AccountancyWhat Class 12 adds
Class 11 dealt with one owner. Class 12 asks what changes when ownership is shared. In a partnership, profit has to be divided, and every change in the partners (a new one joining, an old one leaving, the firm closing) means settling accounts between them fairly. In a company, ownership is divided into shares held by many people who never meet, and the law lays down how capital is raised and how the accounts are presented. The last part of the year turns from preparing accounts to reading them: ratios, comparative statements and the cash flow statement.
The partnership pages should be read in order, because each builds on the one before. Fundamentals gives the appropriation account and capital accounts. Goodwill gives the valuation methods. Change in ratio introduces the three adjustments (goodwill, reserves, revaluation) that then repeat on admission and retirement or death. Dissolution stands slightly apart: there the business ends, and the Realisation Account replaces the Revaluation Account.
The one idea behind reconstitution
Whenever the agreement between partners changes, everything earned or accumulated up to that day belongs to the old partners in the old ratio. That single sentence explains why reserves are distributed in the old ratio, why revaluation profit goes in the old ratio, and why the partner who gains a share pays goodwill to the partner who gives it up. If you can say that sentence and apply it, most questions on admission and retirement become mechanical.
Company accounts and analysis
For shares and debentures the entries follow the stages of collecting money: application, allotment, calls. Learn one full example by heart, including forfeiture and reissue, and vary it. For the analysis chapters, learn the Schedule III headings first; ratios and cash flow statements are easy to get wrong simply by placing an item under the wrong head. All formulas are gathered on the formula sheet.
How to revise
- Keep a one-page list of formats: appropriation account, revaluation account, realisation account, cash flow statement.
- Redo each solved example on this site on paper without looking, then check.
- Time yourself: a full admission or cash flow question should fit within the minutes your paper allows for its marks.
- Check every balance sheet you prepare: if it does not agree, find the error instead of forcing it.
For study, and independent. These pages explain accountancy as it is generally taught in Class 11, Class 12 and B.Com courses in India, in our own words with our own examples, reviewed in November 2026. This site is not connected with NCERT, CBSE, ICAI or any board or university. Syllabuses change: follow your own board's or university's current syllabus and textbook. Nothing here is professional accounting, tax or legal advice.