CA Foundation

CA Foundation Syllabus 2020

  • CA Foundation exam has four papers.
  • Every paper carries a maximum of 100 marksand the time duration is 3 hours for each paper.
  • Paper 1 and Paper 2 will be of Subjective Type and Paper 3 and Paper 4 will be of objective type.
  • The objective type of questions will be have negative marking for wrong answers. 1/4th of the marks will be deducted for each wrong answer.
  • Candidates must score a minimum of 40% marks in each paper and a minimum of 50% marks in aggregate of all the papers to pass the CA foundation exam.
  • CA Foundation exam is an offline exam and conducted twice a year. The question paper will be either in English or Hindi languages.

PAPER 1 : PRINCIPLES AND PRACTICES OF ACCOUNTING (100 MARKS)

Objective: To develop conceptual understanding of the fundamentals of financial accounting system and accounting for special transactions

Contents
– Theoretical Framework

  • Meaning and Scope of accounting
  • Accounting Concepts, Principles and Conventions
  • Accounting Standards – concepts, objectives, benefits
  • Accounting Policies
  • Accounting as a measurement discipline – valuation principles, accounting estimates

– Accounting Process : Books of Accounts leading to the preparation of Trial Balance, Capital and revenue expenditures, Capital and revenue receipts, Contingent assets and contingent liabilities, Fundamental errors including rectifications thereof.

– Bank Reconciliation Statement
– Inventories : Basis of inventory valuation and record keeping.
– Depreciation accounting : Methods, computation and accounting treatment of depreciation, Change in depreciation methods.
– Preparation of Final Accounts for Sole Proprietors
– Simple Problems on Financial Statements of Not-for-Profit Organisations
– Accounts from Incomplete Records.
– Average Due Date and Account Current

– Accounting for Special Transactions

  • Consignments
  • Joint Ventures
  • Bills of exchange and promissory notes
  • Sale of goods on approval or return basis
  • Departmental accounts.

– Partnership Accounts

  • Final accounts of partnership firms
  • Basic concepts of admission, retirement and death of a partner including treatment of goodwill.

– Introduction to Company Accounts : Issue of shares and debentures, forfeiture of shares, re-issue of forfeited shares, redemption of preference shares.

PAPER 2 (PART I): MERCANTILE LAWS (60 MARKS)

Objective: To test the general comprehension of elements of Mercantile Law including Company Law

Contents

  1. The Indian Contract Act, 1872: An overview of Sections 1 to 75 covering the general nature of contract, consideration, other essential elements of a valid contract, performance of contract and breach of contract.
  2. The Sale of Goods Act, 1930: Formation of the contract of sale, Conditions and Warranties, Transfer of ownership and delivery of goods, Unpaid seller and his rights.
  3. The Indian Partnership Act, 1932: General Nature of Partnership, Rights and duties of partners, Registration and dissolution of a firm.
  4. The Limited Liability Partnership Act, 2008: Introduction- covering nature and scope, Essential features, characteristics of LLP, Incorporation and differences with other forms of organizations.
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  5. The Companies Act, 2013 [s.1 to 22]: Important definitions, Introduction of company & corporate veil theory, Classes of companies, Conversion of company, Incorporation of company, Memorandum of Association, Articles of Association, Alteration of Memorandum and Articles, Doctrine of Indoor Management, Conversion of companies already registered, Promoters, Service of documents.
    Chapters 1 to 4 carries 45 marks and chapter 5 carries 15 marks.
    Note: If new legislations are enacted in place of the existing legislations, the syllabus would include the corresponding provisions of such new legislations with effect from dates notified by the Institute.

PAPER-2 (PART-II) GENERAL ENGLISH (40 Marks)

SECTION  A :  Comprehension Passages and Note Making

  • Comprehension Passages
  • Note Making

SECTION B : Developing Writing Skills

  • Article Writing
  • Report Writing
  • Writing Formal Letters
  • Writing Mails
  • Resume Writing

SECTION C : Basic English Grammar

  • Introduction to Basic Writing
  • Nouns, Pronouns and Verbs
  • Articles, Adjectives and Adverbs
  • Prepositions, Conjunctions and Interjections
  • Direct-Indirect, Active -Passive Speech
  • Vocabulary Root Words, Synonyms, Antonyms, Prefixes, Suffixes, Phrasal verbs, Collocations and Idioms.

PAPER –3: BUSINESS MATHEMATICS LOGICAL REASONING AND STATISTICS -100 Marks

OBJECTIVES: The Objective of this course is to familiarize students with basic Mathematical and Statistical tools with emphasis on applications to Business, Finance and Economic situations .Logical reasoning tests helps the students thinking power and mental applicability skills.

The whole syllabus of Business Mathematics Logical Reasoning and Statistics shall be divided into two broad areas.

Business Mathematics and Logical reasoning (60 marks)

Part I : Business Mathematics (40 marks)

  • Ratio and proportion, Indices and Logarithms : Ratio and proportion and Time and work related problems, Laws of Indices, Exponents and Logarithms and Anti Logarithms.
  • Equations and Matrices
    • Equations: Linear Simultaneous linear equations up to three variables, Quadratic and Cubic equations in one variable.
    • Algebra of Matrices:  Inverse of a Matrix and determinants, solving system of equations using matrix method (Cramer’s rule) involving not more than three variables.
  • Inequalities : Linear Inequalities in one variable and the solution space
  • Time value of Money (Financial Mathematics)
    • Simple Interest
    • Compound interest
    • Effective Rate of Interest
    • Present Value
    • Net Present Value
    • Future Value
    • Perpetuity
    • Annuities
    • Sinking Funds
    • Calculating of EMI Calculations of Returns:
    • Nominal Rate of Return
    • Effective Rate of Return
    • Compound Annual growth rate (CAGR)
  • Sets Functions and Relations
  • Basic applications of Differential and Integral calculus (Excluding the trigonometric applications)
  • Permutations and Combinations:  Basic concepts of Permutations and combinations: Introduction, the factorial, permutations, results, circular permutations, permutations with restrictions, Combinations with standard results.
  • Sequence and Series : Introduction Sequences, Series, Arithmetic and Geometric progression, Relationship between AM and GM and Sum of n terms of special series.

Part II : Logical Reasoning: (20 marks)

  • Number series coding and Decoding and odd man out.
  • Blood Relations,
  • Seating Arrangements,
  • Direction Tests

Part III : Business Statistics (40 marks)

  • Statistical description of Data :Statistical Representation of Data, Diagrammatic representation of data, Frequency distribution, Graphical representation of Frequency Distribution – Histogram, Frequency Polygon, Ogive, Pie-chart.
  • Measures of Central tendency and Dispersion : Measures of Central Tendency and Dispersion: Mean Median, Mode, Mean Deviation, Quartiles and Quartile Deviation, Standard Deviation, Co-efficient of Variation, Coefficient of Quartile Deviation.
  • Correlation and Regression : Correlation and Regression: Scatter diagram, Karl Pearson’s Coefficient of Correlation Rank Correlation, Regression lines, Regression equations, Regression coefficients.
  • Theoretical Distributions : Theoretical Distributions: Binomial Distribution, Poisson distribution – basic application and Normal Distribution – basic applications.
  • Probability : Independent and dependent events; mutually exclusive events. Total and Compound Probability; Bayes’ theorem; and Mathematical Expectation.
  • Index Numbers and Time Series
    • Index Numbers: Uses of Index Numbers, Problems involved in construction of Index Numbers, Methods of construction of Index Numbers.
    • Time Series Analysis – basic application including Moving Average, Moving Average Method, and Method of Least Squares.
  • Sampling Theory and Testing of Hypothesis
    • Sampling theory: Basic Principles of Sample survey, Comparison between sample survey and enumeration, errors in Sample survey, some Important terms associated with sampling, types of sampling.
    • Testing of Hypothesis, Large sample tests (Test for means, test for proportions and test for Standard deviations) and sample tests applications of t, F-distribution (Variance ratio test) and Chi-square test.

PAPER 4: BUSINESS ECONOMICS & BUSINESS AND COMMERCIAL KNOWLEDGE (100 MARKS)

Part I: Business Economics (60 Marks)

  • Introduction to Business Economics
    • Meaning of Business Economics
    • Objectives of Business Firm- Profit Maximization, Sales Maximization, Growth Maximization.
  • Theory of Demand and Supply :
    • Meaning and determinants of demand, Law of demand and Elasticity of demand ─ Price, income and cross elasticity
    • Theory of consumer’s behaviour – Marshallian approach and Indifference curve approach
    • Meaning and determinants of supply, Law of supply and Elasticity of supply.
    • Demand Forecasting
  • Theory of Production and Cost
    • Meaning and Factors of production
    • Laws of Production – The Law of Variable proportions and Laws of Returns to Scale, Producer’s equilibrium
    • Concepts of Costs ─ Short-run and long-run costs, Average and marginal costs, Total, fixed and variable costs.
  • Price Determination in Different Markets
    • Various forms of markets – Perfect Competition, Monopoly, Monopolistic Competition and Oligopoly
    • Price determination in these markets.
  • Business Cycles
    • Meaning of Business Cycles
    • Phases of  Business Cycles
    • Features of Business Cycles.
    • Causes behind these Cycles.

Paper 4 : Part II –  Business And Commercial Knowledge

Objectives : Have a basic knowledge of common business and commercial concepts.bInculcate a habit to remain updated about developments in the business and commercial world.

Students are expected to read at least one financial newspaper and one business magazine on a regular basis.  They may also watch a business channel to remain updated about the developments related to commercial world.

Contents

  • Introduction to Business: Nature of Business, Profession and Employment. Objectives of Business. Business and Commercial Knowledge. Economic and Non-Economic Activities.
  • Business Environment
    • Micro     and     Macro     Environment,     Elements     of     Micro     Environment
    • Consumers/Customers, Competitors, Organization, Market, suppliers, Intermediaries, Elements of Macro Environment – Demographic, Economic, Political-legal, Sociocultural, Technological, Global Environment.
  • Business organizations : Top Indian and Global Companies.
  • Government Policies for Business Growth
    • Policies creating conducive business environment – Startups, E-commerce.
    • Liberalization, Privatization, Foreign Direct Investment.
  • Organizations facilitating Business
    • Indian regulatory bodies – SEBI, RBI, IRDA, CCI, FMC, CBDT, CBEC Indian Development Banks – IFCI, IDBI, SIDBI, EXIM Bank, NABARD
    • Global organizations and world trade bodies – IMF, ADB, WTO, OECD, SAARC, ASEAN, OPEC.
    • Accounting Bodies – IFAC, IASB, IESB, CAPA, SAFA, AOSSG.
  • Common Business and Commercial Terminologies : Finance, Marketing and other business terms. Stock Market Terminology.