1 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
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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
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Prepared by: State Council of Educational Research & Training (SCERT)
Vidyabhavan, Poojappura, Thiruvananthapuram -12 Kerala
E-mail:[email protected]
Type setting by: SCERT Computer Lab.
©
Government of Kerala Education Department
2006
Preface Dear Teacher
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This Teacher’s 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 will help the teacher to develop the skills and
experience required for effective classroom transaction.
Creative criticism and suggestions for improvement are most welcome.
With regards
Thiruananthapuram Dr. E. Valsala Kumar July, 2006 Director SCERT
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Contents
Part I
I Approach – General .................................................................5
II Learning Strategies ...................................................................27
III Curriculum Objectives and syllabus .........................................40
IV Planning ...................................................................................47
V 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
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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 of Vocational Higher Secondary Education have to be
approached. The need for meaningful linkages between the world of work
and world of education is well recognized. The essence of the
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
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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 for dealing with changing economics
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 self-
employment. 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.
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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
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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.
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• 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.
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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 sub-
groups.
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 creative 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 accepted 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
one’s 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 among learners, collective enquiry, assessment and
improvement, group activity and collaborative learning by 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 Burner’s 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 responsibility 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 based 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 cause-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 one’s 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 earlier 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
Society
The new educational policy uplifts the social commitment of the learner.
Therefore the society can also give some valuable contributions in this
changing situation. The new system also ensures 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
26
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 present 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
28
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 paper
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.
29
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 answer 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
30
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.
31
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
32
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
33
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 of discussion by giving lead points and follow up
interactions
3. Transaction stage in which the key points are reviewed by the teacher
and
4. Summarizing stage in which teacher provides additional support
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
34
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
reached may be entered by each learners. A group representative must
present this during consolidation in which the teacher may correct or add
information’s 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.
35
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 team
the 1st team answer the question and explain the background if
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
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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 using 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
37
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 Level. 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
38
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 data’s/information’s/ 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 understand 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.
39
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.
40
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.
41
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 Rowan plan
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
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.
42
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
43
Syllabus Theory
• Bank Reconciliation Statement - Need for Bank Reconciliation
Statement - Reasons for difference in cashbook and pass book-
preparation 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 overheads-
collection of factory overheads apportionment of factory overheads-
Reapportionment of service department overheads- non reciprocal and
reciprocal basis-Repeated distribution. Absorption of overheads-
methods of absorption- Machine hour rate.
44
• 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.
45
• 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 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.
Computerised Accounting 140 Hrs.
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.
46
• 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.
•
47
PLANNING
In the context of the changing scenario in the field of education, the role
of the teacher is not simply to teach the syllabi. The emerging needs of
education calls for facilitator’s 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 day’s learning.
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ANNUAL PLAN
Class: II Year Accountancy and Auditing
Term Month Unit
number Name of unit Hours
Total
hours
June 1.1 Bank reconciliation statement 10
July 1.2 Rectification of errors 15
July I
AUG 2.1 Materials 25
50
September 2.2 Labour 20
October 2.3 Overheads 20
November 3.1 Conduct of audit 15 Ii
December 3.2 Audit report 05
60
4.1 Income tax act, 1961 10 January 4.2 Residence and tax liability 10 Iii
February 4.3 Assessment and Returns 10
30
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UNIT PLAN
SUBJECT: FINANCIAL ACCOUNTING UNIT : BANK RECONCILIATION STATEMENT
Sl.No Objectives Ideas/Concept Activities Materials Evaluation Hours
1
To get the concept of bank reconciliation and needs through reading materials group discussion and present a note on it.
Bank Reconciliation statement, Need for preparing bank reconciliation statement
Group discussion,
Text book, Bank Publications, Journals, Specimens
Acquired concept. Prepared notes.
02
2
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
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
3
To develop skills in reconciling balances of cash book and pass book through problem solving
Preparation of bank reconciliation statement.
Group discussion problem solving
Text book, bank statements
Solved problems
05
50
DAILY PLAN Class : II year Date: 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, which studied in the previous classes should be conducted. Help them to recollect it by asking questions.
• How will you record the banking transactions in the books of accounts?
• What is the proof of banking transactions provide by the bank?
Active participation of learners. Learners are got an idea on concept of cash book (with bank column) and pass book
Activity 2 Learners are grouped into three or four. Each group are given the copies of cash book and pass book.(Prepared hand outs) and ask them to observe and analyse.
• Is there any difference on closing balance of cash book and pass book?
• If yes, why it differs?
Groups were actively engaged. Sachu and Rakesh of group 2 asked why the transactions not appeared in both records in the same day. Shyam of group 3 asked how we know the entry of bank charges in pass book. Consolidate the discussion on concept of reconciliation and reasons for differences.
Subject : Financial Accounting Unit : Bank Reconciliation statement Time : 1 Hour
51
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
52
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.
53
For eg:-
• Assignment
• Collections
4. Performance task (Tests)
Activities related to the achievements of the learner.
For eg:-
• Class test (oral/ written/ performance test)
• Quiz
• Interview
• Open book examination
• Group testing
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 should undergo activities related to all the 5
areas during the course of the two years.
1. Study project
Sl.No Stages Criteria Score Total Scores
1. Planning
Relevance of the study Identification of problem Ability to select appropriate tools, ability to select suitable bearing method.
4/3/2/1
2. Data Collection Ability to collect sufficient and relevant data. Ability to classify and arrange data for analysis. Reliability and authenticity of the data collected.
4/3/2/1
3. Analysis and Inference
Ability to analyses the data Systematic arrangements. Ability to draw inferences based on analysis. Ability to
4/3/2/1
54
give suggestions based on inference.
4. Report presentation
Ability to present in logical and sequential order, authenticity of report, time bound completion.
4/3/2/1
5. Awareness of the content
Knowledge of content and process. Ability to analyze data. Ability to justify inference. Ability to explain. Strategies and methods adopted.
4/3/2/1
Sl. No
Criteria Score Total Scores
2. 1. 2. 3. 4. 5.
Case study Identifying the problem Approach to the problem Time bound Action Analysis of the problem Problem solving / Reporting
43/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1
3 1. 2. 3. 4. 5
Field study Attitude and readiness towards the task Capacity for Observation Data collection Application of ideas Documentation / Recording
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.
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
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.
Seminar Planning and Organization Collection and data / content Observation / appraisal and clarity Content knowledge Presentation
4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1
6. 1. 2. 3.
Debate, Panel discussion Readiness to participate Depth of subject knowledge Communication skill
4/3/2/1 4/3/2/1 4/3/2/1
55
4. 5.
Ability to justify the stand Presentation
4/3/2/1 4/3/2/1
7. 1. 2. 3. 4. 5.
Group Discussion Readiness to participate Depth of subject knowledge Communication skill Ability to justify in a democratic way Leadership quality
4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1
8. 1. 2. 3. 4. 5.
Interview Planning Preparation of Questions Communication skill Participation Report preparation
4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1
9. 1. 2. 3. 4. 5.
Collection Collection of materials/Documents Relevance and comprehensiveness Presentation Awareness of the content Time bound progress of work at each stage
4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1
10. 1. 2. 3. 4. 5.
Quiz Preparation of questions Relevance of question Presentation Active participation Time management
4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1 4/3/2/1
11. Classtest Class test should be oral/ written/ performance. It is to be evaluated on the basis of specific scoring indicators
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
56
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
concerned 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 Score Typewriting English-I paper 20 Typewriting English-II paper 30 Computerized Accounting 50 Viva (Vocational Theory Based Practical) 50 Total 150
SCHEME OF EXAMINATION Typewriting English - I Paper (Speed) 140 Hrs. Maximum Score: 20
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
57
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 140 Hrs. Max.Score : 50 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.
• Trail Balance, Final Account, budget, Sales Tax calculations, Inventory
control, Pricing and Movement of Inventory, Valuation of stock, Cost
centre, Cost units .
58
Accounting Applications Using Electronic Spreadsheet
• Payroll Accounting
• Loan Repayment Schedule
• Depreciation.
Practical Evaluation - 150 score
A learner of commerce based Vocational Courses has under go practical
work on type writing and computersied accounting. There for practical
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 20 Score
Type Writing English Paper – II 30 Score
Computerized Accounting 50 Score
External Practical - Viva VOCE 50 Score
Total 150 Score
Indicators and scores for P.E
Typewriting English – 1 - 20 Score
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 Score %
0 100
1 98
2 96
3 94
4 98
5 90
6 86
7 82
8 78
59
9 74
10 70
11 64
12 58
13 52
14 46
15 40
(Mistake in stroke 5 x full mistake) Typewriting English Paper – II – 30 score Item Evaluation points Score Statement Neatness Proper aliment, Systematic arrangement, Punctuations 3 Private letters/Business letters / Official letters Neatness, format, (With carbon copy) Quality of carbon copy, Contents 8 G.O/ Proceedings, circulars, Notices, Notifications Neatness, Alignment, 6 Punctuations Balance Sheet / Profit and loss account Neatness, Systematic Arrangement, alignment 10 Display /advertisement/ Judgment etc Neatness, border design Content 3 Total 30 Score Computersied accounting 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 / creating a group of
accounts
60
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 learner’s 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
61
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 learner’s 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 Items Scores 1. Regularity and punctuality 10
2. Field visit / survey (anyone) vocational project
20
3. OJT/Simulated experiment performance – Camp/exhibition/clinic Performance – PSCTC (anyone)/Practical skills
20
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 2 3 4 5 1. Regularity Never
regular After regular
Equally regular
Most of the time regular
Always regular
2. Puntuality Never punctual
Often punctual
Usually Punctual
Most of the time punctual
Always punctual
62
item Evaluation indicators Scores Score Regularity and punctuality
10
Value addition 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
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
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
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
20
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
63
the growth and development of individual students both in cognitive and non-
cognitive 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
students’ performance known as grading system has been evolved. It is quite
extensively used all over the world. At the Vocational Higher Secondary
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 A+
80-89 A
70-79 B+
60-69 B
50-59 C+
40-49 C
30-39 D+ 20-29 D Below 20 E
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UNIT –I FINANCIAL ACCOUNTING
1.1 Bank Reconciliation Statement
1.2 Rectification of Errors
65
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
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.
Syllabus Bank Reconciliation Statement - Need for Bank Reconciliation Statement -
Reasons for difference in cashbook and pass book-preparation of Bank
Reconciliation Statement.
66
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. Cr.
Date Particulars LF Amount
Rs
Date Particulars LF Amount
Rs
2006 May
1
To balance b/d 6,800
2006 May
9
By Salary [ChequeNo3334
v 5,400
8 ,, cash v 8,000 15 Ramu [ChequeNo3335] 4,200
17 ,, cash v 3,000 20 ,, Cash v 5,800
24 ,, Hari (cheque) 4,000
30 31
,, Rent [chequeNo3336] balance c/d
1,400 5,000
21,800 21,800
CANARA BANK
Pass Book
Name: Lekshmi Traders
Account No: 22388081
Date Particulars Withdrawal(Dr) Deposit(Cr) Dr Cr Balance
2006 May1 Balance b/d 6,800
8
Cash
v8,000 14,800
67
10 Salary [ChequeNo:3334]
v5,400 9,400
20 Cash v5,800 3,600
17 Cash
v3,000
6,600
29 Dividend collected 2,000 8,600
31 Bank charges
100 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 Pass Book Cash balance if higher deduct otherwise add
Cash book balance (Rs)
Balance 5000 Paid Ramu (Cr) Cash book balance is down so add (+) 4200 Paid Rent Cash book balance is down so add (+)1400 Received from Hari
? ?
Dividend ? ?
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collected Bank Charges ? Bank balance
as shown 8500
Likewise prepare a table showing adjustments based on the balance as
per pass book.
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
69
UNIT ANALYSIS
Objectives Ideas/Concept Activities Materials Evaluation Hours
To prepare Bank
Reconciliation
statement
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.
Group discussion,
comparison, Analysis,
Problem solving, Case
study, Field visit
Text book, Bank
Publications,
Journals,
Specimens
Acquired
concept .
Prepared notes.
Solved problems.
10
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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 Cr
Date Particulars Amount Date Particulars Amount
2005
July 1
To Balance b/d
2000
2005
July 3
By David
500 5 B/R Discounted 2380 9 Rajan 200
10 Babu 80 16 Textile corporation 300 20 Chandran 360 21 Thomas 400
24 Mathews 800 27 Cash 240
28 Cash 120 30 Sangeetha 1100
31 Smitha 600 31 Balance c/d 3600
Total 6340 Total 6340
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Canara Bank
Pass Book
Name : M/s. Soundarya Herbs
Account No.001210
Date Particulars Withdrawals Deposit Dr/Cr Balance
2005
July 1
Balance b/d
2000 4 To David 500 1500
5 By Bills(Discount) 2380 3880
12 By Babu 80 3960
13 To Rajan 200 3760
17 To Textile Corporation 300 3460
27 To Self 240 3220
28 By Cash 120 3340
29 To B/R (Dishonoured) 2400 940
30 By G Ghosh 220 1160
30 By Automobiles Ltd(Int) 60 1220
31 To Chandran 360 1580
31 To Bank Charges 20 1560
Communicate the finance manager through a statement showing causes
of disagreement.
72
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 free
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 doesn’t 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 into-
4. Identification and location of errors (5 hrs)
5. Rectification of errors and preparation of suspense account (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
73
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.
74
Activity: 1
Complete the table
Transaction Types of Errors
1. Purchase of furniture was debited to
purchase account.
Error of principle
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/-
?
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.
75
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 Suresh’s account.
3. Payment of rent Rs. 260 debited to Land Lord’s 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.
Expected out come
Notes on Rectification of errors, suspense account.
Assignment
Problems on rectification.
CE Possibilities
• Assignment
• Class test.
76
UNIT ANALYSIS
Objectives Ideas/Concept Activities Materials Evaluation Hours
To get the concept
of errors, types of
errors and
locating errors
Meaning of errors, Types
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.
Seminar. Text book,
Reference books
Prepared notes.
Seminar report
05
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
77
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 Dilu’s a/c.
c. Rent paid Rs.520 debited to landlord’s 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.
78
UNIT –2 COST ACCOUNTING
2.1 Material
2.2 Labour
2.3 Overheads
79
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 profitability of organization. Efficient
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 ledger
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 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.
• To analyse the concept of material control, its needs and different
techniques of material control through reading materials, group discussion
and present notes.
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 issue-
FIFO, LIFO, and Weighted Average Pricing method- Material control-ABC
analysis -Perpetual Inventory Control.
80
Through the chapter............. (25 hrs)
For convenience this chapter is divided into
1. Storage of materials and stores records......... (3hrs)
2. EOQ and stock levels........................……… (7hrs)
3. Pricing of material issues…………. ……… (12 hrs)
4. Material control..............…………………. (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 won’t 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.
81
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
• 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?
•
Activity : 1
Hint 8000/ a B/2 c x 2.50 a x 100 d+c No. of orders
Qty. to be ordered
Average stock
Cost of carrying average stock
Ordering cost Total cost
(a) (b) (c) (d) (e) (f)
2 4,000 2,000 5,000 200 5,200
5 1,600 800 2,000 500 2,500
8 1,000 ? ? ? 2,050
10 800 ? ? ? 2,000
16 500 250 625 ? 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
82
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?
Hint: Normal consumption = 60 100 = 80 units
2+
What is the normal Re-order Period? 6+8
Hint = 7 days2
.
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
83
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 : 50 units per week each
Minimum usage : 25 units per week each.
Maximum usage : 75 units per week each.
Re order quantity : 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
84
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 contains 700 kgs @Rs. 15/- each
Lead points
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.
85
• 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
Activity 1
AB Ltd has purchased and issued the materials in the following order.
1-1-2000 Purchases 600 units@ Rs. 3 per unit
6-1-2000 Issued 500 units
8-1-2000 Purchases 600 units @ Rs. 4 per unit
10-1-2000 Purchase 700 units @ Rs. 4 per unit
15-1-2000 Issued 800 units.
20-1-2000 Purchase 300 units @ Rs. 5 per unit.
25-1-2000 Issued 100 units.
31-1-2000 Purchase 200 units @ Rs. 5 per unit.
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 Opening balance – 50 units @ Rs. 3 per unit.
5 Issued – 20 units
7 Purchased – 50 units @ Rs. 4 per unit.
9 Issued 25 units
19 Purchased 70 units @ Rs. 3 per unit
25 Purchased 30 units
27 Issued 20 units
30 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.
86
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
Expected out come
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.
87
3. Problems on EOQ and stock levels.
4. Ask the learners to prepare chart on
advantages and disadvantages of FIFO and
LIFO
5. Problems on FIFO, LIFO and WAP
CE possibilities
• Assignment
• Class test.
88
UNIT ANALYSIS
Objectives Ideas/Concept Activities Materials Evaluation Hours To get the concept of store keeper and his duties and stores records.
Store keeper and his duties, Bin, Bin Card , Stores ledger, Difference between Bin Card and Stores ledger
Group discussion, Demonstration
Text book, Specimen
Acquired concept. Prepared notes.
03
To get the concept of Economic Order Quantity, Stock levels and calculation of E.O.Q and different stock levels
E.O.Q, Calculation of EOQ, Stock levels- Minimum Level, Maximum Level, Re-order Level, Average Stock level, Danger Level, Calculation of various stock levels.
Group discussion, problem solving
Text book, Specimen
Acquired concept. Prepared notes .Solved problems
07
To get the concept of pricing of material issues and problem solving
Material pricing- First In First Out, Last In First Out, Weighted average pricing method. Problems based on FIFO, LIFO and weighted average method
Group discussion, problem solving.
Text books, Hand outs.
Prepared notes .Solved problems
12
To get the concept of material control
Material control, ABC analysis, Perpetual inventory system.
General discussion Text book Prepared notes 03
89
Terminal Evaluation Questions 1. X Ltd., provides you the following details of their purchase
Annual requirement - 6000 unit
Ordering cost - Rs.15 per order.
Cost per unit - 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 Particulars Units Amount (Rs)
01-01-06 Received 100 20
02-01-06 Issued 60
03-01-06 Received 50 22
04-01-06 Issued 50
05-01-06 Received 60 24
06-01-06 Issued 50
Mr.Ram Gopal is the newly appointed storekeeper. Help him to
issue the materials at a suitable pricing method
90
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 Rowan plan
through problem solving, assignment etc.
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
91
, 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 (2 Hrs )
b. Time recording and its needs (6 Hrs )
c. Wage payment system (5 Hrs)
d. Incentive wage plans (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, recruitment, placement and training are the main areas.
92
• 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?
• .
•
93
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 – 48 Hrs.
Rate per hour - ?
Total Wages - ?
• How much Shyam earned
• Hint : Number of A4 sheet typed - 250..
•
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.
94
Lead Points
• If Ram worked for 54 hours, what would be his remuneration?
• How will you arrived on it?
Activity
• 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 ?
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 worker’s 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
95
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 will facilitate the
debate.
The debate may be concluded by the moderator. The teacher can
make observation and comments along with suggestion. Each learner
should present a report
Expected outcome: Debate Report,
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.
96
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 saved ?
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 are 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
97
• 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 per hour Rs. 25. Calculate the earnings
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
98
UNIT ANALYSIS
Objectives Ideas/Concepts Activities Materials Evaluation Hours To get the concept of personnel department, functions of personnel department. Labour turn over.
Personnel department, Functions of personnel department, Employee history card. Labour Turnover, Causes of LTO
General discussion
Text book Prepared notes. Record
02
To get the concept of time recording various method of time recording, Idle time, Idle time Card, Overtime
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.
General discussion, Field visit.
Text book, Collection from nearby industrial units
Prepared notes 06
To get the concept of systems of wages payment and calculation under time rate system and Piece rate system.
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.
Group discussion, Debate
Text book, Reference Book.
Prepared notes, Debate report
05
To get the concept of
Incentive wage plans. Halsey Premium Plan and
Group discussion , Problem solving
Text Book Prepared Notes Solved
07
99
Incentive wage plans and calculation of wages under Halsey and Rowan plan
Rowan Plan- Problems based on Halsey and Rowan Plans
Problems.
100
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 Hours Worked
Arun Bose
Monday 10 10
Tuesday 12 10
Wednesday 12 12
Thursday 12 10
Friday 12 11
Saturday 10 8
Total 68 Hrs. 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?
101
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
102
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 (4 hrs)
b. Primary distribution (5 hrs)
c. Secondary distribution (5 hrs)
d. Absorption of Overheads (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.
103
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 P2-75 Hours P3-50 Hours
S1-10 Hours S2 15 Hour
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
Item of Overhead Basis of Apportionment Rent Floor Area Supervision Number of workers Power ? Lighting ? Depreciation ?
Activity 2
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: (Rs)
Rent 10,000
Depreciation on Plant 4,500
104
Supervisory Expenses 15,000
Power 9,000
Repairs to plant 6,000
Lighting Expenses 1,000
Fire Insurance on Stocks 5,000
Employer’s Liability for
Employees Insurance 1,500
The following information is available in respect of the four departments.
Particulars Dept. A Dept.B Dept.C Dept.X
Area in Sq.M 1500 1100 900 500
Light Points 15 11 9 5
Number of Employees 200 150 100 50
Total Wages 60,000 40,000 30,000 20,000
Value of Plant 2,40,000 1,80,000 1,20,000 60,000
Value of Stock 1,50,000 90,000 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.
Expected outcome
• Notes of Overhead accounting
• Problems on primary distribution.
105
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 to production
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
Particulars Total A B C D E
Rent
Electricity
Fire Insurance
Plant depreciation
Transport
Estimate working hours
1000
200
400
4000
400
-
200
50
80
1000
50
1000
400
80
160
1500
50
2500
150
30
60
1000
50
1800
150
20
60
300
100
100
20
40
200
150
Expenses of the service department D and E are apportioned under
Departments A B C D E
D 30% 40% 20% - 10%
E 10% 20% 50% 20%
106
The discussion may be consolidated on
• Secondary distribution
• Different methods of re -distribution of Overheads
• Non-reciprocal and Reciprocal methods
Expected out come
Notes on secondary distribution and methods solved problems.
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?
Case:
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=?
• If yes, can you find out the total overheads attributed to a particular unit.
• .
•
•
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 :
107
Per annum
Rent of the department
(Space occupied by machine
1/5 of the department 7800
Lighting of the department 2400
Insurance of the Machine 360
Cotton waste oil 600
Salary of Foreman
(1/4 of the Foreman’s time is
occupied by this machine 60,000
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 consolidated on
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.
108
Malavika Enterprises Trial Balance as on 30-8-05
Particulars Debit Credit Bad debts 1000 Bank Loan 75000 Book debts 80770 Capital 350000 Cash in hand 15000 Commission received 1050 Depreciation machinery 25000 Depreciation Office furniture 3800 Discount 750 Drawings 25000 Employees insurance 2100 Factory repairs and maintenance 2700 Furniture 35000 Indirect wages 8000 Insurance of machinery 1500 Insurance-office 750 Interest on investments 250 Interest on loan 800 Investments 50000 Lighting 1500 Machinery 250000 Materials 150000 Motive power 10000 Office salaries 12000 Opening stock of materials 15000 Rent rates factory 2250 Rent rates office 1200 Sales 335000 Stores overhead 6800 Supervisors salary 4500 Traveling expenses 630 Wages 60000 Sundry creditors 20250 Welfare of staff-factory 3000 Welfare of staff-office 2500
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Welfare of staff selling and distribution 1000 Work managers salary 9000 Total 781550 781550
Closing stock valued at Rs. 11,250
Additional Information.
Production Department
Service
Department
P1 P2 P3 S1 S2
Direct Wages 20,000 22,000 18,000 - -
Electricity (KW) 125 125 125 - -
Light Points 25 20 15 10 5
Number of MRN 8 10 10 6 4
Value of machinery 50,000 1,20,000 80,000
Floor Area (Sq-M) 300 350 400 250 200
Number of workers 10 16 12 4 4
Indirect wages 2,000 2,2000 1,800 1000 1000
Machine hours
worked
750 1000 500
On a detailed study it is revealed that the expenses of service departments S1
and S2 are distributed as follows.
Service Depts Production Depts Service Depts
P1 P2 P3 S1 S2
S1 20 30 40 - 10 S2 40 20 30 10 -
110
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
111
UNIT ANALYSIS
Objectives Ideas/Concept Activities Materials Evaluation Hours To get an idea about overheads & classification of overheads
Meaning of overheads, Classification of over heads – Element wise – Function wise – Behavioral wise
Group discussion, Seminar
Text book, Published materials
Seminar report, Vocational Diary
04
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.
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.
Group discussion, Problem solving , Project
Text Books, Hand- outs
Prepared notes, Table of difference, Solved problems, Vocational Diary
05
To get the concept of secondary distribution. Secondary distribution summary and problems based on secondary distribution and Direct Labour Hour Rate.
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
112
Objectives Ideas/Concept Activities Materials Evaluation Hours To get the concept of absorption of overheads, methods of absorption and problems based on Machine hour rate and Direct Labour hour Rate.
Meaning of absorption of overheads, methods of absorption and problems based on Machine hour rate and Direct Labour hour Rate.
General discussion, Group discussion and problem solving
Text book Prepared Notes, Solved problems.
06
113
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 Dept 2
Factory overheads 40000 120000
Direct Labour hours 10000 40000
Machine hours 20000 -------
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
Overheads Classification basis Fixed overhead Behaviour wise Classification Selling overhead ? Variable ovehead ? Indirect Labour ? Production overhead ?
114
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.
115
UNIT - 3
AUDITING
3.1 Conduct of Audit 3.2 Audit Report
116
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.
Curriculum 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 ……………. 4 Hrs.
b. Procedure of Audit…………………… 2 Hrs
c. Procedure of Audit – interview and project.. 9 Hrs
A. Preparation before Audit ……………. 4 Hrs. Suggested Strategy : General discussion and case study.
For acquiring the concept of preparation before audit, a discussion may be
initiated by citing a case study.
117
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
Cashier Room Booking
Route Mapping
Cultural activities
Discipline
Binu and Raju
Shyam Krishnan Sankar and Rahim
Sudha and Joseph
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
• Instructions
• Preparation by the auditor.
From the above discussion the learners will acquire the concepts of
preparation by the auditor before the commencement of audit.
118
Expected Outcome 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 ……………………………………….. 3 Hrs.
Session 3 : Project…………………………………………… 6 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.
119
The discussion may be concluded by consolidating on
• Vouching
• Essentials of voucher.
Expected Outcome
Notes on Voucher, Types of voucher, Vouching and essentials of vouchers.
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.
• 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.
•
The learners are expected to attain relevant information about the topic of
interview.
120
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
121
UNIT ANALYSIS
Objectives Ideas/Concept Activities Materials Evaluation Hours
To get the
concept of
preparation
before
commencement
of audit
Preparation made by the
auditor before the
commencement of audit
work, Audit programme
General discussion,
Case study
Text book,
Hand outs
Prepared
notes.
04
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
122
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?
123
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 and types of audit
report.
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.. (5 Hours)
Audit Report
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.
124
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 doesn’t satisfy any of the content, how will you call it?
• If a report doesn’t 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.
125
Assignment
Chart on difference between audit report and audit certificate.
CE Possiblities
• Class test
126
UNIT ANALYSIS
Objectives Ideas/Concept Activities Materials Evaluation Hours
To get an idea
about Audit
report and types
of audit report,
Disclaimer of
opinion and
Audit
Certificate.
Audit Report, types of
audit report,
Unqualified report,
Qualified report,
Negative report,
Disclaimer of opinion,
Audit certificate,
Difference between
audit report and
certificate.
General discussion,
Demonstration,
Project
Text book,
Audit report
collected from
school Co-
operative
societies, Bank
etc.
Prepared
notes, Project
report, Chart,
Vocational
Diary
05
127
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 Types of report If you have noticed some points which are answered negatively ?
If you are fully satisfied with the contents of the books of accounts Clean report
If you are not at all satisfied with the contents of books of accounts ?
128
UNIT – 4
TAXATION
129
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.
Curriculum 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 (2 Hrs)
b. Previous year, Asse ssment year, Gross Total Income (3 Hrs)
c. Person, Assessed (2 Hrs)
d. Income, Total Income and exempted income (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?
130
• 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 (3 hrs.) Suggested Strategy: Case study, General discussion.
Mr. Nelson has earned the following income for the financial year 2005
which has ended on 31-03-2005.
Salary Rs.1,20,000
Income from business Rs. 60,000
Interest on deposit Rs. 20,000
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
131
Previous Year Assessment Year
01-04-2003 - 31-03-2004 2004 – 2005
01-10-2004 - 31-03-2005 ?
01-08-2005 – 31-03-2006 ?
Expected Outcome
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 Status
Mr.Raja Ratnam Individual
Kerala University ?
Travancore Titanium Products Ltd ?
Mr & Mrs.Ranga Nayakam ?
(Married under Hindu Marriage Act)
Mr.Shankar & Mr.Shanmughan ?
(Partners in a partnership firm )
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
132
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 (3 Hrs) Suggested strategy: General discussion and case study
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.
• 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
•
The discussion may concluded and consolidated on
• Income
• Total income
• Exempted incomes
Expected outcome
Notes on Total income, Income and exempted income.
Assignment
Prepare list of Incomes exempt from tax.
C E Possibilities :
Assignment.
Class Test.
133
UNIT ANALYSIS
Objectives Ideas/Concept Activities Materials Evaluation Hours
To get the concept of Income Tax Act, 1961
Income Tax Act, 1961, Finance Act, Income Tax Rules
General discussion, Group discussion
Text book Prepared notes, Partic ipation in discussion
02
To get the meaning of Previous Year, Assessment year, Gross Total Income
Previous Year, Assessment year, Gross Total Income
Case Study, General Discussion
Hand Outs, Text Book
Prepared notes, Participation in discussion
03
To get the meaning of Person, Assessee
Person, Assessee General Discussion Text Book Prepared notes, Participation in discussion
02
To get the meaning of Income, Total Income and exempted Income
Income, Total Income and exempted Income
General Discussion, Case Study
Text Book, Hand-outs
Prepared notes, Participation in discussion
03
134
Terminal Evaluation Questions
1. Complete the chart
Previous Year Assessment Year 01-04-2004 - 31-03-2005 2005-2006
? 2006 – 2007 10-10-2003 – 31-03-2004 ?
2. Match the following
Sl.No Status Cases 1 Individual A and B , partners entered into
partnership. 2 HUF Cochin Corporation 3 Company Kartha 4 Firm University of Kerala 5 Local Authority Mrs.Santha 6. Artificial juridical persons 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
135
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)
b. Heads of Income and computation of tax………. (5 Hrs)
A. Residence and Tax liability…………………….. (5 Hrs) Suggested Strategy: General discussion and interview with an expert.
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
136
• 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 (5 hrs) Suggested Strategy: General discussion and case study
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
• 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?
•
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
137
Expected Outcome :
Notes on Heads of Income, Tax rates.
Assignment
Chart showing residential status of an individual
C E Possibilies
Assignment
Class Test
138
UNIT ANALYSIS
Objectives Ideas/Concept Activities Materials Evaluation Hours
To get the
concept of
Residential
Status, Tax
liability,
Determination
of Residential
status
Basic Conditions,
Additional conditions
for determination of
residential status of
individual.
General discussion,
Interview
Text book Prepared
notes,
Participation in
discussion,
Interview
report ,
Vocational
diary
05
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
Prepared
notes,
Participation in
discussion
05
139
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.
140
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)
This chapter contains:
a. Procedure of assessement and types of return………….. (5 Hrs)
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?
141
• 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
• How the department makes assessment?
• Is it possible to compute tax by the Assessee himself?
• If yes how will you call it?
• .
•
Lead points may be asked to get 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, Re-
assessment Precautionary Assessment and Best judgment Assessment.
Assignment
Collect various forms like PAN, Naya Saral etc and fill up and exhibit in
record.
142
C E Possibilities
Assignement
Class Test.
143
UNIT ANALYSIS
Objectives Ideas/Concept Activities Materials Evaluation Hours
To get the
concept of
procedure of
Assessment
and types of
returns
Procedure of
Assessment ,
Voluntary Return,
Obligatory return,
Return of loss,
Defective return,
Revised return.
General discussion,
Group discussion
Text book Prepared
notes,
Participation in
discussion.
05
To get the
concept of
various types of
assessment.
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
144
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?
145
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
146
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.
147
Appendix –2 Reference Books Financial Accounting. Advanced Accountancy - R.L. Guptha and M. Radha Swamy. Advanced Accountancy - S.P. Jain and Narang Advanced Accounts - M.C. Shukla and T.S. Grawal Advanced Accountancy (Vol.1) - Arulananthm and Raman Advanced Accountancy (Vol.1) - S.N. Maheswary Cost Accounting Cost Accounting - Jain and Naranj Cost Accounting - V.K. Saxena and C.D. Vashist Cost Accounting - S.P. Ayyengar Principles and Practices of Cost Accounting - Bhatacharya. Theory and Techniques of Cost Accounting - B.M Lal Nigam and G.L.Sharma. Auditing Practical Auditing - B.N Tandon. Practical Auditing - Spicer and Peglar. Auditing - Dr.T.S. Sharma. Principles and Practices of Auditing - R.G.Saxena. Auditing Principles, Practices and Problems - Jagadish Prakash. Taxation Income Tax Law and Practice - V.P.Gaur and Naranj Income Tax Law and Practice - Dr.H.C.Mehrotra and S.P Goyal Garg’s Income Tax Rules Kerala Value Added Sales Tax Act.
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