IPCC Important topics for May 2014

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Important topics for May 2014 Exams

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IPCC Important topics for May 2014

  1. 1. 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
  2. 2. 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
  3. 3. 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
  4. 4. 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.
  5. 5. 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
  6. 6. 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
  7. 7.  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
  8. 8.  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.
  9. 9. 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)
  10. 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
  11. 11.  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
  12. 12. 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
  13. 13.  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
  14. 14. 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
  15. 15.  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
  16. 16. 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)
  17. 17. 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
  18. 18. PAPER VI AUDITING AND ASSURANCE  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
  19. 19.  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
  20. 20. 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
  21. 21. 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
  22. 22. 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
  23. 23. WISH YOU ALL THE BEST SUDHEER PAIDI For any further queries mail me at sudheerpaidica@gmail.com

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