Class 12 Accountancy introduces complex corporate finance concepts that replace sole proprietorship bookkeeping.
1. Cash Flow Statement (Indirect Method)
Classify into three distinct activities:
- Operating Activities: Adjust net profit for non-cash items (depreciation, amortization) and working capital changes.
- Investing Activities: Purchase and sale of fixed assets and long-term investments.
- Financing Activities: Issue of shares, debentures, loan repayments, and dividends paid.
2. Forfeiture and Re-issue of Shares
When shares issued at premium are forfeited for non-payment of calls, debited share capital equals the called-up amount, not the face value. Unearned premium accounts must not be reversed if previously received.
