In CA Inter Advanced Accounting, presentation is as important as accuracy in the solution. It is not only important that the answer be accurate, but it should also be presented properly. You cannot assume that examiners will understand the steps in your solution and therefore the correct answer. If your goodwill value has no working note, or if the figures are debited and credited improperly in the journal entry, even though the final answer may be correct, you could lose marks.
About CA Vinayak Sikka
CA Vinayak Sikka’s focus lies on guiding the students in answering their advanced accounting questions in a well-structured manner. It involves making sure that one uses proper workings, makes accurate calculations, makes proper entries in the journals, and presents the answer in an easy-to-understand manner. This way, one can avoid mistakes in presentation and score better in the examination.
Read the Question and Identify the Accounting Treatment
Read the entire question before you start solving. Note down:
The requirement of the question
Adjustments and calculations needed
Dates/periods
The format in which the answer is required
After that, the accounting principle to be applied is identified. It should be applied accurately, along with its appropriate AS/Ind AS or provision, explaining the rationale behind the application of the principle.
Start With a Clear Heading
The appropriate heading is required for each section of the solution, such as:
Solution
Working Notes
Journal Entries
Statement of Profit and Loss
Balance Sheet
Calculation of Goodwill
A good heading makes the solution well-organised and easier to assess.
State the Accounting Principle Where Required
When appropriate, state the accounting principle or standard first, before stating the accounting treatment.
Explanation
Brief and relevant
Directly related to the problem posed
Concerned with the accounting treatment only
No need for extensive theory.
Example: Closing stock has a cost of ₹50,000 and a net realisable value of ₹45,000.
Principle: As per AS 2 / Ind AS 2, inventories are valued at the lower of cost and net realisable value.
Treatment: Closing stock is valued at ₹45,000. The write-down of ₹5,000 (₹50,000 – ₹45,000) is charged to the Statement of Profit and Loss.
Stating the principle first shows the examiner why you chose ₹45,000, not just what you chose.
Utilisation and Quantity of Working Notes
Working notes play an important part in advanced accounting. Conduct calculations independently rather than including them in the financial statement.
Example: Working Note 1 - Calculation of Goodwill
Particulars | Amount |
Average Profit | ₹X |
Number of Years' Purchase | X |
Goodwill | ₹X |
Carry the result forward to the appropriate account or statement. Working notes show how the calculation was made.
When there are several workings involved, number them in sequence.
Example:
Working Note 1 - Computation of Goodwill
Working Note 2 - Computation of Revised Capital of the Partners
Working Note 3 - Computation of Revaluation Gain
Working Note 4 - Computation of Revised Profit Sharing Ratio
Then the working note number may be used to refer to the main answer itself. This establishes an interconnection between the workings and the accounts.
Show Important Calculations Clearly
Never just write the final figure in case you need to do any calculation.
For instance, don’t write:
Goodwill = ₹2,00,000
Instead, do write your calculations in this way:
Goodwill = Average Profit × Number of Years' Purchase
= ₹50,000 × 4
= ₹2,00,000
This helps the examiner know the way you have arrived at that figure.
Maintain Proper Format for Journal Entries
When journal entries are mandatory, a table must be used.
Particulars | L.F. | Debit (₹) | Credit (₹) |
Relevant Account Dr. | X | ||
To Relevant Account | X |
Narration must be incorporated wherever necessary. Also, the students must see to it that:
The debit and credit figures are rightly placed.
The accounts are rightly identified.
The narration is clear.
The figures tally with the workings.
Present Ledger and Account Formats Properly
• Revaluation Account
• Realisation Account
• Partners’ Capital Accounts
• Partners’ Current Accounts
• Investment Account
• Branch Account
You have to prepare the accounts in the correct form. The headings need to indicate which account is to be prepared. Calculations must not be intermixed with the account preparation.
Use Tables for Comparative Information
Tables may be helpful when it comes to comparing multiple figures. For instance:
Particulars | Before Adjustment (₹) | Adjustment (₹) | After Adjustment (₹) |
Asset | X | X | X |
Liability | X | X | X |
Add a table only when it improves clarity. Unnecessary tables make an answer longer without making it clearer.
Show Adjustments and Their Effect on the Final Statements
Show each significant adjustment individually instead of burying it inside other calculations.
Identify the adjustment clearly.
Calculate what is needed.
Describe its treatment in accounting terms.
Show its effect in the appropriate account or statement.
An adjustment can affect more than one account. For instance, an outstanding expense appears in both the Statement of Profit and Loss and the Balance Sheet. You should therefore make sure that every adjustment is reflected in full. Follow this sequence: Adjustment ➔ Calculation ➔ Accounting Effect ➔ Statement
Maintain Consistency in Figures
Inconsistent answers are one of the most frequent mistakes made in numerical questions.
Before answering the question, make sure that:
All the figures have been transferred
The total figures agree
The debit and credit sides balance
The closing figures are accurate
Any adjustments are included
The working note figures are consistent with the main answer
An otherwise correct calculation becomes meaningless if the final figure is wrongly transferred.
Highlight the Final Answer
The final answer must be easily recognisable.
You may consider using:
Final Answer: ₹X
or
Therefore, the amount of _____ is ₹X.
For statements or accounts, the final answer must be apparent.
Do not use unnecessary decorations. The main aim is clarity.
Write a Conclusion for Conceptual Questions
Where the question requires an explanation or conclusion, end your answer with a conclusive statement. This conclusion must directly address the requirement of the question.
Conclusion: Therefore, closing stock is valued at ₹45,000, and the write-down of ₹5,000 is charged to the Statement of Profit and Loss.
Case-Based vs. Accounting Standard-Based Answer Format
The two question types need different answer structures, so check which one you are facing before you start writing.
Basis | Case-Based Question Format | Accounting Standard-Based Answer Format |
Main purpose | To solve a practical case by analysing facts and applying principles | To explain the accounting treatment required by a specific accounting standard |
Structure | Facts ➔ Relevant Principle ➔ Application ➔ Calculation ➔ Conclusion | Relevant Requirement ➔ Facts of the Case ➔ Application ➔ Accounting Treatment ➔ Conclusion |
Starting point | Starts with the facts or problem | Starts with the accounting requirement or standard |
Focus | Problem-solving and reasoning | Compliance with the prescribed accounting requirement |
Calculation | Specifically included where numerical computation is involved | Not necessarily required; included if the accounting treatment involves figures |
Accounting treatment | May be part of the application or conclusion | Has a separate step specifically explaining the treatment |
Best suited for | Practical, scenario-based, and numerical questions | Questions asking for treatment under a particular AS/Ind AS |
Example emphasis | “What should the company do in this situation?” | “What does the relevant standard require, and how should it be accounted for?” |
Frequent Presentation Errors
Head every calculation and working note
Show each step in a numbered working note
Keep workings separate and refer to them
List each adjustment and tick it off
Identify the accounts before writing the entry
Use proper T-format and align columns
Conclusion
Good presentation will make sure that all accounting reasoning, computations, adjustments, and conclusions are presented in an orderly manner. Learn how to present by practising with mock tests.
Presentation skills + frequent practice = increased accuracy and efficiency.
