Friday, July 19, 2013

ICMAI - Intermediate Syllabus - Paper 5: Financial Accounting

Section A: Generally Accepted Accounting Principles & Accounting Systems [10 marks]
1. Accounting Process
(a) Theoretical framework ( meaning, scope and usefulness of Accounting; Accounting principles, concepts and convention)
(b) Accounting Life Cycle (ALC) – From Investment of Capital (Cash) to Realization of Revenue (Cash)
(c) Capital and Revenue transactions- capital and revenue expenditures, capital and revenue receipts
(d) Measurement, valuation and accounting estimates Double entry system, books of prime entry, subsidiary books, cash book, ledgers, trial balance
(e) Rectification of errors, opening entries, transfer entries, adjustment entries, closing entries
2. Accounting Standards
(a) AS-1: Disclosure of Accounting Policies
(b) AS-2: Valuation of Inventories
(c) AS-4: Contingencies and Events Occurring after the Balance Sheet Date
(d) AS-5: Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies
(e) AS-10: Accounting for Fixed Assets
(f) AS-11: The Effects of Changes in Foreign Exchange Rates
(g) AS- 15: Employee Benefits
(h) AS-16: Borrowing Costs
3. Reconciliation Statements
(a) Bank Reconciliation Statements
(b) Stock Reconciliation Statements
(c) Receivables /Payables Reconciliation Statement

Section B: Preparation of Accounts [30 marks]
4. Accounting for Depreciation, Depletion, Amortization and Impairment of Assets
(a) Depreciation Policy, Depletion, Amortization and Impairment of Assets
(b) Depreciation Accounting (AS – 6) ; Impairment of Assets (AS -28)
(c) Methods, computation and accounting treatment
5. Preparation of Financial statements :
(a) Of Profit-making organizations:
(i) Preparation of Profit & Loss Account and Balance Sheet
(ii) Preparation of Cash Flow Statement (AS – 3)
(iii) Accounting treatment of bad debts, reserve for bad and doubtful debts, provision for discount on debtors and provision for discount on creditors
(b) Of Not-for-Profit organizations :
(i) Preparation of Receipts and Payments Account
(ii) Preparation of Income and Expenditure Account
(iii) Balance Sheet
(c) Under single entry system including conversion of single entry into double entry system :
(i) Concept of single entry system, conversion of single entry system into double entry system of accounting
(ii) Application of accounting ratios for preparation of accounts under single entry system
6. Partnership
(a) Past adjustments and guarantee, profit & loss appropriation account
(b) Admission, Retirement, Death, Treatment of Joint Life Policy
(c) Dissolution of partnership firms including piece meal distribution
(d) Amalgamation of partnership firms, Conversion of partnership firm into a company and sale of partnership firm to a company
7. Royalty and Hire Purchase
(a) Accounting from the point of view of various parties
(b) Possession and repossession in case of default in payments
8. Branch and Departmental Accounts
(a) Branch Accounts-Debtors system, Stock & Debtors system, Foreign Branch
(b) Departmental Accounts: Trading Account; Profit & Loss Account
(c) Calculation of net profit of various departments and allocation of expenses on the basis of suitable base, treatment of shortages, treatment of unrealized profit
(d) Preparation of General Profit & Loss Account and Balance Sheet

Section C : Control of Accounting Systems [10 marks]
9. Self-Balancing Ledger and Sectional Balancing Ledgers
(a) Self- Balancing Ledgers
(b) Sectional Balancing Ledgers

Section D: Accounting in Service Sector [10 marks]
10. Accounting for Service Sectors
(a) Revenue Recognition (AS-9)
(b) Construction Companies (AS 7), Project Accounting
(c) Service sectors such as Software, ITES, Telecommunication, Entertainment, Hospital, Educational Institutions

Section E: Accounting for Special Transactions [20 marks]
11. Accounting for Special Transactions
(a) Bills of Exchange, Consignment, Joint venture, Sale of goods on approval or return basis, Account Current
(b) Investment Accounts (AS – 2, 13)
(c) Insurance Claim ( Loss of Stock and Loss of profit)

Section F: Accounting for Banking, Insurance and Electricity Companies [20 marks]
12. Banking , Electricity and Insurance companies
(a) Accounts of a Banking Company ( as per Banking Companies Regulation Act )
(b) Accounts of an Electricity Company ( as per Electricity Act)

(c) Accounts of Insurance Companies ( as per Insurance Act ) including Stock Valuation