Important Legal Provisions In Accountancy Class 12
This is an easy compilation of Important Legal Provisions In Accountancy Class 12 that students often find it difficult to learn.
Partnership Accounting
Indian Partnership Act, 1932
Section 4: Definition of Partnership
Section 464 of the Companies Act 2013 - CG empowered to prescribe maximum number of partners in a firm subject to the maximum 100. Central government has actually prescribed 50.
Accounting Standard 26: Intangible Assets, Goodwill appearing in the balance sheet to be written off at the time of firm's reconstitution. Internally generated goodwill not to be recognized as an asset but adjusted by through partners’ capital accounts.
Section 30: A minor may be admitted for the benefit of partnership if all partners agree.
Section 31: A partner may be admitted either with the consent of existing partners or as per such agreement.
Section 32: A partner may retire from the firm either with the consent or such agreement among partners.
Section 69: Registration of the firm is optional and not compulsory.
Section 35: Unless otherwise agreed by the partners, death of a partner results in dissolution of firm.
Section 37: Option to outgoing partner to receive interest @ 6% p.a. or profits based on Capital Ratio, for the intervening period.
Section 39: Meaning of dissolution of the firm.
Section 48: Settlement of Accounts on Dissolution of Partnership Firm with
(a) Treatment of Losses
(b) Application of Assets
Section 49: Rules relating to Private Debts and Firm’s Debts
Accounting for Share Capital and Debentures
Companies Act, 2013
Section 43: Meaning of Preference Shares and Equity Shares
Section 42: Private Placement of Shares
Table F: Directors' authority to forfeit the shares for non-payment of amount due from shareholders.
Section 68: Rules relating to Buy Back of Shares.
Section 2(30): Meaning of Debenture.
Section 52(2): Utilization of Securities Premium and Writing off Discount or Loss on Issue of debentures.
American Institute of Certified Public Accountants (AICPA) - Nature of financial statements
Guidelines by SEBI - Minimum Subscription
Analysis of Financial Statements
Section 2 (40): Definition of Financial Statements and preparing Financial Statements as per revised Schedule III to the Companies Act, 2013, but does not apply to (i) Insurance or Banking Company, (ii) Company specified under any other Act.
Schedule III - Part I - Balance Sheet and Part II - Statement of Profit and Loss.
Accounting Standard- 4 (AS-4): Contingencies and Events Occurring after the Balance Sheet Date (Proposed dividend to be shown in the Notes to Accounts).
Accounting Standard- 3 (AS-3): For preparing Cash Flow Statement
Section 133: Accounting Standards Mandatory for True and Fair view in Financial Statements.