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Important topics for May 2014 Exams
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IPCC Important topics For May 2014 Exams The important topics provided in this booklet are intended for quick and revision of essential topics and not recommended as substitute for full preparation Sudheer Paidi 04/14/2014
DISCLAIMER
The importants are prepared by us by analyzing the past papers and Trends followed by ICAI in framing the question papers. We strongly recommend full studying of every topic and get a basic idea of every chapter. Important topics provided here are intended to aid you in the revision process and to ensure you do not miss any important topic in your revision. We strongly recommend you that these topics are to be considered once you have completed your preparation and are ready for revision The important topics provided in this booklet are released as an add-on for your preparation and not to be referred instead of your prepration.CA Exams are unpredictable in its nature and conceptual clarity of every topic is essential before you are ready to write your exams. This booklet is intended and prepared only with a view to help you to the extent I can and if you do not believe or like it please do not follow it.The consequences of any form or kind resulting from use of this booklet are not binding by me. (Sudheer Paidi) Sources: Suggestions by my Faculty Recommendations of ICAI My Friends Suggestions Toppers Advices Revision Tips 1. Study the Revision Test Papers 2. Test your knowledge through Practice Manuals 3. Do not be afraid of what you are now, try to improve yourself at every minute. You will be new and not as what you are now. BEST OF LUCK SUDHEER PAIDI
PAPER 1 ACCOUNTING
Accounting Standards(18-20)
o AS 7,9,10,13
Company Accounts(12)
o Preparation of Financial Statements (Revised Schedule VI)
o Computation of Managerial Remuneration/Profit
Acc for Bonus issue(4-5)
Profit prior to Inc.(4-5)
Amalgamation and Internal Reconstruction(16-20)
o Computation of Purchase Consideration
o Types of amalgamations (Theory)
o Passing Journal Entries
Partnership(12-16)
o Journal entries
o Preparation of Revaluation a/c, Partners Capital a/c’s in death/retirement
o Computation of Partners share of profits/remuneration
Insurance claim on loss of stock(4-5)
o Computation of claim with average clause
Self Balancing Ledgers(4-5 Marks)
Hire Purchases (4-5)
Accounting for Investments
Acc for Incomplete records(12-16)
Cash flow Statement (Indirect Method)
ERP, Pre-Packaged Accounting Software
AMENDMENTS AT A GLANCE IN PAPER I:
Criteria for Classification of Entities and Applicability of Accounting Standards
Due to recent changes in the enhancement of tax audit limit, the Council of the ICAI has
recently decided to change the 1st criteria i.e. determination of SME on turnover basis for
Level II entities from Rs. 40 lakhs to Rs. 1 Crore with effect from the accounting year
commencing on or after April 01, 2012
Board of Studies has decided to exclude the Hire Purchase Trading Account (Debtors) Method and Stock and Debtors Method in the Paper 1: Accounting Study Material at Intermediate (IPC) level.
PAPER 2 BUSINESS LAW ETHICS & COMMUNICATIONS
PART-1 BUSINESS LAW (30 Marks)
The Indian Contract Act ,1872
o Essentials of Valid Contract
o Consideration
o Succession and Assignment
o Impossibility of Performance
o Discharge of Contract
o Agency Contract
o Quasi Contract
o Consesus ad idem
o Agreement Expressly declared as void
o Anticipatory Breach of Contract
o Liquidated damages
o Guarantee Contract
o Pledge Contract
o Indemnity Contract
The Payment of Bonus Act
o Applicability of the Act
o Definitions
o Minimum and Maximum Bonus
o Calculation of Bonus and Working Days
o Set on and Set off provisions
o Problems in Practice Manual
o Allocable Surplus
The Payment of Gratuity Act
o Applicability of the Act-Eligibility
o Computation of Gratuity-Workig Dys
o Forfeiture of gratuity
o Protection of Gratuity
o Exemptions from the applicability
o Insurance
o Dispute Settlement Process
The Employee PF Provisions
o Employee Deposit Linked Insurance Scheme
The Negotiable Instrument Act 1881
o Negotiation, Negotiability and Assignability
o Distinguish Transfer by Negotiation and transfer by Assignment
o Holder in Due course
o Notice of Dishonour not Necessary cases
o Material alterations to an instrument
o Bills of Exchange and Cheque
o Non-negotiable Crossing
o Cases of Dishonour
o Negotiable Transferred without consideration
o Incohate Instruments
PART-II THE COMPANY LAW (30 MARKS)
Lifting of Corporate Veil
Types of Companies – Definitions
Conversion of Private Company into Public Company
Doctrine of Ultravires , Doctrine of Indoor Management
Practical Question on MOA or AOA and Prospectus
Practical Question on liability of members
Pre Incorporation and Provisional Contracts
Additional disclosure in Prospectus
Responsibility for Misstatement in Prospectus- of Directors and an Expert
Shelf/Red herring Prospectus
Information Memorandum
Investment by company
Minimum Subscription
Irregular Allotment
Buy-Back of Shares povisions
Distinguish Member and shareholder
Practical question on Voting rights / Meetings
Alteration of Object Clause
Procedure of Transfer/Transmission of share
Distinguish Shares and Debentures – Vote rights
Registration of Charge
AGM Provisions
Special Resolution cases
Notice of Meeting – Practical Question
Quorrum-Practical Question
Proxy Provisions
PART-III Business Ethics (20 Marks)
Advantages of ethical behaviour
Ethical Dilemma
Need and Advantages for Ethics
Benefits of corporate governance
Need for CSR
Guidelines for ethics at workplace
Sustainable Development
Eco-friendly business practices
Healthy competition and consumer interest
Potential conflicts
Reasons for unethical behavior
Consumer protection forums
PART IV COMMUNICATIONS (20 Marks)
Interdepartmental Communication
Benefits and Barriers of effective communication
Grapevine
Checklist for composing business messages
Functions of interpersonal communication
Active Listening & Critical thinking
Team Roles
Consensus Building
Handling Group Conflicts
Significance of Ethical Communication
Resistance to change
Minutes of Meeting and Press Releases
POA , bond for loan repayable ,Lease Deed , Annual Report
Note: Concentrate more on Ethics and Communications as you can score easily and the syllabus is
limited.
Don’t waste much time on Compaies Act 2-3 revisions are enough.
PAPER III COST ACCOUNTING AND FINANCIAL MANAGEMENT
PART A – COST ACCOUNTING (50 Marks)
Basic Concepts
o Difference Between Cost control and reduction
o Objectives of Cost Accounting
o Cost Units and Cost centres , Cost objects
o Essentials of Good Costing System
Material
o Valuation methods
o EOQ-Practical Question
o Accounting Treatment of Defectives
o Stores Ledger
Labour
o Labour Turnover
o Idle Time
o Machine Hour rate calc’n
o Hasley and Emerson Methods
o Straight Piece rate
Overheads
o Treatment of under/over absorption of Overheads
o Classification of Overheads
o Reciprocal Service method
Non Integrated Accounts
o Reconciliation of cost and financial accounts
Integrated Accounts (Theory)
Job Costing and Batch Costing -Meaning and Difference
Contract Costing
o Computation of Profit in Incomplete contract
o Cost-plus contracts
Process Costing-Equ Prod’n (8-10)
Types of Variances
Marginal costing-problems (5-8)
Std costing-problem (4-8)
Operating costing (6-8)
Allocation of Joint costs –Pract.Qn
Margin of Safety
Key Factor
Zero base budgeting
PART B FINANCIAL MANAGEMENT
THEORY
Basic functions of Financial Management
Need for Financial Management in current scenario
Role of a Chief Financial Officer
Discuss three types of Financial Ratios which can be used for assessing Company
Limitations of Financial Ratios
Profit/Wealth maximization
Considerations in Capital Structure Planning
Venture capital financing
EBIT-EPS Indifference Point
Optimal Capital structure
Business Risk and Financial Risk
Bridge Finance
Debt Securitization
Deep discount bonds
Ploughing back of profits
Seed Capital assistance
PROBLEMS
Leverages-(5-8)
Cash Flow Statement
Preparation of Cash Budget
Computation of Weighted Average Cost of capital
Computation of Net Working Capital
Cost of Capital
Capital Budgeting –Project/mch selection
o IRR,MIRR
o NPV
o Payback Period
Debtor’s Management
Note: You can download the Costing and FM theory notes written by CA JatinBansal at
Costing Theory https://www.box.com/s/3i8p1cr98n3od3sl4osg
FM Theory https://www.box.com/s/pxrylv3hqevce97qojpx
PAPER IV TAXATION
PART I INCOME TAX ( 50 Marks)
Basic Concepts
Important Definitions given (2.1-2.7 in Study Material)
Charge of Income tax
Rates of income Tax
Surchg , Marginal relief , rebate u/s 87 A
Exceptions to Definition of Previous Year S.172-175
Section 6 and Section 9
Sec 68 , 69
Sec.10 Exempt to partner of firm /aop /minor
Section 10(19,20,23),Section 10(32-38)
Agricultural income exemption considering other income
Section 10(2A,8A,8B)
Section 10(10D),10(14),10(48),10(49)
Section 10AA
Income from Salaries
Rent free Accommodation
HRA Exemption
Motor Car Perquisites
Deductions u/s 80c
Relief u/s 89
Medical Facilities and Reimbursement of Medical Expenses
Gratuity Exemption Provisions
Pension Exemption Provisions
Allowances Exemption Limits
Deductions u/s 16
Income from House Property
Composite Rent
Deductions u/s 24
Inadmissible Deductions
Determination of Annual value
Unrealized Rent, Arrears
Deemed Ownership
Income from Business or Profession
Section 28,29
Speculation income and Loss treatment
Section 30,31,32,32AC
Section 40(a),40a(ia),Section 201
Section 40(b),Section 40A(7)
Section 41,43,43B,43CA
Section 44AA,44AB
Partly Business and Partly Agricultural
Income from Capital Gains
Definition Short Term and Long Term Capital Asset(Normal and Shares)
Section 2(47),2(1A)
Transactions not regarded as transfers
Capital gains in case of depreciable assets
Cost of acquisition of previous owner cases
Year of Indexation (Which year in various cases)
Section 112,115AD,50B,50C,50D,51
Exemptions
o Section 54,54F
o CG Accounts Scheme
Income from other Sources
Section 56,56(ii)
Casual income
Section 59
Section 145
Other Topics
Section 60,61
Cross Transfer
Section 64(1A)
Income includes loss in clubbing
Section 71,72,80
Set off of capital gain losses
Chapter VIA upto 80 GG,80EE,80CCG,80GGB,80GGC
TDS and Exemption cases
Advance tax Due dates
Sec206AA,194IA
Belated, Revised return,Sec.139(9)
IT Return due dates
PART B SERVICE TAX(25 MARKS)
Threshold Limit
Selective vs Comprehensive Coverage
Definition of Service
Valuation of Service
Section 65BA,66B,66D
Sec.65B(11),65B(40)
Sec.66D(d)(i)
Negative list of services
Determination of Rate of tax applicable based on date
Rule 3 ,9
Subcontractor liability
Due dates of payments and returns
Part III VAT(25 Marks)
Procedure of VAT Registration
Purchases Eligible for Input Tax credit and Ineligible Purchases
Composition Scheme
Methods of Computation of VAT
Voluntary and Compulsory Registration
Tax rates under VAT
TIN
Input Tax Credit Restrictions related to Capital Goods
Scope of Input Tax Credit
Transparency
Download Tax Amendments Applicable for May 2014 at
http://220.227.161.86/30174bos19779-ipcc.pdf
Note : Concentrate first on Service Tax and VAT for gaining confidence
PAPER V ADVANCED ACCOUNTING
Accounting Standards
o AS 5,11,20,26
Objectives and users of Financial Statements
Partnership
o Dissolution ,Piecemeal – Highest Relative Capital Method
o Consequences of Insolvency
o Conversion of firm to company/sale – (8-12)
Company Accounts
o ESOP
o Section 77B and journal Entries
o Firm Underwriting with fully underwritten
o Debenture redemption reserve
o Redemption of Debentures-Short Question
o Amalgmn/Internal Reconstruction –16 marks
o Liquidators statement
o Blist Contributories
Insurance Accounts
o Marine Insurance-Revenue A/c
o Reinsurance
o Computation of claim and commission
Banking Accounts
o Cash Reserve,SLR
o Rebate on bills discounted-Short Qn.
o Tier I and Tier II Capital
o NPA Classification and Provisioning
o Latest amendments
Electricity Accounts
o Cost of replacement(ODRC Method)
o Security Deposits treatment
o Balance sheet Rev Sch VI
Departmental Accounts
o Elimination of Unrealized Profit
o Basis of Allocation
Branch Accounts
o Accounting when invoiced at Selling Price
o Adjustment and reconciliation of HO and Branch
Note: Study all the amendments given in RTP they carry 10-12 marks this time
P A P E R V I A U D I T I N G A N D A S S U R A N C E Standards on Auditing
o SA 200
o SA 230
o SA 300
o SA 320
o SA570,540,500
o SA 240-Prct.Qn
Other Concepts
o Objectives of Auditing
o Scope of Audit
o Inherent limitations of Auditing
o Advantages of Independent Audit
o True and Fair view
o Audit Evidence
o Audit programme-Practical Question
o Importance of Working Papers
o Surprise Checks
o Examination in Depth
o Statutory and Internal Auditors Relation
o Vouching
Sales commission
Sales return
Managers/Directors Remuneration
o Verification of Assets and Liabilities
Assets Abroad
Disclosure of Reserves and Surplus
Purchase of motor car
o The Company Audit
First Auditor Appointment/Casual Vacancy/Reappointment
Problem on Disqualification
Ceiling on Number of audits
Duties of Auditors
Government Audit-Audit of commercial accounts
CARO 2003
Qualified Opinion
Removal of Auditors
Section 274(1)(g)
Section 301
Special Requirements of Company Audit-Sec.227(1A)
Disclosure of Shares issued at discount/premium in the B/S
Share Transfer Audit
o Special Audits
Local Body
Hospital
o Bolton vs The Natal Land case Law given in study material
o AS 1,5,6
Note:
1. In Vouching Chapter study the common Points in all the concepts and Write Commomn
Points + Specific Points Relevant to the Question
2. In Verification of Assets and Liabilities
a. For Assets Follow the common rule MPV ROCE i.e Measurement , Presentation in
Financial Statements,Valuation,Rights and
obligations,Occurrence,Completeness,Existence
3. In Company Audit Concentrate on CARO 2003 and Appointments
PAPER VII IT AND SM
PART A INFORMATON TECHNOLOGY (50 MARKS)
Definitions (10 Marks)
o Multiprogramming/Tasking
o Time-Sharing
o WorkStation
o Device drivers
o Intelligent Terminal
o Direct Data Entry and types
o MicroficheGraph Plotter
o List of Operating Systems Available in the Market
o Buffering
o Mirror Log
o Data Definition Language
o Referential Integrity
o File Volatality
o Incremental Backup
o Computer data code
o Double Precision key
o Unicode , ASCII Code
o FTP
o Syntax
o Repeater, Multiplexer
o NIC
o Internet server
o VPN
o Hybrid Intrusion Detection
o Web Casting
o Fault Tolerance
o SDSL Connection
o Telnet
o ICMP
o VLSI
o E-Commerce
o EMA
o EFT
o Secured Electronic Transaction
o Share ware
o MMX
o Relational DB
Other Topics
o Decision Support System, ERP
o Management problems in File processing system
o Role of DBA
o MODEM
o Data types
o Multitier Architecture
o Backup and Recovery
o Data centre protection
o Network meaning and benefits
o Paper based information systems
o Synchronous/Async. Transmission
o OSI
o LAN
o Network Threats and Vulnerabilities
o Need for Network Security
o E-Commerce
o CRM
o Intrusion Detection System
o Wifi Technology
Problems
o Flow Charts
o Number Systems -4marks
PART B STRATEGIC MANAGEMENT (50 MARKS)
Objectives of Business
Environment and its influence/relation with business
PESTLE
Regulatory/Demographic Environment
Competitive Strategies-Advantages
Importance of Strategic Management
SWOT Analysis , BCG Matrix , ADL Matrix
Michael Porter generic strategies
Grand Strategies
Directional strategies
Value chain analysis
Corporate culture, Cogeneric strategies
Mergers
Synchro-Marketing Analysis
SCM
Relationship b/w strategy formulation and implementation
SBU Structure
Leadership and Implementation
BPR, Bench Marking
Strategies for Internet economy
Functional Structure
