students with current business process and practices. To develop a capability in each student to identify business

opportunities, analyze their risk- return possibilities and support business development in socially desirable avenues with strong moral commitment. The theoretical foundation of learning stated earlier may be applied to make the learning of the subject effective.

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LEARNING STRATEGIES
In the modern era of globalization the introduction of new

technologies ensure only the survival of the fittest. So it becomes a necessity to equip the leanness to face the growing challenges in the competitive world. Hence the traditional approach to learning is no more relevant in the present context. The teacher should use instructional techniques that motivate the learner to construct his own knowledge. Now the learners are not passive listeners, but they are the active participants in the construction of knowledge. Here the teacher learner interaction should be given much importance. In the new instructional strategy while selecting the methods of teaching, the social and psychological aspects of the learner is to be taken into consideration. The given activities for learning are only suggested one. It can be altered according to the discretion of the teacher. To obtain the objectives, the new system of education is introduced in the Vocational Higher Secondary Education for attaining the objectives of the courses in this system, we can adopt the following strategies. 1. Assignment Assignment is some specific work assigned to the learners as a part of their academic enrichment. There are learning activities undertaken as a continuation of class room activities to realize the curriculum objectives to a broader extent. They should be completed in time bound manner. They help to lead learner to higher level of learning from the pre sent status. Challenging assignment can motivate the learners to involve in group dynamics and achieve fruitful results. The teachers may act as a guide. Assignment may be given on individually or on group basis. Assignment includes preparation of notes, preparation of charts, models, collection, of materials from institutions etc. Assignment develop skills of

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reference, observation, enquire reporting etc. It ensure the effective utilization of leisure time of the learners. 2. Seminar Seminar is a learning strategy involving an in-depth analysis of specific topic, preparation of a paper and presentation. The paper is presented by either one learner or a group of learners. After the presentation, there will be a discussion/ interaction in which all the learners can participate. The learners get an opportunity to clear their doubts and make clarification. Seminar helps to develop communication skill and overcome stage fright.

Stages
1. Selection of Topic The topic of seminar should be relevant to the subject of study 2. Assignment of topic to individuals learners or team The topic may be assigned to each learner or subtopics may be given to a group of learners 3. Collection of relevant information Information required for seminar can be collected from various sources namely books, magazines, internet, institutions, place and persons. 4. Preparation of draft paper Based on the information collected the learner may prepare a draft paper and submit it to the teachers for comments. Revise the draft pa per based on the comments of the teachers. The required draft is submitted for approval. 5. Program Scheduling The date, time and venue of the seminar is fixed. A seminar leader may be selected from the learners 6. Seminar paper presentation The learner/ learners shall present the paper in the seminar. The teacher may function as the moderator during the initial stages.

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7. Discussion / Interaction A number of respondents from the learners make comments on the topic. This will be followed by a general discussion. All the group members should actively participate in discussion. 8. Summing up deliberation The moderator sums up the deliberation 9. Evaluation / Feed back Both teachers and learners evaluate the programme. 10. Preparation of final report A final seminar report is prepared covering all the additional points discussed and consolidated.

3. Panel Discussion
It is a learning strategy in which a panel of experts are allowed to discuss a specific subjects under the control and direction of a moderator. Subjects can be divided according to the number of panel members. Number of panel members are fixed according to subdivision of points in the subject. Relevant materials and hand out may be given in advance to the learners. The monitor or moderator introduces the subject of discussion and invite a panel member to start the discussion. Each panel member is invited for discussion afterwards. After briefing by the panel members the question are raised from the audience and the panel members give suitable a nswer to them. A report should be submitted by each learner to the moderator.

4. Project
Project is a self-learning strategy which can exert great influence on the overall development of the learner. Project as learning strategy is to be selected where a problem arises in any part of the curriculum. The learners may be divided into groups and assigned different aspects of the problem. Each group works independently .Specific aspects of the problem such as data collection, classification, analysis, report preparation and presentation is to be undertaken by each of the members. Even though the work is divided among the members, it must be ensured that the execution of each and every activity is done with the active participation of all. After analyzing

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data collected from different sources, the learner arrives at a conclusion, which helps to solve the problem. There by learner learns the topic though his own activity. The other advantage of this learning activities is that it helps the learner to scientifically handle any problematic situation. It helps in the development of scientific thinking and thereby builds up the learners aptitude for the subject.

Stages of the project

1. Selection of a topic The project selected should be related to the curriculum and it should not be a project for projects sake. The topic or problem should arise from the curriculum. 2. Planning of the Project a. Hypothesizing: Hypothesizing means making assumptions based on the available primary information. b. Methods and Techniques : The methods and technique should be based on the aim and Hypothesizing of the project. The nature of the project, suitability of the tools, and the methods of learning should be related to each other. 3. Collection and Tabulation of Data The data may be primary, Secondary or teritiary. Either census or sambling method can be used based on the objective of the project. Suitable questionnaires are to be prepared for the collection of primary data.

The collected data is to be classified and tabulated so as to make it easily understandable. 4. Analysis of data and formulation of conclusion By analyzing the data, the reliability of the hypotheses can be examined. Preparation of graphs and diagrams and maps will positively help the analysis. The similarities relations and differences gathered from the analyzed information would tell whether the hypotheses should be accepted or rejected.

30

5. Preparation of Report The cover page should have the title of the project, the period of study, name (s) of investigator / group, and the address of the school. The report should be structured in the following order. 1. Title 2. Preface 3. Hypotheses and aim 4. Methodology 5. Sources of data 6. Analysis and conclusion 7. Suggestions (if any) 8. References 9. Appendices (Questionnaire, Observation schedule, check list Etc.) 6. Presentation of the Project When the project is presented, the learner is being evaluated and accepted. During presentation ideas are shared with others. The project method promotes scientific self learning and makes him capable of solving the problem arising in real life situations. 5. Debate Debate is a hot and interesting learning activity . A debate can be organized only on a topic on which there is difference of opinion. Therefore a topic suitable for debate has to be found. Debate can be on relevant topic that is different and interesting to the learners and relevant to society. Learners with different opinion have to be identified for discussion. Those who have similar opinion should join together to form a side. Those who hold the opposite view with form the other side. It would be good to write down the topic of the debate and displayed in advance. There should also a person to control debate. Learners should be given opportunity to absorb the ideas obtained from discussion and debate, develop the idea through reading and study, and to express them through writing or other means

31

Stages of Debate 1. Topic Selection 2. Selection of panels keeping in balance with intelligence, gender etc. 3. Selection of moderator 4. Collection of information guided by the teacher 5. Conducting the debate under the control of moderator by avoiding any sort of personal conflicts 6. Conclusion by the moderator expressing his final version or verdict. 6. Case Study A case may be a person, institution or a community case study is an in depth analysis of an actual event or situation. It presents real pictures of situation with facts, objective information or data learners analyse the case to interpret, predict and resolve issues associated with it. The case study provides the learner an opportunity to analyse and apply concepts, data and theory taught from the class. Learners can work individually or in groups. By studying realistic cases in the classroom, learners develop new insights into the solution of specific on the job problem and also acquire knowledge of the latest concepts and principles used in problem solving. Case may be presented by the teachers or may be provided in print form. A simple case study may have the following steps 1. collection of data 2. Conversion of data into information 3. Analysis of the case in groups 4. Presentation of the finding by each group leader. 5. Evaluation In addition to the above mentioned learning strategies there are many other learning strategies which can be used in appropriate situations to enrich learning process such as Problem solving, Role play, Brain storming, etc

32

7. Brain Storming This is the best method for solving creative problems. It facilitates generation of ideas quickly. Rules for conducting Brain storming. 1. No response is wrong - welcome every response. 2. Welcome as many responses as possible 3. No criticism is allowed 4. allow to work on others idea Steps in Brain storming 1. Presentation of the problem 2. Provide relevant information 3. Record the ideas put forth by the participants 4. Combine similar ideas 5. Evaluate each idea and solution 6. Selection of the best solut If brainstorming is used as an instruction strategy, the last step is not essential 8. Discussion Discussion is essential for the learner to share new finding, ideas and conclusion at each stage of learning with follow learners and teachers. In general discussion the teachers should guide the discussion though questioning and summarizing. The major steps involved are 1. Introduction initiated by the teacher 2. Development interactions 3. Transaction stage in which the key points are reviewed by the teacher and 4. Summarizing stage in which teacher provides additional support of discussion by giving lead points and follow up

materials to ensure the achievement of the objectives 9. Group Discussion Group discussion is an ideal method to develop Co-operation, democratic attitude, friendliness and compromising attitude which are the

33

ultimate aims of education. During group discussion the teacher may observe each group and it needed help them to channellise the discussion towards the common objectives. All learners may be given opportunity to take part and express their ideas within a time limit. The conclusion must reached may be entered by each learners. A group representative

present this during consolidation in which the teacher may correct or add informations to ensure that all the relevant ideas have been covered 10. Collection Collection is a continuous learning activity, which ensure complete participation of learners. The collected item may be materials, pictures, charts, ideas, data etc. Collection provides direct experience to learn. An exhibition of collected materials will help to strengthen the concept. 11. Practical works Experimentation contains the process skill in an integrated way. In the new approach of curriculum the learner forms idea and comes to conclusion though process. The term Practical when associated with a science subject usually means an experiment. The objective of doing an experiment is to explore new ideas through investigation only. Its main purpose is to verify some principles associated with theory. The relevance of practical in the traditional science subjects ends here. But this is not the case with Vocational Practical The ultimate goal of a Vocational Education is to generate skill through continuous practice along with investigation and invention. Continuous practice transforms the unskilled to the skilled. This is the significance and importance of practical in the Vocational stream. Hence it is very crucial that Vocational teachers as well as instructor should understand the importance of vocational practical and act accordingly. 12. Quiz Quiz programmes can be used as an interesting class room tool for transaction of curriculum objectives as well as to evaluate the effectiveness of transaction and achievement of learners.

34

For conducting a quiz programme a topic should be selected based on the above objective The learners are asked to prepare question based on the topic individually. The next day / next hour the learners are grouped into 3-4 groups randomly. A question is raised by a particular team and the other teams to answer them if they can answer the question they get points for that if all other teams fail to answer the question raised by the 1St the 1 st team answer the question and explain team if the background

necessary. All the teams get equal number of chance to ask the question . Time limit is also prescribed for the conduction of the programme. The team who scores maximum points wins All the participants can make notes on the questions asked answer and their explanation which help them in learning 13. Models Models are used in learning process. It enhanced the leaning experience. This is based on the seeing is believing. It helps the learner a chance to see feel the model presented . Still models and working models help the learners to understand the structure , working principles, actual operation etc. Several steps a re involved 1. Feeling the problem 2. The teacher should plan the type of model according to curricular objectives. 3. Grouping the learners 4. Briefing the tasks - Aim - Need - Material required - Source & Materials - Cost of materials - Division of Labour - Guidance - Fixing of a time limit 5. Presentation by each group about

35

a) How the models were prepared b) Details of - Expenses working and principles

Finally Documentation of the process

6. Evaluation - By the other groups Later a consolidation by teachers is to be done. 14. Games Class rooms can be made attractive by introducing different types of games. Games should be interesting as well as informative some of suitable games are 1. Odd man out 2. Cross word puzzles 3. Match the following 4. Aswamedham. 5. Link game Answer u sing clues. 15. Survey This strategy involves collection of data from the group under study (book, person, materials etc.) It develop the social interaction and communication ability of the learner. It also provide a scope for discovery learning. Step involved in survey - Objective of survey - Selection of area for survey/sampling frame - Selection of survey method Direct method With help of questionnaire/schedule

- Tabulation and analysis - Considation and Presentation

36

16. Exhibition It is a learning strategy by which the learner can get a chance to show the skill developed. It provides the intrinsic motivation and exposure. Exhibition item can be conducted either individually or as a group task. It can be conducted at school / Regional/State/National L evel. Necessary publicity and other arrangement can be provided. Presentation, documentation participation and innovative skills of the learner can be evaluated. 17. Interview Interview is one of the important learning strategies taking the help of a resource person. Interview is an inner view which provides opinion and information about a topic. An interview is conducted by the following steps 1. How to introduce a problem? 2. Invite a resource person 3. Decide the questions by learners 4. Decide the time, place etc. 5. How to discuss 6. How many learners to participate 7. Implementation of the interview 8. Conclusion (Facilitator)

Items required
1. Interview Schedule List of question prepared by learners Selection of learners, selected names sequence of question 18. Field Visit Field visit is an inevitable vocational tool to be implemented in vocational Higher Secondary Education. This helps the learners to familarise with the modern technologies and new situation in a different atmosphere. It provides learning though viewing. It is based on the principle that seeing is better than having. It enables the learning to retain the learned informations

37

longer and to make the subject more interesting. It motivates and give more confidence in his/her particular vocation. The facilitation should identify suitable center/ institution/site. Get prior permission from the authorities before conducting the field visit. Give instructions to the learners for collection datas/informations/ materials/ Specimens. Teacher may assign different duties to learners by working them different groups. Each learner should take utmost care and interest during the visit. He/She should observe and interact at the center/ institution where the field visit is conducted After the visit, learner should acquire the ability to apply the ideas/concepts in his future carrier. Each learner should submit a detailed repot about the field visit. 20. Demonstration Though demonstration we can present an item/product and emphasis its features very effectively Eg:- To u nderstand the functioning of a computer 1. Material/Item/Process 2. Demonstration 3. Venue 4. Additional requirements depending upon the nature of the item Demonstration Process 1. Introduction about the item/Material 2. Principles Working 3. Operation 4. Components 5. Merits of the item 20. Chart display It is also one of the important teaching aid. It can be used in every activities of a learning process.

38

Chart display is a written or pictorial representation of idea or concept. It is abbreviate brief and clear. It is prepared by study Benefits 1. A learner gets clear idea about the concept 2. The leaner can retain the ideas in his mind for longer periods 3. A complicated idea can be simplified though a chart 4. Cheap method of teaching aid.

39

CURRICULUM OBJECTIVES & SYLLABUS

Curriculum Objectives
To get the concept of bank reconciliation and its needs through reading materials, group discussion and present a note on it. To deepen the idea of cashbook and passbook, analyses the reasons for differences, comparison of cashbook and pass book and make a note on it. To develop skill in reconciling balances of cash book and pass book through problem solving, assignment etc . To develop an idea about cheque, pay-in-slip, bank pass book etc. through a visit to nearby banks, collect specimen of such documents and develop the skill in filling up of various forms and exhibit it in record . To develop the skill to identify and locate the errors and its types through seminar and prepare a note on it. To develop skills to rectify errors by passing rectification entry and preparation of suspense account through problem solving To get the concept of stores department, storekeeper, his duties, Bin card and store ledger, analyses the differences between Bin card and Stores ledger through discussion, demonstration and prepare notes and table of difference. To get the concept of Economic Order Quantity and different stock levels through reading materials and develop skill to compute EOQ & stock levels through problem solving and prepare notes and chart. To analyse different methods of pricing of material issue [FIFO, LIFO and Weighted Average pricing Method] and problems based on it through discussion and practical work and prepare notes.

40

To analyse the concept of material control, its needs and different techniques of material control through reading materials, group discussion and present notes To analyse the functions of personnel department, Employee History Card and Labour Turn Over through reading materials, discussion and prepare note. To get the concept of time recording time keeping, time booking, analyse the difference between time keeping and time booking, idle time, overtime, its reasons and treatment through reading materials, group discussion, field visit and prepare report. To analyse the diffe rent wage payment systems, its merits and demerits through discussion, debate and prepare debate report. To get an idea of different types of incentive wage plans and to develop the skill in computing total wages under Halsey and through problem solving, assignment etc To deepen the concept of overheads and its classification through reading materials, seminar and prepare a seminar report. To identify the steps in overhead accounting and get the concept of allocation and apportionment and analyse their differences through reading materials and discussion and prepare notes and a table of differences. To develop skill in allocation and apportionment (primary Rowan plan

distribution) through problem solving and project. To get the concept secondary distribution and its methods through reading materials, discussion and prepare note on it. To develop skill in reapportionment of overheads (secondary

distribution) through problem solving. To get the concept of absorption of overhead and its methods, develop skills in computing overhead absorption by Direct Labour Hour Rate and Machine Hour Rate through reading materials and problem solving and project.

41

To analyse the preparation before the commencement of audit, Audit planning, procedure of audit through general discussion, interview with an expert, project and present a report. To develop an idea of audit program, its advantages and disadvantages, audit working papers, Audit note book, Audit file through reading material, interview and develop the skill to prepare an audit program, Audit note book, Audit working paper through practical work and prepare notes. To develop an idea on audit report, unqualified report, qualified report, adverse report, disclaimer of opinion, contents of audit report through reading materials, group discussion and prepare notes. To develop skill in drafting a qualified report through demonstration, discussion and draft a report. To differentiate between audit report and audit certificate through reading material and prepare a chart. To acquire idea of the term person, Assessee, Assessment year, Previous year, Income, Gross Total Income, Total income of Income Tax Act of 1961, its chargeability through reading materials, discussion and prepare notes. To get an idea on Residential status. Income under various heads of income, list of incomes exempt from Income Tax through reading materials, interview with expert and prepare report. To analyse the procedure of computation, different types of assessment and returns through reading materials, discussion and prepare note. To collect application form for PAN and various forms for filing returns and develop skills to fill up the forms and exhibit as a record

42

Syllabus
Theory Bank Reconciliation Statement Need for Bank Reconciliation Statement - Reasons for difference in cashbook and pass bookpreparation of Bank Reconciliation Statement. Rectification of Errors - Clerical errors Errors of omission errors of commission Error of Principle Compensating errors Errors of Duplication Suspense account Journal entries for rectifying errors. Materials: purchasing of materials (details not expected) storage of material stores department replenishment of stock-maximum level, minimum level, Reorder level, Reorder Quantity, Economic Order Quantity [EOQ], danger level. Stores records- Bin card and Stores ledger, pricing of material issue- FIFO, LIFO, and Weighted Average Pricing method- Material control-ABC analysis -Perpetual Inventory Control Labour - Personnel Department. Employee History card - Labour Turn over. Time keeping- Purpose, method of time keeping, manual methods like attendance register and disc and mechanical methods like time recording clocks and dial time recorder. Time booking - daily time sheet , weekly time sheet, Job card or ticket, labour cost card. Idle time and idle time card, causes, Overtime. Calculation of wages. Systems of wage payment. Time wages, Piece wages- incentive wage plans - Halsey Premium and Rowan plan. Overheads : Meaning and definition, classification- function-wise, element wise, behaviour wise - Accounting for factory overheadscollection of factory overheads apportionment of factory overheadsReapportionment of service department overheads- non reciprocal and reciprocal basis-Repeated distribution. Absorption of overheads-

methods of absorption- Machine hour rate.

43

Conduct of audit preparation before commencement of audit Audit planning Audit program advantages and disadvantages Audit note book, Audit file audit working paper procedure of audit voucher types of vouchers vouching important points to be noted while vouching use of special ticks, routine checking test checking, deciding sample organization of audit staff.

Audit report meaning of Audit report distinction between report and certificate contents of the audit report kinds of report unqualified report qualified report adverse report and disclaimer.

Income Tax Act of 1961: (detailed study not expected) Definitions person - assessee assessment year previous year income gross total income and total income chargeability of income Taxation of previous years income during the same year.

Residence and Tax Liability : Residential Status of person ( Individual only) Scope of income tax liability List of income exempted from tax Income under various heads of income computation of tax (rate of tax only)

Procedure for Assessment : Voluntary return obligatory return return of loss belated return revised return compulsory return defective return prescribed forms used for filing return of income.

Types of Assessment: Self Assessment assessment on the basis of return regular assessment by Assessing Officer reassessment precautionary assessment.

Practical
Typewriting English - I Paper (Speed) 140 Hrs. Typewriting on one side of the paper an ordinary printed passage with or without heading and few figures if necessary and not exceeding three paragraphs consisting of 2250 strokes at the rate of 45 w.p.m. in double line spacing with 10 degrees margin on the left and 5 degrees on the right.

44

Note: 5 strokes will be counted as a word.

Each depression of a Two strokes are

character key or the space bar will be counted as a stroke. No stroke is counted for paragraphs or depression of shift key. counted after a full stop, interrogation mark, colon and exclamation mark. One stoke before and one stroke counted after and semicolon. One stroke before and one stroke after brackets. 2. Typewriting English - II Paper 140 Hrs.

This paper is intended to serve as a test of the candidate, knowledge of spelling, punctuation and common abbreviations and his ability to present in proper form the fair copies for signature. This consists of any 5 questions from the following: 1. Type and advanced statistical statements with vertical heading 2. Type private letters/ business letters/D.O letters/Official Letters/letters from autonomous bodies and professional letters know how to take carbon copies. 3. Type Government Orders /Proceedings/ Circulars/ Notices and

Notification. 4. Type Balance Sheet/Profit & Loss Account in two separate sheet of paper so as to match together. 5. Type Judgment /Agreement/display/Notice/Advertisement /Programme and Invitation with ornamental borders. 140 Hrs.

Computerised Accounting Overview of Computer system

Fundamentals of Computerised Accounting System Concept of Grouping of Account Classification of Accounts, Maintaining the hierarchy of ledger. Application of Computers in Financial Accounting Accounting procedures used in practice for recording cash, bank and journal transactions using appropriate vouchers. Preparation of ledger accounts, cash book, bank book, bank

reconciliation statement.

45

Trail Balance, Final Account, budget, Sales Tax calculations, Inventory control, Pricing and Movement of Inventory, Valuation of stock, Cost centre and Cost units.

Accounting Applications Using Electronic Spreadsheet Payroll Accounting Loan Repayment Schedule Depreciation.

46

PLANNING

In the context of the changing scenario in the field of education, the role of the teacher is not simply to te ach the syllabi. The emerging needs of education calls for facilitators role from teachers. The learning process should be learner centered and activity oriented. Learning activities must enable the learner to develop process domain and multiple intelligence skills to their maximum extent. No matter whether these skills are attained inside or outside the classroom, but the teacher must bear in mind, the fact that they are to the accomplished within a time frame. In order to achieve this end, the teacher may make necessary plans in terms of learning activities, the time required at various stages of learning, the time required for each unit, and also the desired outcome. The plan may be hierarchically structured as: a. Annual plan covering the entire activities for the year as a whole b. Unit plan which has to be prepared just before the start of a unit. Each chapter i s treated as a unit. c. Daily plan to provide learning activities for a days learning.

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ANNUAL PLAN
Class: II Year Accountancy and Auditing

Term

Month June

Unit number 1.1 1.2 2.1 2.2 2.3 3.1 3.2 4.1 4.2 4.3

Name of unit Bank reconciliation statement Rectification of errors Materials Labour Overheads Conduct of audit Audit report Income tax act, 1961 Residence and tax liability Assessment and Returns

Hours 10 15 25 20 20 15 05 10 10 10

Total hours

July July AUG September October November December

50

Ii

60

Iii

January February

30

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UNIT PLAN

SUBJECT: FINANCIAL ACCOUNTING

UNIT : BANK RECONCILIATION STATEMENT

Sl.No

Objectives
To get the concept of bank reconciliation and needs through reading materials group discussion and present a note on it.

Ideas/Concept
Bank Reconciliation statement, Need for preparing bank reconciliation statement

Activities
Group discussion,

Materials
Text book, Bank Publications, Journals, Specimens

Evaluation
Acquired concept. Prepared notes.

Hours

02

To deepen the idea of cash book and pass book , analyse the reasons of difference, compare the copy of cash book and pass book and make a note on it To develop skills in reconciling balances of cash book and pass book through problem solving

Cash book and pass book, Reasons for difference in cash book and pass book.

Case study, comparison, analysis

Collected specimens, text book

Acquired concept. Prepared notes.

03

Preparation of bank reconciliation statement.

Group discussion problem solving

Text book, bank statements

Solved problems 05

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DAILY PLAN
Class : II year Date:

Subject : Financial Accounting Unit : Bank Reconciliation statement Time : 1 Hour

Curriculum Objectives: To get the concept of reconciliation and needs through reading materials, general and group discussion and present a note. Activities Feed Back Strategy Used: Group discussion and general discussion Activity 1 A general discussion on cash book and Pass book, Active participation of learners. which studied in the previous classes should be Learners are got an idea on concept of cash book (with conducted. Help them to recollect it by asking bank column) and pass book questions. How will you record the banking transactions in the books of accounts? What is the proof of banking transactions provide by the bank? Activity 2 Learners are grouped into three or four. Each group are Groups were actively engaged. Sachu and Rakesh of given the copies of cash book and pass book.(Prepared group 2 asked why the transactions not appeared in hand outs) and ask them to observe and analyse. both records in the same day. Shyam of group 3 asked Is there any difference on closing balance of cash how we know the entry of bank charges in pass book. Consolidate the discussion on concept of reconciliation book and pass book? and reasons for differences. If yes, why it differs?

50

EVALUATION
Evaluation is a systematic process of collecting, analyzing, synthesizing and interpreting evidences of learners progress and achievements both in cognitive and non-cognitive areas of learning. Evaluation has to play significant role in making the learning process more effective. It provides diverse experiences to the learners, keeping in view the skill to be attained continuously by them. As the curriculum is based on a particular vocation in the selected stream is the most important part and it should be evaluated accordingly. Technical skills, interest and devotion in the field, communication skills, organizational and presentation skills are to be evaluated. Evaluation of the personal and social qualities also should be done. So the evaluation should be continuous and comprehensive.

Continuous and Comprehensive Evaluation (CCE)

Our traditional evaluation method measures only the memory and recollection capacity of the learner. To eliminate/ overcome the limitation the evaluation should be done on multi dimensional ways by measuring multiple intellectual capacities of the learner. So it is better to evaluate the learner in a continuous and comprehensive manner. CCE helps the learner to understand and develop adequate his own progress and to develop adequate strategies for further improvement.

Merits.
Assess the all round development of the learner on a continuous basis through a variety of activities. Effective feed back is possible Remedial diagnostic teaching is possible Process as well as products are assessed

51

Components of evaluation
In order to flourish continuous and comprehensive evaluation we make use of the following components of evaluation. I Continuous Evaluation (CE) In the activity based classroom teacher provides variety of experiences through varied tools. Brain storming sessions, group work, discussions, project, seminar, debate, field visits, practical works etc., will really flourish joyful learning. By considering the practicability and the nature of the subject, the following tools are advised for continuous evaluation. A series of learning activities are grouped into five major thrust areas as follows 1. Investigative activities Activities which create a spirit of enquiry, investigation and a mind for research in the learner belong to this group. for example; Study project Case study Field study

2. Interactive activities Activities which improve the communication skill, activities of sharing ideas, etc. For eg: Seminar Panel discussion Debate Group discussion

3. Assigned task Activities assigned to the learners to enrich/ strengthen the concept and ideas.

52

For eg: Assignment Collections Activities related to the achievements of the learner. For eg: Class test (oral/ written/ performance test) Quiz Interview Open book examination Group testin g

4. Performance task (Tests)

5. Practical based activities Preparation of working model Album Improvisation From the above five group of activities, the teacher has the freedom to choose any three areas for evaluation purpose. However, the teacher must make sure that the learners s hould undergo activities related to all the 5 areas during the course of the two years.

1. Study project
Sl.No 1. Stages Planning Criteria Relevance of the study Identification of problem Ability to select appropriate tools, ability to select suitable bearing method. Ability to collect sufficient and relevant data. Ability to classify and arrange data for analysis. Reliability and authenticity of the data collected. Ability to analyses the data Systematic arrangements. Ability to draw inferences based on analysis. Ability to Score 4/3/2/1 Total Scores

2.

Data Collection

4/3/2/1

3.

Analysis and Inference

4/3/2/1

53

4.

Report presentation

5.

Awareness of the content

give suggestions based on inference. Ability to present in logical and sequential order, authenticity of report, time bound completion. Knowledge of content and process. Ability to analyze data. Ability to justify inference. Ability to explain. Strategies and methods adopted.

4/3/2/1

4/3/2/1

Sl. No

Criteria

Score

2. 1. 2. 3. 4. 5. 3 1. 2. 3. 4. 5

Case study Identifying the problem Approach to the problem Time bound Action Analysis of the problem Problem solving / Reporting Field study Attitude and readiness towards the task Capacity for Observation Data collection Application of ideas Documentation / Recording Assignment Awareness of the content Comprehensiveness of the content Systematic and sequential arrangement Observation/suggestion/views/judgment/ evaluation Preparation of note and time bound completion of each stage of work Seminar Planning and Organization Collection and data / content Observation / appraisal and clarity Content knowledge Presentation Debate, Panel discussion Readiness to participate Depth of subject knowledge Communication skill

Total Scores

43/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1

4. 1. 2. 3. 4. 5.

4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1

5. 1. 2. 3. 4. 5. 6. 1. 2. 3.

4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1

54

4. 5. 7. 1. 2. 3. 4. 5. 8. 1. 2. 3. 4. 5. 9. 1. 2. 3. 4. 5. 10. 1. 2. 3. 4. 5. 11.

Ability to justify the stand Presentation Group Discussion Readiness to participate Depth of subject knowledge Communication skill Ability to justify in a democratic way Leadership quality Interview Planning Preparation of Questions Communication skill Participation Report preparation Collection Collection of materials/Documents Relevance and comprehensiveness Presentation Awareness of the content Time bound progress of work at each stage Quiz Preparation of questions Relevance of question Presentation Active participation Time management Classtest Class test should be oral/ written/ performance. It is to be evaluated on the basis of specific scoring indicators

4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2 /1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1

Terminal or Term End Evaluation (TE)

It is the written form of evaluation aimed at evaluating the facts, concepts and ideas gained by the learner. The test should not be aimed to evaluate the memory alone. Questions are framed in such a way that the learners are able to apply different mental process while answering. The Terminal Evaluation questions give more emphasis on application, analysis and synthesis level. The maximum scores for TE is 80 and the minimum is 24 (30%). The questions should be formulated taking into consideration the time required to read, think, understands and write answers. These aspects should be considered while fixing the scores also. To avoid blind guessing, multiple choice and application level questions may be mixed. The total number of

55

questions may vary from time to time. All the questions should be based on the curricular objectives. Open ended questions but the choice questions also should be based on the same curriculum objectives.

Practical Evaluation (PE)

The goal of vocational Education is to generate skills through continuous practices along with investigation and innovations. Continuous and comprehensive practice transforms the unskilled learner to a skilled one. This is the importance and significance of vocational practicals. PE is done to evaluate the practical skills achieved by the learner in the con cerned vocational subject Total Scores for PE is 150 and minimum is 60 score ie 40%. Practical Examination is conducted for a batch of 8 learners having 6 hours duration. Practical evaluation should be done taking into account the whole practicals included in the curriculum since Learning of practical skills is a continuous process through out the period of study. Distribution of scores of P.E Subject Typewriting English-I paper Typewriting English-II paper Computerize d Accounting Viva (Vocational Theory Based Practical) Total Typewriting English - I Paper (Speed) Maximum Score: 20 Score 20 30 50 50 150

SCHEME OF EXAMINATION

140 Hrs.

Typewriting on one side of the paper an ordinary printed passage with or without heading and few figures if necessary and not exceeding three paragraphs consisting of 2250 strokes at the rate of 45 w.p.m. in double line spacing with 10 degrees margin on the left and 5 degrees on the right. Note: 5 strokes will be counted as a word. Each depression of a character key or the space bar will be counted as a stroke. No stroke is counted for paragraphs or depression of shift key. Two strokes are counted after a full stop, interrogation mark, colon and exclamation mark. One stoke before and

56

one stroke counted after and semicolon. One stroke before and one stroke after brackets. 2. Typewriting English - II Paper 140 Hrs. Maximum Score: 30 Time : 2 Hours This paper is intended to serve as a test of the candidate, knowledge of spelling, punctuation and common abbreviations and his ability to present in proper form the fair copies for signature. This consists of any 5 questions from the following: 1. Type and advanced statistical statements with vertical heading (3 Score). 2. Type private letters/ business letters/D.O letters/Official Letters/letters from autonomous bodies and professional letters know how to take carbon copies. (8 Score) 3. Type Government Orders /Proceedings/Circulars/Notices and

Notification. (6 Score) 4. Type Balance Sheet/Profit & Loss Account in two separate sheet of paper so as to match together. (10 Score) 5. Type Judgment /Agreement/display/Notice/Advertisement /Programme and Invitation with ornamental borders. (3 Score)

Computerised Accounting
Max.Score : 50 Overview of Computer system

140 Hrs.

Fundamentals of Computerised Accounting System Concept of Grouping of Account Classification of Accounts, Maintaining the hierarchy of ledger. Application of Computers in Financial Accounting Accounting procedures used in practice for recording cash, bank and journal transactions using appropriate vouchers. Preparation of ledger accounts, cash book, bank book, bank

reconciliation statement. Trail Balance, Final Account, budget, Sales Tax calculations, Inventory control, Pricing and Movement of Inventory, Valuation of stock, Cost centre, Cost units .

57

Accounting Applications Using Electronic Spreadsheet Payroll Accounting Loan Repayment Schedule Depreciation. A learner of commerce based Vocational Courses has under go practical work on type writing and computersied accounting. There for practical

Practical Evaluation - 150 score

Evaluation is important for learning effectives indicators for P.E. varies according to the nature of the course bution of score of P.E The Maximum score fixed for P.E is 150. The minimum score to be obtained is fixed at 40% that is 60 score Type Writing English Paper 1 Type Writing English Paper II Computerized Accounting External Practical - Viva VOCE Total 20 Score 30 Score 50 Score 50 Score 150 Score

Indicators and scores for P.E

Typewriting English 1 Mistake are Spelling mistake , omission , over typing wrong spacing etc are treated as a stroke mistake Five stroke mistake are treated as a full mistake Full mistake 0 1 2 3 4 5 6 7 8 Score % 100 98 96 94 98 90 86 82 78 20 Score

58

9 10 11 12 13 14 15

74 70 64 58 52 46 40

(Mistake in stroke 5 x full mistake)

Typewriting English Paper II 30 score

Item Statement Evaluation points Neatness Proper aliment, Systematic arrangement, Punctuations Neatness, format, Quality of carbon copy, Contents Neatness, Alignment, Punctuations Neatness, Systematic Arrangement, alignment Neatness, border design Content Score 3

Private letters/Business letters / Official letters (With carbon copy) G.O/ Proceedings, circulars, Notices, Notifications Balance Sheet / Profit and loss account Display /advertisement/ Judgment etc Total Computersied accounting

8 6

10

3 30 Score

50 score

1. Preparation of final account 15 score 2. Bank reconciliation statement 10 score 3. Pay roll preparation 10 score 4. Sales tax / Budget 10 score 5. Inventory / Cost centre / cost unit 5 score Total 50 score External practical cum viva voce (50 score )

1 Practical 25 score
a) Procedure writing - 10 score (Write procedure for pay role / company creation accounts / creating a group of

59

b) Handling of equipments - 5 score (Replacing of ribbons, precautions to be followed in shifting Typewriting machine from one place to another) c) Assignment based on vocational subject - 10 score 2. Record 10 score Type written and computer print out of practical works 3. Viva Voce 15 score (Based on vocational subject) Practical examination is conduct for a batch of 8 learners on the time of examination is 6 Hrs. A learner must secure C grade for Typewriting, computerized accounting and external practical together

Vocational Competency Evaluation (VCE)

Vocational Competency Evaluation is to evaluate the vocational skill and aptitude developed by the learners during the learning process. This is a system to judiciously evaluate the required value addition and consequent capacity building in the concerned vocational curriculum. The vocational education is aimed at developing interest, skills and devotion in specific vocational fields. As other evaluation components like CE. PE and TE cannot assess the vocational competences and professional skills, acquired by the learners an internship evaluation (IE) components has been introduced to meet this requirement. Internship evaluation should be done based on the following components like regularity and punctuality, value addition and capacity building. 1. Regularity and punctuality Regularity and punctuality has vital role in vocational education learning continuous process, the regular presence of the Learner is must for attaining maximum efficiency. 2 Value Addition Value addition is the qualitative measure of the learners interest, devotion perseverance and efficiency. Value addition can be evaluated through conducting field visits/ vocational survey. The experiences gained through field visit / vocational survey increases the level of intrinsic

60

motivation and positive attitude towards the vocational field and thereby increase his value as a semiprofessional. 3. Capacity Building It gives a quantitative measure of the learners skill in graded area exposure. Capacity building can be eva luated through conducting the following activities. 1. OJT / Simulated experiment 2. Performance camp/exhibition/clinic 3. Performance PCT/Service cum Training center. These components help the learner to practice the acquired skills in the real situation and thereby increasing self-confidence and promoting self reliance.

Vocational Competency Evaluation Indicators

No 1. 2. 3. Items Regularity and punctuality Scores 10

Field visit / survey (anyone) vocational 20 project OJT/Simulated experiment performance Camp/exhibition/clinic Performance PSCTC (anyone)/Practical 20 skills TOTAL 50

1. Regularity and punctuality can be assessed by using attendance of the learner and time bound completion of tasks. It is evaluated by using 5 point grading system.

Rating Scale
Sl.No Items 1. Regularity 1 Never regular Never punctual 2 After regular Often punctual 3 Equally regular Usually Punctual 4 Most of the time regular Most of the time punctual 5 Always regular Always punctual

2.

Puntuality

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item Regularity and punctuality Value addition

Evaluation indicators Field visit Attitude and readiness towards the task Capacity for observation Data collection Application of ideas Documentation/recording Or Survey Planning Data collection Consolidation of data and analysis Drawing inference Reporting OJT/Simulated experiment Involvement/participation Skills in doing work/ communication skills Time bound action Capacity for observation, analysis and innovation Documentation, recording and display Or Performance in camp/exhibition/clinic Ability for planning and organizing Mastery of subject Ability for communication Innovation Involvement/social commitment Or Performance in production/service cum training center (PSCTC) Mastery of vocational skills Managerial capacity Promoting self confidence Innovation approach Promoting self reliance

Scores

Score 10

4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1

20

4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 20

Capacity Building

4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1

Grading
Continuous Evaluation is essential for activity based learning process. But the skills achieved by the students cannot be completely measured in terms of marking system. Marking system proved unscientific in evaluating

62

the growth and development of individual students both in cognitive and noncognitive areas. Classification of students in therms of marks were both unjust and indefensive. It also creates mental stress and strain among the students. To overcome this limitation, a popular mode of evaluating At the Vocational Higher Secondary

students performance known as grading system has been evolved. It is quite extensively used all over the world.

stage, it is desirable to use a 9 point scale absolute grading to c0-ordinate and record the evaluation. After giving the score, they are changed into percentaages and appropriate lettter grades are awarded corresponding to each percentage. This system is termed as absolute grading. The score percentage and corresponding letter grade is given below: Score in percentage Grade

90-100 80-89 70-79 60-69 50-59 40-49 30-39 20-29 Below 20

A+ A B+ B C+ C

D+ D E

63

UNIT

FINANCIAL ACCOUNTING

1.1 Bank Reconciliation Statement 1.2 Rectification of Errors

64

1.1 BANK RECONCILIATION STATEMENT

Introduction
Businesses through banks are popular and are accepted due to the bulk nature of cash transactions and less risk factor. Learners are aware of preparing Cashbook. While dealing with banking transaction, bank may issue a Passbook. The balance of cashbook and passbook may differ due to various reasons. Through this chapter an attempt is made to develop an idea of Bank Reconciliation Statement and to develop the skill in reconciling the

differences between cash book and passbook balance.

Curriculum Objectives.
To get the concept of bank reconciliation and its needs through reading materials, group discussion and present a note on it. To deepen the idea of cashbook and passbook, analyses the reasons for differences, comparison of cashbook and pass book and make notes on it. To develop skill in reconciling balances of cash book and pass book th rough problem solving, assignment etc

To develop an idea about cheque, pay -in-slip, bank pass book etc. through a visit to nearby banks, collect specimen of such documents and develop the skill in filling up of various forms and exhibit it in record.

Syllabus
Bank Reconciliation Statement - Need for Bank Reconciliation Statement Reasons for difference in cashbook and pass book-preparation of Bank Reconciliation Statement.

65

Through the Chapter................. (10 Hours)

Bank Reconciliation Statement
Suggested strategy: Group discussion, case study and problem solving Learners have acquired a general awareness about the meaning and need of Bank Reconciliation Statement. To learn more about the needs for reconciling the balance of cashbook and passbook and to know the reasons for differences, a case study of cash book and pass book may be conducted. The teacher may initiate a discussion based on the case.

Case
Lekshmi Traders Cash book (Bank column only) Dr. Date Particulars LF Amount Rs 2006 To balance b/d May 1 8 ,, cash 17 ,, cash v v 6,800 2006 May By Salary 9 [ChequeNo3334 15 Ramu [ChequeNo3335] v v Date Particulars LF Cr. Amount Rs

5,400

8,000 3,000 4,000 21,800

4,200 5,800 1,400 5,000 21,800

20 ,, Cash 30 31 ,, Rent [chequeNo3336] balance c/d

,, Hari 24 (cheque)

CANARA BANK

Pass Book
Name: Lekshmi Traders Account No: 22388081 Date Particulars Withdrawal(Dr) Deposit(Cr) Dr Cr Balance 6,800 v8,000 14,800

2006 Balance b/d May1 8 Cash

66

10 Salary [ChequeNo:3334] 20 Cash 17 Cash 29 31 Dividend collected Bank charges

v5,400 v5,800 v3,000 2,000 100

9,400 3,600 6,600 8,600 8,500

Lead Points Take the closing balance of cashbook or pass book as the starting point for reconciling. for eg. Cash book balance Rs.5000/ Analyse of the two books. Do the items ticked in both books need any reconciliation If not, take the rest items appearing in cash book alone, for example credit side of cash book shows a cheque payment of Rs. 4,200 to Ramu. What will happen in the balance of cash book?

Hint: Decrease Then which balance should also fall correspondingly Since Ramu has not cashed the cheque from bank, the balance of the bank did not decrease Then how can you reconcile to match the bank balance with the cashbook? Hint: Rs.4200 should be added with cash. Similar lead points may also be given citing examples appearing bank column only.

Activity:Cash book Balance Paid Ramu (Cr) Paid Rent Received from Hari Dividend Pass Book Cash balance if higher deduct otherwise add Cash book balance is down so add Cash book balance is down so add ? ? Cash book balance (Rs) 5000 (+) 4200 (+)1400 ? ?

67

collected Bank Charges ? Bank balance as shown

Likewise prepare per pass book.

8500

a table showing adjustments based on the balance as

The discussion may be consolidated by concluding that the balance of cash book and pass book may differ and that can be reconciled by preparing a statement known as Bank Reconciliation Statement. Expected outcome: Notes on meaning, need of Bank reconciliation statement and reasons for differences. Assignment 1. Visit to nearby bank, ask the learners to observe and collect copy of cheque, pay -in-slip, D/D application form, specimen of passbook and exhibit them in record. Assignment 2. Problems on reconciliation CE Possibilities: a. Assignment b. Class test

68

UNIT ANALYSIS
Objectives
To prepare Bank Reconciliation statement

Ideas/Concept
Bank Reconciliation statement, Need for bank reconciliation statement, Cash book, Pass book. Reasons for difference in cash book and pass book, Preparation of Bank reconciliation statement.

Activities
Group discussion, comparison, Analysis, Problem solving, Case study, Field visit

Materials
Text book, Bank Publications, Journals, Specimens

Evaluation
Acquired concept . Prepared notes. Solved problems. 10

Hours

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Terminal Evaluation Questions.

1. Sankar Das, a merchant has got his bank account with Bank of India. You are appointed as his accountant. On one day Sankardas happened to verify the cash book and his pass book and he found that the Cash book and Pass book differs in balance. He immediately summoned you to know why it happened? 2. As an accountant how will you explain? 3. Suppose you are selected as the accounts clerk of M/s Soundarya and your posting is on probation for 3 months. As a part of probationary training the Financial manager provides you a copy of their pass book and Cashbook

Cash Book (Bank column only) Dr

Date 2005 July 1 To Balance b/d 5 B/R Discounted 10 Babu 20 Chandran 24 Mathews 28 Cash 31 Smitha Total Particulars Amount Date 2005 2000 July 3 By David 2380 9 Rajan 80 360 800 120 600 6340 16 Textile corporation 21 Thomas 27 Cash 30 Sangeetha 31 Balance c/d Total 500 200 300 400 240 1100 3600 6340 Particulars Amount

Cr

70

Canara Bank Pass Book Name : M/s. Soundarya Herbs Account No.001210 Date 2005 Particulars Withdrawals Deposit Dr/Cr Balance

July 1

4 To David

Balance b/d

500 2380 80 200 300 240 120 2400 220 60 360 20

2000
1500 3880 3960 3760 3460 3220 3340 940 1160 1220 1580 1560

5 By Bills(Discount) 12 By Babu 13 To Rajan 17 To Textile Corporation 27 To Self 28 By Cash 29 To B/R (Dishonoured) 30 By G Ghosh 30 By Automobiles Ltd(Int) 31 To Chandran 31 To Bank Charges

Communicate the finance manager through a statement showing causes of disagreement.

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1.2 RECTIFICATION OF ERRORS

Introduction
Accounting assumed its importance as information and as a language of modern business. The language and information should be accurate and f ee r from errors. If any errors occur, it should be located and rectified. The learners are now familiar with preparation of Trial balance. The Trial balance is prepared to check the arithmetical accuracy of accounts. If it doesnt tally, it implies that there are arithmetical errors, which require detection and rectification. The

objective of this chapter is to develop awareness about meaning of errors, its classification, rectification and accounting procedure.

Curriculum Objectives
To develop skills to identify and locate the errors and its types through seminar and prepare notes on it. To develop skills to rectify errors by passing rectification entry and preparation of Suspense account through problem solving.

Syllabus
Rectification of Errors - Clerical errors Errors of omission errors of commission Error of Principle Compensating errors Errors of Duplication Suspense account Journal entries for rectifying errors.

Through the chapter.................. (15 hrs)

For convenience this chapte r is divided into4. Identification and location of errors 5. Rectification of errors and preparation of suspense account (5 hrs) (10 hrs)

1. Identification and location of errors........ (5hrs)

Suggested strategy: Seminar Based on the previous knowledge of learners, they may be grouped into two or three for a seminar. Each group may be assigned separate theory portions and may be given a few transactions with supporting journal entries along with

72

the instructions to find out errors if any. Also guide them to check whether the errors affect the agreement of Trial Balance or not. Ask each group to present their findings.

Seminar on identification and location of errors.

Planning Stage
Learners should be grouped into three and assign each group the topics errors and its classification, errors affecting the agreement of trial balance, Errors which do not affect the agreement of Trial balance. Select a group leader and entrust him the charge of presentation.

Data collection
Text Book Reference book Hand outs The group should interact with the teacher on the progress made by them. Make a draft report and show it to the teacher for further advice.

Presentation of report
While presenting the seminar The group leader will present the paper The learners can comment on the topic including opinion and suggestions. Team members can join with the leader for clarification Moderator will conclude the session by expressing his views Teacher consolidates the discussion and evaluates the seminar. The seminar may be concluded by consolidating on: Error of omission Error of commission Compensating error Error of principle One sided and two sided errors.

73

Activity: 1
Complete the table Transaction 1. Purchase of furniture was debited to purchase account. 2. Credit sales of goods is omitted to enter in the sales book 3. Cash paid to Thomas is entered on payment side of the cashbook but omitted to be posted to Thomas account in the ledger. 4. Rs.500/- received from Ramesh has been credited to his account as Rs. 50/5. The purchase book is under cast by Rs.200/- and the sales book is under cast by Rs. 200/? ? ? ? Types of Errors Error of principle

Expected Outcome Seminar report Chart on types of errors

2. Rectification of errors and preparation of Suspense account (10 Hrs)

Suggested strategy: Group discussion and problem solving. As a continuation of the seminar, a group discussion may be initiated on rectification of errors. Lead points Is it the right way to correct errors by mere erasing and over writing? Will it affect the authenticity of accounts? If yes, which way the errors will be corrected? The learners are asked to find out the impact of errors, then pass rectification entry. The above given transactions for seminar may be used for passing rectification entry.

74

Activity :1
The Trial balance of Mr. Anish extracted on March 31, 2006 was Rs. 561 short on the debit side. He opened a suspense account in which the difference was entered. A detailed checking of the books disclosed the following errors. 1. The Discount column on the debit side of the cash book posted to the Rent account Rs. 25 2. Rs. 250 paid to Sumesh posted to debit of Sureshs account. 3. Payment of rent Rs. 260 debited to Land Lords personal account. 4. Payment of Rs. 1000 to Rajesh posted to his credit as Rs. 100 5. Rs. 14 paid for repairs to furniture was entered in the total column of the cash book, but was not entered into the appropriate analysis column. 6. Purchase returns for Rs. 310 posted to the debit of purchase account. 7. A sale of Rs. 24.50 to Ajith was correctly entered in the sales book but was posted to the credit of Ajith as Rs. 42.50. 8. A cheque for Rs. 275 received from Soorya in settlement of her account had been returned dishonored and posted to the debit of general charges account. You are required to pass the necessary rectifying entries and prepare the suspense account. The discussion and class work may be consolidated as: One sided errors can be rectified through physical correction or an opposite entry in the same account. Errors rectified through passing rectification entry. Errors rectified with the help of suspense account. Notes on Rectification of errors, suspense account. Assignment Problems on rectification.

Expected out come

CE Possibilities
Assignment Class test.

75

UNIT ANALYSIS
Objectives of errors, types of errors and locating errors Ideas/Concept of errors- Errors of omission, errors of commission, compensating errors, errors of duplication and errors of principle. One sided errors and two sided errors. Location of errors. To develop skills to rectify errors by passing rectification entry and preparation of suspense account Physical correction, journal entries for rectifying errors, suspense account Problem solving, Group discussion Text book Prepared notes. Solved problems 10 Activities Seminar. Materials Text book, Reference books Evaluation Prepared notes. Seminar report Hours 05

To get the concept Meaning of errors, Types

76

Terminal Evaluation Questions

1. Complete the chart.

Errors . Error of principle ?

Error of omission

Error of duplication

2. On examination of the work of a bookkeeper, the accountant states that the following points are treated wrongly. Why the accountant says it as wrong? If it is wrong, which type it belongs to. a. Purchase of machinery for Rs.20, 000 is debited to the purchase account b. Rs.10,000 received from Mr.Soman is debited to Somans account c . Rs.5,000 received from Mr.Ramu posted twice to his account. d. A credit sale of Rs.500 to Sunitya not recorded in sales a/c. 3. Mr. Gopu is the Accounts clerk of Ameera Ice Creams. While preparing the trial balance he failed to tally the trial balance. But for preparing the final accounts due to urgency he posted the difference of Rs.1093 to suspense a/c. On further examination , he observed the following errors were the causes of disagreement in trial balance. a. The discount column on the debit side of the cash book posted to the rent a/c Rs.50 b. Rs.500 paid to Deepu posted to debit of Dilus a/c. c . Rent paid Rs.520 debited to landlords personal a/c. d. Payment of Rs.2000 to Ramesh posted to his credit as Rs.200. e . Purchase return for Rs.620 posted to the debit of purchases a/c. f. A sale of Rs.48.50 to Anu was correctly entered in the sales book but was posted to the credit of Anu as Rs.84.5 0. g . A cheque for Rs.550 received from Mahesh in full settlement of his a/c has been returned dishonoured and posted to the debit of general charges a/c. h. Help him to rectify these errors.

77

UNIT

COST ACCOUNTING

2.1 Material 2.2 Labour 2.3 Overheads

78

2.1 MATERIAL

Introduction
Materials constitute more than fifty percent of the cost of production of any product. For effective cost control, material should be controlled which helps in reducing cost of production and improving prof tability of organization. Efficient i system of purchasing, storing and using of materials at proper time and at right prices will keep the material cost at reasonable limit. Through this chapter, an attempt is made to get the concept of material, material control and to develop the skill of analysing the various aspect of material control.

Curriculum objectives
To get the concept of Stores department, storekeeper, his duties, Bin card and store ledger, analyses the difference between Bin card and stores le dger through discussion, demonstration and prepare notes and table of difference between Bin Card and Stores ledger. To get the concept of Economic Order Quantity and different stock levels through reading materials, group discussion and develop skill to compute EOQ and chart. To analyse different methods of pricing of material issue [FIFO, LIFO and Weighted Average pricing Method] and problems based on it through discussion and practical work and prepare notes. To analyse the concept of material control, its needs and different techniques of material control through reading materials, group discussion and present notes. stock levels through problem solving and prepare notes and

Syllabus
Materials: purchasing of materials (details not expected) storage of material stores department replenishment of stock-maximum level, minimum level, Reorder level, Reorder Quantity, Economic Order Quantity [EOQ], danger level. Stores records- Bin card and Stores ledger, pricing of material issueFIFO, LIFO, and Weighted Average Pricing method- Material control-ABC analysis -Perpetual Inventory Control.

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Through the chapter............. (25 hrs)

For convenience this chapter is divided into 1. Storage of materials and stores records......... 2. EOQ and stock levels........................ 3. Pricing of material issues. 4. Material control............... (3hrs) (7hrs) (12 hrs) (3 hrs)

1. Storage of Materials and stores records................. (3 hrs)

Suggested strategy: Group discussion and Demonstration Based on the previous knowledge on materials and stores a discussion maybe initiated by giving an example on real life situation of arranging provisions in our house. Lead points Where will you arrange the provisions at your house? Is there any separate room or area for it? Who will store them safely at home? Does your mother keep these articles unsystematically? Suppose rice or sugar wont be sufficient for tomorrow morning, when she will ask you to buy the same? The discussion may be consolidated by relating such examples to that of a factory store and the learners get an idea that Materials are kept in store Persons who are in charge of the stores are called store keeper The duties of store keeper Records maintained in store-Bin card Stores ledger

Distribute specimen form of Bin card, stores ledger and ask them to analyse and differentiate.

80

Expected out come Note on Stores department, Duties of Storekeeper, Chart showing difference between Bin card and stores ledger.

2. EOQ and stock levels (7 hrs)

A . EOQ
Suggested strategy: Group discussion and problem solving Hero cycle manufacturing company needs 8000 kilograms of steel during the year 2005. The rate per kilo is Rs. 25/-. The company can purchase the materials either by giving a single order or a number of orders. Each order costs Rs. 100/- . The storing expenses will be 10% of inventory value per annum. Lead points Activity : 1 If the company decides to purchase 8000 Kg steel in one order? What will be the ordering and storing expense? If the company purchases the required quantity in 10 orders, What will be the change in ordering and storing expense?

Hint No. of orders (a) 2 5 8 10 16

8000/ a Qty. to be ordered (b) 4,000 1,600 1,000 800 500

B/2 Average stock (c) 2,000 800 ? ? 250

c x 2.50 Cost of carrying average stock (d) 5,000 2,000 ? ? 625

a x 100 Ordering cost (e) 200 500 ? ? ?

d+c Total cost (f) 5,200 2,500 2,050 2,000 2,225

From the above activity, at which number of orders the cost is minimum? The teacher consolidates that instead of developing such a table it may be done with the help of simple formula.
2AO C

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B Stock levels
Suggested strategy: Group discussion. (i) Re-order level The teacher initiates the discussion by giving a few thought on life related situation of ordering provisions at home. When do you purchase provisions at your home? Is it after the completion of the entire stock? Similarly in a factory when will they give order for purchase of material? Suppose a factory consumes a minimum of 60 units of materials and its maximum consumption is 100 units. But if they give order for purchase there will be a delay of 6 to 8 days. In such a case, when an order for materials may be placed. Hint: Maximum consumption is 100 units Waiting time ( Maximum re -order period) 8 days How many units to be purchased? Can you develop a formula for the re-ordering level? (ii) Minimum level Citing the above example teacher asks: What is Re -order level? What is the normal consumption per day?

60 + 100 = 80 units 2 What is the normal Re-order Period? 6+8 Hint = 7 days . 2
Hint: Normal consumption =
Then what is the normal consumption for the normal days? 80 x 7 = 560 units Activity Re-order level? Average consumption 560 units Minimum level? Hint. Minimum level must be below the re-order level. Minimum Level = Re -order level [Normal Consumption x Normal reorder period

82

iii) Maximum Level

Lead points From the word maximum level can you say whether it should above the minimum or not? If a re -order quantity fixed by the company say 150 units will you add or deduct the same with Re-order level. What is minimum consumption for minimum re-order period. Hint: 60 units x 6 days = 360 units. Can you develop a formula for the maximum level and work out the above problem. Hint: Maximum Level = Reorder level +Reorder Quality - [Minimum consumption x Minimum re-order period] The teacher consolidates at each stage of computation from Re-order level to Maximum level. Activity: 1 X, a refrigerator manufacturer, purchased 3200 units of a certain component from P. His annual usage is also 3200 units. The order placing cost is Rs. 200 and the cost of carrying one unit for a year is Rs. 8. Calculate Economic ordering quantity. Activity: 2 P Ltd used 2 types of Materials A and B for production of X, the final product. The relevant weekly data for the components are given below: Normal usage Minimum usage Maximum usage Re order quantity : : : : 50 units per week each 25 units per week each. 75 units per week each. A-300 units B 500 units Re order period : A: 4 to 6 weeks B: 2 to 4 weeks.

Calculate for each component:

a. Re order level b. Minimum level c. Maximum level

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d. Average stock level. The discussion and practical work may be concluded and consolidated on EOQ Stock levels Concept of danger level.

Expected outcome Notes on EOQ, stock levels, Solved problems. Chart on computation formula

3. Pricing of material.. (12 hrs)

Suggested strategy: Group discussion and problem solving. Learners are now familiarized with stock levels. A handout may be given to the learners regarding different pricing methods and its subdivisions. After internalizing , a discussion may be arranged. Lead points Whether the price of material purchased will be constant always. If not, how will you price the material issue when the materials are purchased at different prices. Is it possible to issue materials to production department at a uniform price? Is there any need for pricing the materials at the time of issue to production departments?

Case
A storekeeper of Sundar Raj Mills gives you the following particulars of materials. Ist lot purchased on 1 -4-2006 contains 1000 kg.s @Rs. 10/- each 2nd lot purchased on 5-4-06 500 kg.s @Rs. 12/- each 3rd lot purchased on 8 -4-06 c ontains 700 kgs @Rs. 15/- each If the company desires to issue 1600 kilograms to production department, how can they make issue in terms of quantity and prices under the following cases? If Issues are made in the order in which lots are receive d first.

Lead points

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If Issues are made from last came first and so on? The discussion and class work may be consolidated on

Pricing methods FIFO LIFO WAP AB Ltd has purchased and issued the materials in the following order. 1-1-2000 6-1-2000 8-1-2000 10-1-2000 15-1-2000 20-1-2000 25-1-2000 31-1-2000 Purchases 600 units@ Rs. 3 per unit Issued 500 units Purchases 600 units @ Rs. 4 per unit Purchase 700 units @ Rs. 4 per unit Issued 800 units. Purchase 300 units @ Rs. 5 per unit. Issued 100 units. Purchase 200 units @ Rs. 5 per unit.

Activity 1

From the above details prepare stores ledger account under FIFO and LIFO Method. Activity 2 From the following details, prepare a stores ledger using Weighted Average Price method. 2006 June -1 5 7 9 19 25 27 30 Opening balance 50 units @ Rs. 3 per unit. Issued 20 units Purchased 50 units @ Rs. 4 per unit. Issued 25 units Purchased 70 units @ Rs. 3 per unit Purchased 30 units Issued 20 units Purchased 40 units @ Rs. 4 per unit.

The class work may be concluded by solving problems on FIFO, LIFO and WAP. Expected out come Notes on Different pricing methods, solved problems.

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4. Material control

......... (3hrs)

Suggested strategy: General discussion The learners are now familiarised with material and storage. Discussion may be initiated by giving importance on the need of control exercised in material at the time of purchase, storing and its issue. Lead points Is it necessary to control materials? If yes in what all areas control has to be exercised? Through which way we can control effectively. Is it possible to exercise control in material through maintaining records only? Is there any chance of difference in recorded quantity and actual quantity? If yes, through which way will you find out the differences? Is fixation of stock levels helpful in material control? If yes, how? Is it helpful in deciding EOQ? If yes how? Is it necessary to pay attention on value aspect while controlling? If yes, what are the possible ways? The discussion may be concluded and consolidated on: Material control exercised through efficient purchasing, storing and issuing procedures. Setting of various stock levels. Fixation of EOQ. Material loss, types and treatment. Perpetual Inventory System. ABC analysis Notes on Material control and Techniques of material control. Assignment :1. Ask the learners to make a chart on ABC analysis. 2. Collect specimen forms used in store and cost office and make a record.

Expected out come

86

3. 4.

Problems on EOQ and stock levels. Ask the learners to prepare chart on advantages and disadvantages of FIFO and LIFO

5. CE possibilities Assignment Class test.

Problems on FIFO, LIFO and WAP

87

UNIT ANALYSIS
Objectives
To get the concept of store keeper and his duties and stores records. To get the concept of Economic Order Quantity, Stock levels and calculation of E.O.Q and different stock levels To get the concept of pricing of material issues and problem solving

Ideas/Concept
Store keeper and his duties, Bin, Bin Card , Stores ledger, Difference between Bin Card and Stores ledger

Activities
Group discussion, Demonstration

Materials
Text book, Specimen

Evaluation
Acquired concept. Prepared notes. 03

Hours

E.O.Q, Calculation of EOQ, Stock levelsMinimum Level, Group discussion, Maximum Level, Re-order problem solving Level, Average Stock level, Danger Level, Calculation of various stock levels. Material pricing- First In First Out, Last In First Out, Weighted average pricing method. Problems based on FIFO, LIFO and weighted average method Material control, ABC analysis, Perpetual inventory system.

Text book, Specimen

Acquired concept. Prepared notes .Solved problems

07

Group discussion, problem solving.

Text books, Hand outs.

Prepared notes .Solved problems

12

To get the concept of material control

General discussion

Text book

Prepared notes

03

88

Terminal Evaluation Questions

1. X Ltd., provides you the following details of their purchase Annual requirement Ordering cost Cost per unit 6000 unit Rs.15 per order. Rs.20

The cost of carrying and storing materials is calculated as 20% of the cost of materials. In this circumstances: a. How will you order materials most economically? b. Calculate the economic order quantity. c. If the carrying cost increased by 5%, what will be the economic order quantity? 2. Zigma Group finds it difficult to maintain their stores department effectively due to lack of able person. On search of such person, you are selected as the storekeeper. To keep the investment in materials at its minimum and to eliminate the trend of

overstocking and under stocking what suggestions will you put forth before the management. 3. ABC Ltd engaged in production of a certain type of material. They purchased an item of material on the following lots. Date 01-01-06 02-01-06 03-01-06 04-01-06 05-01-06 06-01-06 Particulars Received Issued Received Issued Received Issued Units 100 60 50 50 60 50 24 22 Amount (Rs) 20

Mr.Ram Gopal is the newly appointed storekeeper. Help him to issue the materials at a suitable pricing method

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2.2 LABOUR
Introduction
Labour accounting assumes importance, as it is the second major item of cost of production. Like material, cost of labour also should be controlled for reducing cost of production and improving the effectiveness. For this a healthy atmosphere should be provided for the labours and offer them a reasonable remuneration. Effective utilization of time deserves importance. This chapter deals with time recording, wage payment and various incentive plans.

Curriculum objectives
To analyse the functions of personnel department, Employee history card and Labour Turn over through reading materials, discussion and prepare note. To get the concept of time recording time keeping, time booking , analyse the difference between time keeping and time booking, idle time, overtime, its reasons and treatment through reading materials, group discussion, field visit and prepare report. To analyse the different wage payment systems, its merits and demerits through discussion debate and prepare debate report. To get an idea of different types of incentive wage plans and to develop the skill in computing total wages under Halsey and through problem solving, assignment etc. Rowan plan

Syllabus
Labour - Personnel Department. Employee History card - Labour Turn over. Time keeping- Purpose, method of time keeping, manual methods like attendance register and disc and mechanical methods like time recording clocks and dial time recorder. Time booking - daily time sheet

90

, weekly time sheet, Job card or ticket, labour cost card. Idle time and idle time card, causes, Overtime. Calculation of wages. Systems of wage payment. Time wages, Piece wages- incentive wage plans like Halsey Premium and Rowan plan.

Through the chapter ...............20 Hours.

For convenience this chapter is subdivided into a. Personnel Department and its functions b. Time recording and its needs c. Wage payment system d. Incentive wage plans (2 Hrs ) (6 Hrs ) (5 Hrs) (7 Hrs )

A. Personnel Department and its functions (2 Hrs )

Suggested Strategy : General discussion. Based on the previous knowledge of purchase department and its functions, initiate a similar discussion on Personnel Department and its functions. Lead points Is there any need for human resources in an organization? Is there any separate department to manage human resources? If yes, who is in charge of that department?. Which are the main areas of work of that department? Is it necessary to maintain records in the department Is every person permanently works in the organisation If not, why such change occurs? Is it good for a company to have frequent change in labour force. . The discussion may be consolidated on following points: Personal department is the department to manage human resources It is headed by personal manager. Selection, re cruitment, placement and training are the main areas.

91

Retirement and fresh appointment are the main causes for Labour Turnover.

Expected outcome Notes on personnel Department; its functions , Labour turnover , causes of Labour turnover.

B. Time recording and its needs .... ( 6 Hrs )

Suggested Strategy : General discussion and field visit Let the learners get an idea on the importance of time recording through citing the examples of marking attendance and late arrivals in classes, class schedules etc. Questions can be asked and list the responses to get a clear idea. Ask them how the workers marking attendance in their work place. Lead points Is it necessary to record time. If yes for what purpose. Is there any method to record time. Is there any records maintained for recording time. Whether the worker utilize his working time effectively? Is it possible to find out the actual time worked by a worker from this record. If not, how is it possible and through what records. What are the causes of time lost during production and transit. How will you find out and record the time lost during production and transit. Is there any normal hours fixed for working per day . Is there any circumstances for which a worker has work to for more than the normal working hours.? If yes what are they ? How do you pay for the extra time and how it is accounted? .

92

Consolidate the discussion on the needs of time recording, methods, idle time, over time, its records, accounting treatment etc. To enrich the idea obtained from group discussion, arrange a field visit to a near by factory where the management of time is properly done. Ask the learners to collect and record specimen form of time records. Expected out come Notes on time recording Record of specimens collected.

C. Wage Payment System(5 Hrs)

Suggested Strategy: Group discussion and Debate. Learners have a general idea of remuneration for workers. To enrich this idea initiate a discussion based on the following case study.

Case.
Ram and Shyam are data entry operators associated with National Infos. Systems. Payment given to Ram is @ Rs. 20 per hour and to Shyam @ Rs.5 per A4 sheet paper typed. Last week Ram worked for 48 hours and Shyam typed 250 A4 size papers. Lead Points How much amount Ram earned in the last week? Hint : Time worked Rate per hour Total Wages How much Shyam earned Hint : Number of A4 sheet typed - 250.. - ? 48 Hrs. ?

Continue the discussion

Usually Ram is supposed to work for 8 hours per day for 6 days. For this the wage rate fixed is Rs. 20/- per hour. The agreement with the workers is that if they worked more than the normal working hours they will be paid at double rate for extra time worked.

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Lead Points If Ram worked for 54 hours, what would be his remuneration? How will you arrived on it? Ram worked for 54 hours Normal working hours - 48 hours Extratime worked ? Wages for total working hours ? Amount paid for extra time more than the normal rate ?

Activity

So Total Earnings

= Normal wages for Total working hours + Amount paid for extra time over and above the normal hours

Consolidate the discussion on Time rate, Piece rate, Overtime and idle time.

Continue the discussion

Lead points: Is paying wages alone will bring the worker efficient If not what are the methods to increase workers efficiency At the end of discussion learners are familiarized with the concept of cash and non cash incentives. Based on the discussion form a panel for debate. Arrange the learners into two groups and conduct a debate on wage payment system

Debate
Topic
Different Wage Payment Systems. Time rate and Piece rate Merits and Demerits

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Selection of panel :
At least two panels of learners may be selected to argue for and against each wage payment system.

Selection of Moderator
One of the learners may be selected as moderator.

Collection of information
Needed information may be collected from books, periodicals , Magazines etc.

Conducting Debate
The Teacher act as an overall guide and Moderator debate. The debate may be concluded by the moderator. make observation and comments along with suggestion. should present a report Expected outcome: Debate Report, The teacher can Each learner will facilitate the

D. Incentive Wage plan........... (7Hours)

Suggested strategy: Discussion, problem solving. Learners have already familiarised with incentives and its classification. To know more on types of incentive plans and the calculation of total earnings imitate a group discussion based on case study. Case Abey and Neha are working in Devan Public Ltd. The company pays wage on the following system. a. The company fixes the time required for production in advance.. b. The company pays wages for the actual time worked at hourly rate c. If the workers finishes his work before the time fixed, the company agrees to pay bonus at 50 % of the wages for the time saved.

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Hint: Time saved= Standard time- Actual time. Activity: The time fixed by the company for a particular work is 10 hours. Hourly rate - Rs. 10 per hour Actual time taken: Abey 12 hours. Neha 8 hours. Compute the earnings of Abey and Neha. Earnings of Abey Time fixed-10 hours Time taken-12 hours Time saved ? Bonus ? Wages of Abey = ? Earnings of Neha Time fixed -10 hours Time taken-8 hours Time save d ? Bonus ? Hint: Bonus is 50 % of time saved. Wages 8 x ?

Total earnings= Wages + Bonus. Lead points Is it possible to increase productivity by offering mere wages. If not is there any ways to motivate the workers to increase productivity. What a re they? Will it possible to link productivity and cash incentive Is it possible to increase efficiency by offering any incentive other than cash incentive? Is the incentive wage payment system helps the firm to control Labour Turn Over

96

Is there any wage payment plan which combines normal wages and cash incentives? If yes, what are they and how will you compute it. Conclude the discussion by consolidating on incentives plan,

importance and types of incentive and incentive plans. Based on the discussion point help the learners to complete the activities Activity: 1 For a certain work order the standard time is 20 hours. The actual time taken is 13 hours wages under Halsey Plan. Activity: 2 The standard time allowed for doing a particular work is 10 hours. The work is completed in 8 hours. The wage rate per hour is Rs. 20. Calculate the earnings under Rowan plan. Expected outcome Notes on incentive plan, its merits and demerits , Solved problems., Chart showing formulae of calculating wages under Halsey and Rowan plan. Assignment: 1. Ask the learners to collect specimen form of Employee History Card, Labour requisition card, Form of payroll and pay slip and present it in recor 2. Ask the learners to prepare a table of differences between time keeping and time booking method. 3. Problems on Time Rate, Piece Rate, Overtime 4. Problems on Halsey and Rowan plan. CE Possibilities Assignment Debate Class test per hour Rs. 25. Calculate the earnings

97

UNIT ANALYSIS
Objectives To get the concept of personnel department, functions of personnel department. Labour turn over. To get the concept of time recording various method of time recording, Idle time, Idle time Card, Overtime Ideas/Concepts Personnel department, Functions of personnel department, Employee history card. Labour Turnover, Causes of LTO Activities General discussion Materials Text book Evaluation Prepared notes. Record Hours 02

To get the concept of systems of wages payment and calculation under time rate system and Piece rate system. To get the concept of

Time Recording, Various methods of time recording, time keeping and time book methods, Difference between time keeping and time booking. Idle time meaning classification and treatment. Overtime meaning, Reasons and treatment. Meaning of wages, Time rate system, Merits and Demerits, Piece Rate system, Merits and demerits, Difference between Time rate system and piece rate system. Simple problems based on time rate system and piece rate system. Incentive wage plans. Halsey Premium Plan and

General discussion, Field visit.

Text book, Collection from nearby industrial units

Prepared notes

06

Group discussion, Debate

Text book, Reference Book.

Prepared notes, Debate report

05

Group discussion , Problem solving

Text Book

Prepared Notes Solved

07

98

Incentive wage plans and calculation of wages under Halsey and Rowan plan

Rowan Plan- Problems based on Halsey and Rowan Plans

Problems.

99

Terminal Evaluation Questions.

1. Stitchwell tailors have 2 permanent tailors Arun and Bose. They are paid @ Rs.160/- for 8 hours per day. During the school re -opening season, the owner finds it difficult to fulfill the orders with in time by working through the normal hours. So the tailors are asked to work more than the normal hours of work to finish the work on a condition that they will be paid at double the rate for the excess time worked. During the week they worked for:

Working Days
Monday Tuesday Wednesday Thursday Friday Saturday Total

Hours Worked
Arun 10 12 12 12 12 10 68 Hrs. Bose 10 10 12 10 11 8 61 Hrs

Arun and Bose wants to know their total earnings and the amount they earned for the overtime worked. Help them. 2. Raj Group is a leading manufacturing firm having 50 employees. They are paid at a handsome rate when compared to similar industries. Even though the employees are satisfied by the remuneration they are paid for but some sort of unhappiness is amongst all of them. This affected the productivity of the concern seriously. The management wants to motivate the workers to increase productivity. You are appointed as the Human Resource expert and are asked to find out the reasons and rectify it. What suggestions do you have to pose before the management?

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2.3OVERHEADS
Introduction
Learners have a general idea on the concept of overhead. To enrich this concept in this chapter steps in overhead accounting is also included. Every aspect of this chapter must be transacted with examples from real life situations to create interest in subject and to develop professionalism. The objective of this chapter is to develop the skill of analyzing and accounting of overhead through various methods.

Curriculum Objectives
To deepen the concept of overheads and its classification through reading materials, seminar and prepare a seminar report. To identify the steps in overhead accounting and get the concept of allocation and apportionment and analyse their differences through reading materials and discussion and prepare notes and a table of differences. To develop skill in allocation and apportionment (primary distribution) through problem solving and project. To get the concept secondary distribution and its methods through reading materials, discussion and prepare note on it. To develop skill in reapportionment of overheads (secondary distribution) through problem solving, assignment etc . To get the concept of absorption of overhead and its methods, develop skills in computing overhead absorption by Direct Labour Hour Rate and Machine Hour Rate through reading materials and problem solving and project.

Syllabus:
Overheads : Meaning and definition, classification- function-wise, element wise, behaviour wise - Accounting for factory overheads- collection of factory overheads apportionment of factory overheads-Reapportionment of service

101

department

overheads-

non

reciprocal

and

reciprocal

basis-Repeated

distribution. Absorption of overheads- methods of absorption- Machine hour rate.

Through the chapter ..........................(20 Hrs)

This chapter is subdivided into a. Overhead classification b. Primary distribution c. Secondary distribution d. Absorption of Overheads (4 hrs) (5 hrs) (5 hrs) (6 hrs)

A. Overhead classification...(4 Hours)

Suggested strategy : Discussion and Seminar Based on the previous knowledge of the learner, a general discussion may be initiated on overheads and functional classification of overhead. For acquiring the idea of other bases of classification of Overheads, the learners are grouped into two or three for seminar. See unit Learning strategies for conduct of seminar. Each group may be assigned a specific topic. Instruct each group to present their findings and the seminar may be concluded on the following points. Classification of Overheads Function wise Element wise Behaviour wise Controllability

Expected outcome: Seminar report

B. Primary Distribution ..........................................5 Hrs Suggested strategy: Discussion, Problem solving and project
Learners have already familiarized with the term Overhead and its classification. To know more on allocation and apportionment and the calculation of total overheads of departments, a discussion may be initiated based on a case study.

102

Case:
In an organisation there is a general manager, who is in charge of the all departments for which he is getting Rs.10,000/- as salary. Stores manager is in charge of the Stores Department and is getting Rs.5,000/-. General Manager is in charge of administration of all departments where the Stores Manager is in charge of administrating stores department only. The organisation consists of 3 production department P1, P2 and P3 and 2 service department, S1 and S2. On verification of the time spent by the General Manager, it was noted that he devoted his time through Department as follows. P1-50 Hours S1-10 Hours Lead Points Is it possible to charge the cost of service rendered by the General Manager to Stores Department alone? If not on what basis will you charge services. Give reasons? Is it possible to charge the cost of service department of Stores Manager to stores manager to Stores department alone.? Discuss About the Basis Apportionment Activity 1 Complete The Chart P2-75 Hours S2 15 Hour P3-50 Hours

Item of Overhead Rent Supervision Power Lighting Depreciation

Activity 2

Basis of Apportionment Floor Area Number of workers ? ? ?

A manufacturing concern is divided into four departments.

A,B and C -

Production departments and X is Service Department. The actual expenses for a period were as follows: Rent Depreciation on Plant (Rs) 10,000 4,500

103

Supervisory Expenses Power Repairs to plant Lighting Expenses Fire Insurance on Stocks Employers Liability for Employees Insurance

15,000 9,000 6,000 1,000 5,000

1,500

The following information is available in respect of the four departments.

Particulars Area in Sq.M Light Points Number of Employees Total Wages Value of Plant Value of Stock

Dept. A 1500 15 200 60,000 2,40,000 1,50,000

Dept.B 1100 11 150 40,000 1,80,000 90,000

Dept.C 900 9 100 30,000 1,20,000 60,000

Dept.X 500 5 50 20,000 60,000 -

Find out the actual overhead cost of the four Departments The discussion and class work may be consolidated on Steps in Overhead Accounting. Allocation and Apportionment. Basis of Apportionment. Primary Distribution. Notes of Overhead accounting Problems on primary distribution.

Expected outcome

104

C. Secondary distribution...

(5 Hours)

Suggested strategy: Group discussion, problem solving and project.. Now the learners have an idea of primary distribution. A discussion may be initiated on the necessity of charging Service Department overhead to Production Department. Lead points Is the service department engaged in production If not, what is the role of service department in production ? How the Overheads of service department. are accounted ? Is it necessary to charge Overhead of service department department. Through which methods the service department overheads are charged to production departments. From the following information work out the production hour rate of recovery of overheads in department A, B and C to production

Particulars Rent Electricity Fire Insurance Plant depreciation Transport Estimate working hours

Total 1000 200 400 4000 400 -

A 200 50 80 1000 50 1000

B 400 80 160 1500 50 2500

C 150 30 60 1000 50 1800

D 150 20 60 300 100

E 100 20 40 200 150

Expenses of the service department D and E are apportioned under Departments D E A 30% 10% B 40% 20% C 20% 50% D E 10% 20%

105

The discussion may be consolidated on Secondary distribution Different methods of re -distribution of Overheads Non-reciprocal and Reciprocal methods Notes on secondary distribution and methods solved problems.

Expected out come

D. Absorption of overhead ..................(6 Hours)

Suggested strategy: General Discussion and Group discussion problem solving By Primary and Secondary distribution all overheads are pooled to production departments. Based on this a discussion may be initiated on how the overheads are linked to cost units by citing suitable examples and giving handouts. Lead Points Is it possible to divide the Overheads to the units produced? If the business is labour oriented, can you find out the total working hours from time records. If yes, is it possible to calculate the hourly rate of labour? The departmental overhead is Rs.10,000 and the direct labour hours spent for production is 1,000 hours. Hint: DLHR=Total overhead/no. of direct labour hours. DLHR=? Enough Questions may be asked to arrive at the concept ofMachine Hour rate Activity 1. Compute machine hour rate for the month of December 2005, to cover the overhead expenses indicated below, relating to a particular machine No. 707 : If yes, can you find out the total overheads attributed to a particular unit. .

Case:

106

Per annum Rent of the department (Space occupied by machine 1/5 of the department Lighting of the department Insurance of the Machine Cotton waste oil Salary of Foreman (1/4 of the Foremans time is occupied by this machine The cost of machine is Rs. 92,000 and it has an estimated scrap value of Rs.2000/It is assumed from past experience that(a) The machine will work for 1800 hrs per annum (b) It will incur an expenditure of Rs. 4000 for repairs and maintenance (c) It consumes 5 units of power per hour at cost of Rs. 2.30 per unit and (d) The working life of the machine will be 10 years The discussion and class work may be consolidate d on 60,000 7800 2400 360 600

Absorption of Overhead, Different Methods of absorption

Expected out come: Notes of Absorption of Overhead

Project
Malavika Enterprises is a Manufacturing Company, Producing only a single Product. The Production Process has three stages and the product passes through 3 production departments viz, P1,P2 and P3. There are two service departments S1 and S2, which facilitate production. To produce a single unit and it took 9

hours and for this P1 engaged for 3 Hrs, P2-4 Hrs and P3-2 Hrs. You are provided with the following data. The management wants to find out the actual factory cost of a product and total overheads incurred by each production departments. Help them. During the given period company production 750 units and all units were sold.

107

Particulars Bad debts Bank Loan Book debts Capital Cash in hand Commission received Depreciation machinery Depreciation Office furniture Discount Drawings Employees insurance Factory repairs and maintenance Furniture Indirect wages Insurance of machinery Insurance-office Interest on investments Interest on loan Investments Lighting Machinery Materials Motive power Office salaries Opening stock of materials Rent rates factory Rent rates office Sales Stores overhead Supervisors salary Traveling expenses Wages Sundry creditors Welfare of staff-factory Welfare of staff-office

Malavika Enterprises Trial Balance as on 30-8-05 Debit 1000

Credit 75000

80770 350000 15000 1050 25000 3800 750 25000 2100 2700 35000 8000 1500 750 250 800 50000 1500 250000 150000 10000 12000 15000 2250 1200 335000 6800 4500 630 60000 20250 3000 2500 108

Welfare of staff selling and distribution Work managers salary Total

Closing stock valued at Rs. 11,250 Additional Information. Production Department P1 Direct Wages Electricity (KW) Light Points Number of MRN Value of machinery Floor Area (Sq-M) Number of workers Indirect wages Machine hours worked 20,000 125 25 8 50,000 300 10 2,000 750 P2 22,000 125 20 10 1,20,000 350 16 2,2000 1000

1000 9000 781550

781550

Service Department S1 10 6 S2 5 4

P3 18,000 125 15 10 80,000 400 12 1,800 500

250 4 1000

200 4 1000

On a detailed study it is revealed that the expenses of service departments S1 and S2 are distributed as follows.

Service Depts

Production Depts P1 P2 30 20 P3 40 30

Service Depts S1 10 S2 10 -

S1 S2

20 40

109

Assignment 1. Chart showing the classification of Overheads. 2. Prepare a table of difference between allocation and apportionment 3. Problems on secondary distribution 4. Problems on Machine Hour Rate method. CE Possibilities Assignment Seminar Class test Project

110

UNIT ANALYSIS
Objectives
To get an idea about overheads & classification of overheads To get the concept of steps in overhead accounting, allocation and apportionment of overheads, Primary Distribution, Primary Distribution Summary and problems based on primary distribution. To get the concept of secondary distribution. Secondary distribution summary and problems based on secondary distribution and Direct Labour Hour Rate.

Ideas/Concept
Meaning of overheads, Classification of over heads Element wise Function wise Behavioral wise Steps in overhead accounting and meaning of allocation and apportionment of overheads, Difference between allocation and apportionment of overheads. Primary Distribution, Primary Distribution Summary and problems based on primary distribution.

Activities
Group discussion, Seminar

Materials
Text book, Published materials

Evaluation
Seminar report, Vocational Diary

Hours
04

Group discussion, Problem solving , Project

Text Books, Hand- outs

Prepared notes, Table of difference, Solved problems, Vocational Diary

05

Meaning of secondary distribution. Secondary distribution summary and problems based on secondary distribution (Repeated distribution) and Direct Labour Hour Rate.

Group discussion, Problem solving , Project

Group discussion, Problem solving , Project

Prepared notes, Solved problems, Vocational Diary

05

111

Objectives To get the concept of absorption of overheads, methods of absorption and problems based on Machine hour rate and Direct Labour hour Rate.

Ideas/Concept Meaning of absorption of overheads, methods of absorption and problems based on Machine hour rate and Direct Labour hour Rate.

Activities

Materials

Evaluation

Hours

General discussion, Group discussion and problem solving

Text book

Prepared Notes, Solved problems.

06

112

Terminal Evaluation Questions.

1. Sreeganga printing company has two operating department, No.1 Printing & binding and No.2. Engraving. The company has a job order cost system using single pre determined expense rate. The management has been made aware of the deficiencies of using such a rate and now interested in departmentalizing factory overheads. You are called for doing this job and on a study it reveals that Department 1 has 8 similar machines representing a large investment. Dept.2 has got several workers being paid at rate per hour. The estimated factory overheads Dept 1 Factory overheads Direct Labour hours Machine hours Help the management by making. a. An analysis to advise management regarding the types of rates to be used in these departments. b. A computation of the rates recommended. 2. Lalu manufacturing company has got production and service departments. You are the person in charge of cost accounting department. The management wants to know the actual overhead of the production department. As a practicing cost accountant you know that to find out the actual overhead cost of a production department the overheads of service department should also be included in the production department. By keeping all the above ideas in mind, how will you arrive at the actual cost of the production department and specify the various methods you suggest. 3. Complete the following table 40000 10000 20000 Dept 2 120000 40000 -------

Overheads Fixed overhead Selling overhead Variable ovehead Indirect Labour Production overhead

Classification basis Behaviour wise Classification ? ? ? ? 113

4. A department store has several departments. They asked you to recommend for apportioning the following items of expenses to its department. Give your suggestions. a. Fire insurance of building b. Rent c. Delivery expenses d. General administration expenses e. Personnel department expenses.

114

UNIT - 3

AUDITING

3.1 3.2

Conduct of Audit Audit Report

115

3.1 Conduct of Audit

Introduction
Learners have a general idea on Auditing. Proper execution of any work requires appropriate planning and program of action. This chapter deals with the preparation done by the auditor before the commencement of audit work and the conduct of an audit work.

Curriculu m objectives
To analyse the preparation before the commencement of audit, audit planning, procedure of audit through general discussion, interview with an expert, project and present a report. To develop an idea of audit program, its advantages and disadvantages, audit working papers, Audit note book, Audit file through reading material, interview and develop the skill to prepare an audit program, Audit note book, Audit working papers through practical work and prepare notes.

Syllabu
Conduct of audit Preparation before commencement of audit Audit planning Audit program advantages and disadvantages Audit note book, Audit file Audit working papers procedure of audit Voucher Types of vouchers Vouching Important points to be noted while vouching use of special ticks, Routine checking Test checking, deciding sample organization of audit staff.

Through the chapter ..15 Hrs

This chapter is subdivided into: a. Preparation before Audit . b. Procedure of Audit c . Procedure of Audit interview and project.. 4 Hrs. 2 Hrs 9 Hrs

A. Preparation before Audit .

Suggested Strategy : General discussion and case study.

4 Hrs.

For acquiring the concept of preparation before audit, a discussion may be initiated by citing a case study.

116

Case A meeting of the senior learners of VHS was convened to discuss about study tour. The teacher asked them to list out possible location combinations including distances. They gathered information by discussing in groups and to help them, the teacher supplied brochures published by various tour agencies. And after discussion, group decides the location. The details of places of visit and the dates were discussed. The teacher instructed the learners and escorting teachers about the tour. For the smooth conduct he has assigned duties to learners and make a record of it. Bus Booking Binu and Raju Cashier Shyam Room Booking Krishnan Route Mapping Sankar and Rahim Cultural activities Sudha and Joseph Discipline Leaders of each class

In order to have a feed back of tour, assigned Sindhu the duty of recording the limitations and drawbacks in a book. The learner in charge of the accounts asked to present a detailed record of amount expended.

Lead Points:
How did they select the place? How did they finalize the place and dates of tour? What is the need of instructing the learners and teachers? As a conductor of tour, what are the preparations made by the teacher? Hint: Duty Assignment, Chart Preparation etc. The discussion should be matched to the points on preparations made by the auditor before audit work and consolidate on the following points: Knowledge about business Scope of work Inst ructions Preparation by the auditor. From the above discussion the learners will acquire the concepts of preparation by the auditor before the commencement of audit.

117

Expected Out come

Notes on preparations made by the auditor before audit work.

B .Procedure of Audit

( 11 Hrs)

The procedure of audit can be transacted through 3 sessions. Session 1 : General Discussion and case study .. 2 Hrs. Session 2 : Interview .. Session 3 : Project 6 Hrs. 3 Hrs.

Session 1
Suggested Strategy: General discussion and case study. Initiate a discussion based on case study.

Case
Mr.Ravi, a learner was asked by the principal to purchase 10 chart papers and 5 marker pens. He gave Rs.50 to Ravi for the purchase. Ravi purchased the items and gave to the principal along with the balance amount of Rs.10. But the principal was not satisfied by the oral explanation about the expenditure. Lead Points: How Ravi convinces the Principal about the amount expended? Is it necessary to support the explanations with a written document? If yes, how will you call it? If the documentary evidence missed or misplaced, how Ravi overcome the situation? From the above discussion and case study, the learners acquired the concept of voucher and types of vouchers. The discussion may be continued to get the concept of vouching and the important point of voucher to be considered while vouching. For this a case study may be cited.

Case
The principal asked you to verify the authenticity of transactions recorded in lab registers with the help of documentary evidences.

Lead Points
How will you verify the transaction. On verification of vouchers, what are the important points to be considered.

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The discussion may be concluded by consolidating on Vouching Essentials of voucher. Notes on Voucher, Types of voucher, Vouching and essentials of vouchers.

Expected Outcome

Session 2
Suggested strategy: Interview Learners have a general awareness on the subject auditing. An expert like a Chartered Accountant may be invited for the purpose of enabling the learners to have deep knowledge over the topic. Through an interview with him, the learners can develop an interest in this branch of knowledge. Before the interview, the teacher must help the children to plan the inte rview regarding the date, venue and questionnaire. The following points must be included in the questionnaire. The learners are expected to attain relevant information about the topic of interview. Purpose of audit Scope and duties of an auditor Nature of business Accounting system Instructions to the client Preparation by the auditor. Vouching Audit Markings Voucher, types of vouchers and its contents. Audit program Audit note book Audit working papers Test checking Routine checking.

119

With the help of expert, introduce and demonstrate a real work of audit. Expected Outcome Interview report

Session 3 Project
Assign the task of auditing the accounts of school co-operative society and ask them to prepare an audit program, audit notebook and audit working paper. For this collect vouchers and accounts of society and duplicate enough copies to enable all the learners in group to get it practiced. Expected outcome Notes on procedure of audit Project Report

Assignment:
Ask the learners to prepare a chart of merits and demerits of audit program. C E Possibilities Assignment Interview Report Class Test Project Report

120

UNIT ANALYSIS
Objectives To get the concept of preparation before commencement of audit To get the concept of procedure of audit. Voucher, vouching, Test checking, Routine Checking audit working papers, Audit note book and Audit file. General discussion, Case study, Interview , Project. Text book, Collected materials. Prepared notes, Project Report, Interview report 11 Ideas/Concept auditor before the commencement of audit work, Audit programme Activities Case study Materials Text book, Hand outs Evaluation Prepared notes. Hours 04

Preparation made by the General discussion,

121

Terminal evaluation Questions

1. Suppose Mr.Ram is appointed as the auditor of ABC Ltd what are the preparation he would take before the audit work. 2. When the transaction takes place in a business unit, the accountant keeps all the vouchers systematically. State the reason for keeping these vouchers properly?

122

3.2 AUDIT REPORT

Introduction
The purpose of audit procedure carried out by the auditor during the course of an audit is to enable him to report to the persons who have appointed him. This chapter deals with the meaning report. and types of audit

Curriculum objectives
To develop an idea on audit report, unqualified report, qualified report, adverse report, disclaimer of opinion, contents of audit report through reading materials, group discussion and prepare notes. To develop skill in drafting a qualified report through demonstration, discussion and draft a report. To differentiate between audit report and audit certificate through reading material and prepare a chart.

Syllabus
Audit report meaning of Audit report distinction between report and certificate contents of the audit report kinds of report Unqualified report Qualified report Adverse report and Disclaimer of opinion.

Through the Chapter..

Audit Report

(5 Hours)

This chapter contains details on audit report. Suggested Strategy: Group discussion After completing the work on conduct of audit, it is necessary to prepare and submit a report to the client. Learners have the experience of preparing and submitting seminar report. Match the concept of report to audit work through discussion. Exhibit copies of handouts on audit report for internalizing.

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Lead points Is it necessary to communicate the findings and suggestion of audit work? If yes through which medium. Is it written or oral? What are its contents? If the report satisfies all the contents, what will you call such report? If such report doesnt satisfy any of the content, how will you call it? If a report doesnt satisfy almost all the contents positively, how will you call it? If on audit work, auditor failed to examine the books of accounts due to non-availability of records for examination, how the auditor

communicate this fact? Consolidate the discussion on Audit report Contents of audit report. Clean, qualified, adverse report and disclaimer of opinion. Continue the discussion on audit certificate by asking certain questions on difference between Learners Profile Card and Certificate of merit. Lead Points Is there any difference between learners profile card and certificate of merit. If yes, on what areas it differs. By consolidating the discussion, list out the difference between audit report and audit certificate. Activity. Based on the project work done in the previous class, prepare an audit report of school society. Expected Outcome Notes on audit report, its contents and types, Audit certificate.

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Assignment Chart on difference between audit report and audit certificate. CE Possiblities Class test

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UNIT ANALYSIS
Objectives To get an idea about Audit report and types of audit report, Disclaimer of opinion and Audit Certificate. Ideas/Concept Audit Report, types of audit report, Unqualified report, Qualified report, Negative report, Disclaimer of opinion, Audit certificate, Difference between audit report and certificate. Activities General discussion, Demonstration, Project Materials Text book, Audit report collected from school Cooperative societies, Bank etc. Evaluation Prepared notes, Project report, Chart, Vocational Diary Hours 05

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3. Terminal Evaluation Questions. 1. Kaivalya group appoints you as their auditor. You are asked to audit and report the accounts for the financial year 2005-2006. In order to conduct the audit work, what are the preparatory works you are supposed to carryout? a. After completion of the audit work, how will you communicate this to the management? b. Complete the following table. Clause If you have noticed some points which are answered negatively If you are fully satisfied with the contents of the books of accounts If you are not at all satisfied with the contents of books of accounts Types of report ? Clean report ?

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UNIT 4 TAXATION

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4.1 Income Tax Act, 1961

Introduction
Tax is the main source of revenue to the government. Amongst the Direct Taxation, Income Tax constitutes the major portion. Government of India has passed legislation to administer the Income Tax and its collection through Income Tax Act, 1961 amended and made up to date. Through this chapter learners will be able to get the concept of Income Tax Act and the major basic terms.

Curriculu m Objectives
To acquire idea of the term person, Assessee, Assessment year, Previous year, Income, Gross Total Income, Total income, list of incomes exempted from tax, chargeability of income through reading materials, discussion and prepare notes.

Syllabus
Income Tax Act of 1961 : (detailed study not expected) Definitions person - assessee assessment year previous year income gross total income and total income chargeability of income Taxation of previous years income during the same year- list of income exempted from tax.

Through the Chapter .(10 Hrs)

For convenience this chapter is subdivided into: a. Income Tax Act, 1961 b. Previous year, Asse ssment year, Gross Total Income c . Person, Assessed d. Income, Total Income and exempted income (2 Hrs) (3 Hrs) (2 Hrs) (3 Hrs)

A. Income Tax Act , 1961

( 2 Hrs)

Suggested Strategy: General Discussion and Group discussion. The teacher initiates a discussion by putting forward the lead points. Cite a few major sources of revenues for the Government Who collects the tax from the people?

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If a person having various sources of income, can he avoids paying tax? If he deliberately avoids tax will he get punishment? Suppose there is no law relating to tax, is it possible to punish that person? . Based on discussion, the teachers help the learners to realise that in India

there is a separate Act called Income Tax Act, 1961, Income Tax Rules, 1962 and also Finance Act passed every year which altogether regulate the income tax in India. Expected Outcome Notes on Income Tax Act. The discussion may be continued on important definitions under Income Tax Act, 1961.

B. Previous Year, Assessment year, Gross Total Income

Suggested Strategy: Case study, General discussion.

(3 hrs.)

Mr. Nelson has earned the following income for the financial year 2005 which has ended on 31 -03-2005. Salary Income from business Interest on deposit Lead Points What was the gross total income of Mr.Nelson? What do you mean by Financial year? Can you say which is the beginning month of the financial year and when does it end? When should he compute his exact gross total income? If so, when he will be able to ascertain the tax liability? Suppose the current tax rate is 20% how much will be his total tax? Should it be paid on 31-03-2005 itself? The above discussion will help the learners to attain concepts on Gross Total Income, Previous Year and Assessment Year. Activity .1 Determine the Assessment year for the following previous year Rs.1,20,000 Rs. 60,000 Rs. 20,000

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Previous Year 01-04-2003 - 31-03-2004 01-10-2004 - 31-03-2005 01-08-2005 31-03-2006 Expected Outcome

Assessment Year 2004 2005 ? ?

Notes on Previous year, Assessment year and Gross Total Income.

C Person, Assessee

(2 hrs)

Suggested Strategy : Group discussion Teacher continued the discussion by giving the following lead points. Who is a person in its real sense? In accounting concepts, is it only human beings, which come under the meaning of a person? Cite a few examples of different types of person. The teacher, with the help of the meaning of Person in accounting concludes that person under tax laws include Natural persons, Companies, Firms etc. Activity .2 Person Mr.Raja Ratnam Kerala University Travancore Titanium Products Ltd Mr & Mrs.Ranga Nayakam (Married under Hindu Marriage Act) Mr.Shankar & Mr.Shanmughan (Partners in a partnership firm ) ? Status Individual ? ? ?

Add more activity to develop the skill to categori ze the status of Person The discussion may be continued by giving the following points. Whether all persons are liable to pay tax If yes what do you call, these persons If a person do not pay tax, what do you call him

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From the above discussion the learner will attain the concept of Person, Assessee Expected outcome Notes on Person, Assessee

D. Income, Total Income, Exempted Income

Suggested strategy: General discussion and case study

(3 Hrs)

Mr.Jayan is the general manager of Arya Infosis Ltd., he draws monthly salary of Rs.15000. He deposited Rs.50000 in a bank on 1-04-2005 for which he receives interest Rs.5000 per annum. He received Rs.2500 from sale of coconut which is harvested from his own agricultural land. He received Rs.5000 from his father as a birthday gift.

Lead Points.
The discussion may concluded and consolidated on Income Total income Exempted incomes What are the different income of Mr.Jayan? Whether he receives all income regularly? Whether all income he receives from a definite source? Whether all incomes he receives are taxable? Whether he gets any deduction on income

Expected outcome
Notes on Total income, Income and exempted income. Assignment Prepare list of Incomes exempt from tax. C E Possibilities : Assignment. Class Test.

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UNIT ANALYSIS
Objectives To get the concept of Income Tax Act, 1961 To get the meaning of Previous Year, Assessment year, Gross Total Income To get the meaning of Person, Assessee To get the meaning of Income, Total Income and exempted Income Ideas/Concept Income Tax Act, 1961, Finance Act, Income Tax Rules Previous Year, Assessment year, Gross Total Income Activities General discussion, Group discussion Case Study, General Discussion Materials Text book Evaluation Hours

Hand Outs, Text Book

Prepared 02 notes, Partic ipation in discussion Prepared 03 notes, Participation in discussion Prepared 02 notes, Participation in discussion Prepared 03 notes, Participation in discussion

Person, Assessee

General Discussion

Text Book

Income, Total Income and exempted Income

General Discussion, Case Study

Text Book, Hand-outs

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Terminal Evaluation Questions

1. Complete the chart

Previous Year 01-04-2004 - 31-03-2005 ? 10-10-2003 31-03-2004

2. Match the following

Assessment Year 2005-2006 2006 2007 ?

Sl.No 1 2 3 4 5 6. Individual

Status

HUF Company Firm Local Authority Artificial juridical persons

Cases A and B , partners entered into partnership. Cochin Corporation Kartha University of Kerala Mrs.Santha Infosis India Ltd

3. Income Tax is a tax on Income comment. 4. Find the odd one out. a. Property tax b. Income tax c.VAT

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4.2 Residence and Tax liability

Introduction.
The levying of Income Tax is on the Total Income of the Assessee. Total Income is determined on the basis of his Residential Status. This chapter is visualized to understand the different residential status of Person and the tax liability.

Curriculum Objectives
To get an idea on Residential status of person, various heads of income, procedure of computation of Total Income through general discussion, Case study, interview with expert and prepare report.

Syllabus
Residence and Tax Liability: Residential Status of person (Individual only) Scope of income tax liability Income under various heads of income computation of tax (rate of tax only)

Through the chapter (10 Hrs)

This chapter is sub divided into: a. Residence and Tax liability.. (5 Hrs) (5 Hrs)

b. Heads of Income and computation of tax.

A. Residence and Tax liability..

Suggested Strategy: General discussion and interview with an expert.

(5 Hrs)

To get the concept of residential status and tax liability, initiate a discussion. Distribute among the learners a copy of the prepared handouts for reading. Besides general discussion, an expert may be invited for an interview. Proper planning should be made to conduct the interview. Schedules containing questions based on Resident Ordinarily resident Not ordinarily resident Tax liability

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Scope of income Chargeability of income Income exempt from tax

The discussion and interview may be concluded and consolidated on the above given points. Learners must be instructed to prepare interview report individually. Expected Outcome Interview Report.

B. Heads of Income and computation of tax

Suggested Strategy: General discussion and case study

(5 hrs)

Mr.John Thomas a Chartered Accountant, works as accounts manager of M/S Sun Shine India Ltd., He draws a monthly salary of Rs.20,000. In addition to this he practiced as an auditor and earns Rs.25,000 as his fees. He has three houses. One house is let to Mr.Minu @ Rs.2500 per month as rent. He won the state lottery for Rs.2,00,000 during the year. Out of three houses one house costing Rs.10,00,000 sold for Rs.12,00,000 during the year. He re ceives Rs.10,000 from agricultural produces of his own land. Lead Points Through the discussion, the learner will get the concept of various heads of income. The discussion may be continued on computation of tax by asking some questions. Which Act determines the tax rate? How will you compute tax? Whether taxes are computed at single rate on total income. Distribute prepared handouts on prevailing tax rates What was the Gross Total Income of Mr.John Thomas How do you arrive at? What are the different types of income of Mr.John Thomas?

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Expected Outcome : Notes on Heads of Income, Tax rates. Assignment Chart showing residential status of an individual C E Possibilies Assignment Class Test

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UNIT ANALYSIS
Objectives To get the concept of Residential Status, Tax liability, Determination of Residential status To get the concept of Heads of Income and computation of total income and tax liability. Heads of income, Tax Rates. Tax liability Case Study, General Discussion Hand Outs, Text Book Ideas/Concept Basic Conditions, Additional conditions for determination of residential status of individual. Activities General discussion, Interview Materials Text book Evaluation Prepared notes, Participation in discussion, Interview report , Vocational diary Prepared notes, Participation in discussion 05 Hours 05

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Terminal Evaluation Questions

1. Sankar , an advocate associated with Lawyers chamber, a leading professional body of lawyers. He draws a monthly salary of Rs.15000. in addition to this he acts as legal advi sor to M/S Net link from where he is getting Rs.10000 per month as fees. He owns a shopping complex from where he gets Rs.5000 per month as rent. During the year he gets Rs.1500 as dividend. He won a lottery of Rs.50000. He received Rs.5000 from agricultu ral produce. He donate Rs.5000 to Prime ministers relief fund. Based on the above case help him to compute his total income.

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4.3 Assessment and Returns

Introduction
The learners are now familiar with various heads of income, Tax rates and computation of Total Income. The details of Total Income should be communicated to Income Tax authorities in proper form. This chapter deals with various types of assessment and forms of returns.

Curriculum Objectives
To get the concept of different types of assessment and returns through general discussion, Group discussion and prepare notes, to collect application form for PAN and various forms for filing returns and develop skills to fill up the forms through class work and exhibit as a record.

Syllabus
Procedure for Assessment : Voluntary return obligatory return return of loss belated return revised return compulsory return defective return prescribed forms used for filing return of income. Types of Assessment: Self Assessment assessment on the basis of return regular assessment by Assessing Officer reassessment precautionary assessment.

Through the Chapter

.(10 Hrs)
(5 Hrs)

This chapter contains: a. Procedure of assessement and types of return.. b. Types of assessment

(5 Hrs)

A. Procedure of assessement and types of return.. (5 Hrs)

Suggested Strategy : General discussion and Group discussion. A general discussion may be initiated to recollect the procedure of assessment in Kerala Value Added Tax Act. Distribute the handouts of the type of returns and assessment under the Income Tax Act and initiate a group discussion. Lead Points. How will you collect Income Tax? How do they collect it?

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Do we have to submit annual accounts showing the total income earned and its tax liability? What are the different types of returns? Is there any prescribed time for filing returns? Is there any prescribed form for filing returns? If the assessee incurs loss, is it necessary to file return? Through the above discussion the learner will get the concept of various

types of returns. The discussion may be continued on various types of Assessment. Expected Outcome Notes on procedure of assessment and types of return.

B. Types of Assessments (5 Hrs)

Suggested Strategy : General discussion and Class work. A General discussion may be initiated based on the handouts supplied. Lead Points Lead points may be asked to ge t all types of assessment Activity Help the learners to fill up Naya Saral (or any other forms used in Income Tax Department) The discussion and class work may be concluded and consolidated on Different types of Assessment. Expected Outcome: Notes on Voluntary return, obligatory return. Return of loss, Revised return and Defective return. Assessment, Self assessment, Regular assessment, Reassessment Precautionary Assessment and Best judgment Assessment. Assignment Collect various forms like PAN, Naya Saral etc and fill up and exhibit in record. How the department makes assessment? Is it possible to compute tax by the Assessee himself? If yes how will you call it? .

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C E Possibilities Assignement Class Test.

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UNIT ANALYSIS
Objectives To get the concept of procedure of Assessment and types of returns To get the concept of various types of assessment. Ideas/Concept Procedure of Assessment , Voluntary Return, Obligatory return, Return of loss, Defective return, Revised return. Self Assessment, Regular Assessment. Re-assessment, Best judgment Assessment, Precautionary Assessment. General Discussion, Class work Hand Out, Text Book Prepared notes, Participation in discussion 05 Activities General discussion, Group discussion Materials Text book Evaluation Prepared notes, Participation in discussion. Hours 05

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Terminal Evaluation Questions

1. X, an individual who has to file re turn on 31st July (the date fixed for filing
return of individuals) 2004 does not file return up to 31st July, 2004. a. Can X file return in the above circumstances? b. What type of return he has to submit? c. While verifying the return, the Assessing Officer finds that it is incomplete due to lack of relevant documents. Assessing Officer intimate Mr.X about this defect. In the circumstances how will you call this return?

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Appendix 1
List of items to be included in Record
Financial Accounting 2. Journal 3. Ledger account 4. Purchase requisition 5. Material requisition 6. Purchase order 7. Goods received note 8. Debit note 9. Credit note 10.Cash bill 11.Invoice 12.Intend 13.Cash voucher 14.Credit voucher 15.Journal voucher 16.Receipt voucher 17.cheque voucher 18.Delivery note. 19.Bank pass book 20.Cheque 21.Pay in slip

Cost Accounting
1. Chart showing cost classification on a. Element b. Function 2. Format of cost sheet. 3. Bin card

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4. Stores ledger 5. Employee history card 6. Labour requisition card. 7. Daily time sheet 8. Weekly time sheet. 9. Idle time card. 10.Job card 11.Pay slip 12.Wages abstract 13.Time card.

Auditing
1. Chart on errors and frauds. 2. Chart on types of audit. 3. Audit program. 4. Format qualified report.

Taxation
1. Forms VAT 2. Application for PAN 3. Form 1, 2, 2B, 2C, 3, 3A, Saral, Form 16

Typewriting
1. Specimen copies of official and business communications.

Computer
1. Formatted table 2. Aligned running matter.

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Appendix 2
Reference Books Financial Accounting.
Advanced Accountancy Advanced Accountancy Advanced Accounts Advanced Accountancy (Vol.1) Advanced Accountancy (Vol.1) - R.L. Guptha and M. Radha Swamy. - S.P. Jain and Narang - M.C. Shukla and T.S. Grawal - Arulananthm and Raman - S.N. Maheswary - Jain and Naranj - V.K. Saxena and C.D. Vashist - S.P. Ayyengar - Bhatacharya. - B.M Lal Nigam and G.L.Sharma. - B.N Tandon. - Spicer and Peglar. - Dr.T.S. Sharma. - R.G.Saxena. - Jagadish Prakash. - V.P.Gaur and Naranj - Dr.H.C.Mehrotra and S.P Goyal

Cost Accounting
Cost Accounting Cost Accounting Cost Accounting Principles and Practices of Cost Accounting Theory and Techniques of Cost Accounting

Auditing
Practical Auditing Practical Auditing Auditing Principles and Practices of Auditing Auditing Principles, Practices and Problems

Taxation
Income Tax Law and Practice Income Tax Law and Practice Gargs Income Tax Rules Kerala Value Added Sales Tax Act.

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