Toppers Strategy for CA Foundation Accountancy | Topic wise details are covered

 

CA Foundation is the entry-level examination to the course and at the foundation level you will be tested for 4 papers namely,

• Principles and Practice of Accounting
• Business Laws and Business Correspondence and Reporting
• Business Mathematics, Logical Reasoning and Statistics
• Business Economics and Business and Commercial Knowledge

It is crucial to have a deep understanding of the subject and the ability to think beyond the ambit of modules given by the institute.

Along with preparation, a robust strategy is necessary to easily qualify for the examination. Through this blog, we make efforts to help you craft a strategy for your preparation and examination. 

 

 

Principles and Practice of Accounting is not just 1st paper in CA Foundation for the 1st one for the whole CA journey.

Charted accountants are known for their proficiency in accounting and if you are a charted accountancy student it is vital to ponder over the accounting concepts and implement them in practical situations. 80-95% of the examination questions are going to be the application of the concepts you have learned during your foundation course.

If you are a commerce student, you would be learning accountancy since your class 11 but the difficulty level in foundation level will be very much higher when compared to class 11&12th accountancy. So, it is important to revise and practice the concepts and problems as much as you can so that you can be confident about the exam.

On other hand, if you are from non-commerce background or learning accountancy for the first time you should be more cautious and put more effort into the preparation and ensure that you understand all concepts and able to solve them without any impasse.

 

 

It is very important to get yourself familiar with the topics you must learn and what the institute expects you to learn from that topic. You can get this information by reading the initial pages and preface of the modules.

At the foundation level there are 10 chapters:

 

Module - 1
Chapter 1	Theoretical Framework
Chapter 2	Accounting Process
Chapter 3	Bank Reconciliation Statement
Chapter 4	Inventories
Chapter 5	Concept and Accounting of Depreciation
Chapter 6	Accounting for Special Transactions
Module - 2
Chapter 7	Preparation of Final Accounts in case of Sole Proprietors
Chapter 8	Partnership Accounts
Chapter 9	Financial Statements of Not-for-Profit Organizations
Chapter 10	Company Accounts

 

Each of the above-mentioned chapters is very critical for understanding the accounting systems in an organization.

 

 

Chapter – 1: Theoretical Framework

 

• This is a theory chapter that deals into defining the terms “Accounting”, “Accountancy” and its scope. Also explains the jargons used in accounting.
• This chapter also discussed accounting concepts, policies, principles, and conventions.
• This chapter also examines the difference between:

1. Capital and revenue expenditure
2. Capital and revenue receipts
3. Contingent assets and contingent liabilities

• This chapter briefly discusses the valuation principles of accounting and how accounting estimates are calculated following the prescribed accounting standards or Indian accounting standards.
• A brief introduction to accounting standards and Indian accounting standards will be provided.

 

Chapter – 2: Accounting Process

 

• This chapter expound entire accounting process from the occurrence of the transaction or event to preparation of the trial balance and rectifying them
• The basic accounting process begins with recoding journal entries to the occurred transaction or event.
• Once the entries are journalized then the posting will be done in the respective ledgers.
• Finally, after preparation of the ledgers the trial balance is prepared using the ledger balances. Using this trial balance, the final accounts are prepared.
• This chapter takes you through the process of journalizing to preparation of trail balance.
• Additional preparation of subsidiary books like purchases, sales, purchase returns, bills payable, bills receivable and journal proper book is also discussed in the chapter.
• Also, preparation of cash books is also discussed which involves preparation of simple cash book, two column cash book and three column cash books.
• Finally, the chapter ends with discussion about rectifying the errors committed in the books which will be done at three levels:

1. Before preparation of trial balance
2. After preparation after preparation of trial balance but before preparation of final accounts
3. After preparation of final accounts in next accounting period.

 

Chapter – 3: Bank Reconciliation Statement

 

This chapter talks about the bank reconciliation statement. Which includes Introduction to bank reconciliation statement, reasons for preparation of bank reconciliation statement and finally the preparation of bank reconciliation statements.

 

Chapter – 4: Inventories

 

• This chapter discusses about the valuation of the inventory as per accounting standard - 2(AS - 2).
• It also discusses the use of different techniques to value inventory.
• And finally, it ends with record keeping methods of inventory.

 

Chapter – 5: Concept and Accounting of Depreciation

 

• This chapter examines about depreciation on assets, reasons for providing depreciation.
• it alsoenumerates different concepts relating to depreciation and different methods for computation of depreciation
• It also so discusses the accounting treatment for depreciation in books of accounts.
• It finally concludes the accounting treatment in books of accounts when there is a change in method of depreciation.

 

Chapter – 6: Accounting for Special Transactions

 

• This chapter discusses accounting treatment for various special transactions in books of accounts. The special transactionsinclude accounting for bills of exchange and promissory notes, accounting treatment for goods sent on approval or return basis, accounting treatment when the organization is involved in consignment business.
  • it also discusses various additional topics like average due date and account current.
• In the area of accounting for bills of exchange and promissory note the topics discussed will be meaning of bills of exchange and promissory notes and their accounting treatment andit also discusses accounting treatment for a very special transaction called as accommodation of bills.
• In the area of sale of goods on approval or return basisthe accounting treatment for sale in this special transaction will be discussed
• In consignment difference between sale and consignment, accounting treatment for consignment will be discussed
• In average due date explanation for calculation ofaverage due dateWill be enumeratedand discuss is the calculationoff average due date various situations
• In account current the meaning of account current and methods for preparation of account current will be discussed

 

Chapter – 7: Preparation of Final Accounts in case of Sole Proprietors

 

• This chapter deals with preparation of manufacturing account, trading accounts, profit and loss account and balance sheets of the sole proprietor organizations.
• It also discusses various elements of financial statements and the closing adjustment entries passed before preparation of financial statements.

 

Chapter – 8: Partnership Accounts

 

• This chapter deals with preparation of trading accounts, profit and loss account and balance sheet of partnership firms.
• It also discusses various scenarios like admission, retirement and death of the partner and accounting treatment in those scenarios.
• It talks about computation and treatment of goodwill in books of accounts
• This chapter ends with introduction to limited liability partnerships and distinguishes between a partnership and limited liability partnership.

 

Chapter – 9: Financial Statements of Not-for-Profit Organizations

 

• This chapter deals with preparation of receipts and payments account, income and expenditure account and balance sheet of not-for-profit organization.
• It also discusses various elements involved in the preparation of financial statements like subscription fee, donations etc. and their accounting treatment

 

Chapter – 10: Company Accounts

 

• This chapter opensby defining shares and debentures and explain the provisions relating to it in Companies Act 2013
• It also discusses about the accounting treatment when shares and debentures are issued, forfeiture of shares and reissue of forfeited shares.
• It finally ends with preparation of statement of profit and loss, balance sheet as per schedule three of the companies Act, 2013

 

 

The only way anyone can master accounting is by mere practice. So, it is very important for students to get a depth understanding of the topics covered in institutes study modules.

Once you practice all the questions given in your modules you can start testing yourself by doing revision test papers (RTPs) and model test papers (MTPs) which are hosted on the institutes website along with the answers. (For URLs, please refer to Annexure 1)

Finally, at least one month before the exam you should solve all previous question papers to test yourself for the final time and to gain confidence in your preparation.

I would also suggest making self-prepared notes for your future reference as it has been prepared by yourself you can grasp the whole topic just in seconds when you refer to the notes later, especially at the time of exams.

One last suggestion would be to make a timetable so that you will be able to set deadlines and track the progress of your study but do not waste so much time preparing the timetables.

 

All the very best.