COMMERCE AND ACCOUNTANCY
PAPER – I
Accounting and Finance
Accounting, Taxation & Auditing
1. Financial Accounting:
Accounting as a Financial
Information System; Impact of Behavioural Sciences. Accounting Standards e.g., Accounting
for Depreciation, Inventories, Research and Development Costs, Long-term
Construction Contracts, Revenue Recognition, Fixed Assets, Contingencies,
Foreign Exchange Transactions, Investments and Government Grants, Cash Flow
Statement, Earnings Per Share.
Accounting for Share Capital
Transactions including Bonus Shares, Right Shares, Employees Stock Option and
Buy- Back of Securities.
Preparation and Presentation of
Company Final Accounts.
Amalgamation, Absorption and
Reconstruction of Companies.
2. Cost Accounting:
Nature and Functions of Cost
Accounting. Installation of Cost Accounting System. Cost Concepts related to Income
Measurement, Profit Planning, Cost Control and Decision Making.
Methods of Costing: Job Costing,
Process Costing, Activity Based Costing.
Volume – cost – Profit Relationship
as a tool of Profit Planning.
Incremental Analysis/ Differential
Costing as a Tool of Pricing Decisions, Product Decisions, Make or Buy Decisions,
Shut-Down Decisions etc.
Techniques of Cost Control and Cost
Reduction: Budgeting as a Tool of Planning and Control. Standard Costing and
Variance Analysis.
Responsibility Accounting and
Divisional Performance Measurement.
3. Taxation:
Income Tax: Definitions; Basis of
Charge; Incomes which do not form Part of Total Income. Simple problems of
Computation of Income (of Individuals only) under Various Heads, i.e., Salaries,
Income from House Property, Profits and Gains from Business or Profession,
Capital Gains, Income from other sources, Income of other Persons included in
Assessee’s Total Income.
Set - Off and Carry Forward of Loss.
Deductions from Gross Total Income.
Salient Features/Provisions Related to VAT and Services Tax.
4. Auditing:
Company Audit: Audit related to
Divisible Profits, Dividends, Special investigations, Tax audit. Audit of
Banking, Insurance, Non-Profit Organizations and Charitable Societies/Trusts/Organizations.
Financial Management, Financial
Institutions and Markets
1. Financial Management:
Finance Function: Nature, Scope and
Objectives of Financial Management: Risk and Return Relationship.
Tools of Financial Analysis: Ratio
Analysis, Funds-Flow and Cash-Flow Statement.
Capital Budgeting Decisions:
Process, Procedures and Appraisal Methods. Risk and Uncertainty Analysis and Methods.
Cost of capital: Concept,
Computation of Specific Costs and Weighted Average Cost of Capital. CAPM as a Tool
of Determining Cost of Equity Capital.
Financing Decisions: Theories of
Capital Structure - Net Income (NI) Approach, Net Operating Income (NOI) Approach,
MM Approach and Traditional Approach. Designing of Capital structure: Types of
Leverages (Operating, Financial and Combined), EBIT- EPS Analysis, and other
Factors.
Dividend Decisions and Valuation of
Firm: Walter’s Model, MM Thesis, Gordan’s Model Lintner’s Model.
Factors Affecting Dividend Policy.
Working Capital Management: Planning
of Working Capital. Determinants of Working Capital. Components of Working
Capital Cash, Inventory and Receivables.
Corporate Restructuring with focus
on Mergers and Acquisitions (Financial aspects only).
2. Financial Markets and
Institutions:
Indian Financial System: An Overview
Money Markets: Participants, Structure and Instruments. Commercial Banks.
Reforms in Banking sector. Monetary and Credit Policy of RBI. RBI as a
Regulator.
Capital Market: Primary and
Secondary Market. Financial Market Instruments and Innovative Debt Instruments;
SEBI as a Regulator.
Financial Services: Mutual Funds,
Venture Capital, Credit Rating Agencies, Insurance and IRDA.
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