CA Foundation Accounts 2023: Syllabus, Pattern & Papers

Paper 1 of the CA Foundation course is called CA Foundation Accounts, sometimes referred to as Principles and Practice of Accounting. The CA Foundation accounts curriculum covers fundamental accounting concepts and how they are applied to books. Students will study 10 chapters totaling 100 marks for the CA Foundation Accounting exam. Students should finish the syllabus as soon as possible and start working on the practice test papers as the CA Foundation exams are drawing near. You may find the CA Foundation Accounting syllabus, study guides, exam format, chapter weighting, test-taking advice, and sample questions in this comprehensive post.

The first topic in the CA Foundation series, Accounts, covers the fundamental ideas and procedures of accounting. Moreover, Accounting is a crucial component of the entire CA Course. Your understanding of debit, credit, debtors, creditors, or basic accounting entities, as well as their underlying principles, will be aided by the theoretical portion of the Principles and Practice of Accounting course. Students find it simple to understand how they are treated in accounting books once they have a basic comprehension. Also, they will learn how to analyze accounting accounts using various ratios and assist in resolving complicated company issues. The Accounting papers will be administered on June 24, 2023, by the CA Foundation test scheduled for June 2023.

Initial Pages

The Board of Studies' faculty members created this study guide. The goal of the study material is to give pupils instructional materials so they may learn about the subject. Students can write to the Director of Studies if they have any questions or recommendations for how to make the information included even better. Every effort has been made to offer explanations and conversations that will benefit the students. However, neither the Institute's Council nor any of its Committees have specifically discussed the Study Material, thus it should not be assumed that the opinions represented here necessarily reflect those of the Council or any of its Committees.

Chapter 1: Theoretical Framework

Unit 1: Meaning and Scope of Accounting

Every person engages in some sort of economic activity. A salaried person receives payment and uses it to pay for food and clothing, the education of their children, the building of their home, and other expenses. A sports club founded by a group of people, a company controlled by a single person or a group of people, a local government like the Calcutta Municipal Council or the Delhi Development Authority, or a state or federal government, all engage in some type of economic activity. Not all economic operations are necessarily carried out for the advantage of the individual; some may serve the greater good of society. Nevertheless, transactions and events are used to carry out such economic operations. A business, the performing of an act, or an agreement is referred to as a "transaction," whereas a "event" is a happening or outcome of a transaction.

Unit 2: Accounting Concepts, Principles And Conventions

Everyone participates in economic activities of some kind. A person who works for a salary receives pay and spends it on necessities like food and clothing, their children's education, the construction of their home, and other costs. All governments, whether they be state or federal, local governments like the Calcutta Municipal Council or the Delhi Development Authority, or sports clubs created by a group of individuals, operate in some capacity economically. Not all economic activities are carried out for the benefit of the individual; others may be done for the benefit of society as a whole. Yet, these economic operations are carried out through transactions and events. A "transaction" is a business, the performance of an act, or an agreement, but an "event" is an occurrence or result of a transaction.

Unit 3: Accounting Terminology – Glossary

● Acceptance

In a bill of exchange, the drawee must sign their agreement to the drawer's instructions.
Moreover, a bill of exchange that has been accepted is referred to by this phrase.

● Accounting policies

Accounting policies are the particular accounting concepts and application techniques that a business uses to prepare and report financial statements.

● Accrual/Mercantile Basis of Accounting

Recognizing income and expenses as they are earned or spent, as opposed to when money is paid or received. Regardless of the actual receipts or payments, it comprises the recognition of transactions pertaining to assets and liabilities as they happen.

● Accrued Asset

A growing but unenforced claim made against another person that grows over time, after a service is rendered, or in some other way. It could result from providing services (including using money) that, as of the accounting date, had only been partially completed and were not yet billable.

● Accrued Expense

An expense that has been incurred during an accounting period but for which the company has not yet received any enforceable claims. It may result from the acquisition of services (including the expenditure of money) that were only partially completed and billable as of the accounting date.

● Accrued Liability

A developing but unenforced claim made by another party that grows through time, after receiving service, or in some other way. It could result from the acquisition of services (including the usage of money) that were available as of the accounting date.

Unit 4: Capital And Revenue Expenditures and Receipts

Accounting seeks to determine and show the outcomes of the company for a given accounting period. The nature of transactions, such as whether they are of a capital or revenue nature, should be examined in order to determine the periodic business results. The term " Revenue Expenditure'' refers to business operations during a given accounting period, revenue produced during that period, or expenses for things whose advantages are limited to that period. On the other hand, capital expenditure produces long-term advantages and aids in generating revenue over a number of accounting periods. Revenue expenses must be connected to an entity's physical activity. Hence, consumption of goods and services in support of those functions results in expenses, whereas production and sales produce money in the earning process. Through the matching principle, which specifies when and how much of the expense should be charged against revenue, expenses are recognized in the profit and loss account. Only when expenses can be directly linked to identifiable streams of future benefits may they be capitalized in part.

Unit 5: Contingent Assets and Contingent Liabilities

A contingent asset is a potential asset that results from past events and whose existence won't be established until one or more unpredictable future events that aren't entirely under the enterprise's control occur or don't. It typically results from unforeseen circumstances that create the possibility of an economic benefit inflow to the corporate entity. A claim that a business is pursuing via the legal system, the outcome of which is uncertain, is an example of a contingent asset.

Unit 6: Accounting Policies

Accounting Policies refer to particular accounting principles and ways of putting them into practice that the company has established in the creation and presentation of financial statements. Policies are based on a variety of accounting principles, concepts, and practices that were already covered in Unit 2 of Chapter 1. The management must exercise thoughtful judgement when selecting a specific accounting policy that is appropriate for the unique circumstances under which the enterprise is operating. By the use of Guidance Notes and Accounting Standards, the ICAI has been working to limit the number of approved accounting practices in collaboration with the government, other regulatory organizations, and progressive management. It has already made considerable strides in this direction.

Unit 7: Accounting as a Measurement Discipline – Valuation Principles, Accounting Estimates

A crucial component of accounting is measurement. The primary unit of measurement for transactions and events is money. Each measurement discipline works with three fundamental components of measurement: identifying the things and events to be measured, choosing the standard or scale to be used, and assessing the dimensions of the standard or scale. Ordinal numbers, also known as ordinals, are used to indicate a place in an ordered list, such as first, second, third, and so on. Cardinal numbers, on the other hand, indicate the quantity, such as one, two, three, four, etc.

Unit 8: Accounting Standard

Financial statements serve as the "language of business" used by accounting to communicate an organization's financial results to various stakeholders. Financial statements may be deceptive, tendentious, and paint an inaccurate rather than genuine picture of the organization if the financial accounting process is not adequately regulated. The accounting principles and policies must be standardized to guarantee financial reporting's accuracy, sufficiency, comparability, and reliability. To make the financial statements of various organizations comparable, accounting standards (ASs) establish a framework and uniform accounting procedures for the treatment of transactions and occurrences.

Unit 9: Indian Accounting Standards

Every nation has its own set of accounting and financial reporting laws and guidelines. Therefore, when a business decides to raise money from markets outside of the nation in which it is located, the laws and regulations of those other countries will apply. As a result, the business must be able to comprehend how the laws governing financial reporting differ in the foreign country from those in its nation of origin. Hence, in a world that is quickly globalizing in all respects, translation and reinstatements are of the utmost importance.

Chapter 2: Accounting Process

Unit 1: Basic Accounting Procedures – Journal Entries

The double-entry accounting method has been around for more than 500 years. Summa de Arithmetica, Geometria, Proportioni, et Proportionalita (*Everything about Arithmetic Geometry and proportions) was written by Italian mathematician and monk Luca Pacioli. the first publication to explain double-entry accounting. A double-entry bookkeeping system has developed as a result of the development of numerous accounting techniques. It is the only accounting system that is scientific. It states that every transaction has two components—a credit and a debit—and that both components must be documented in the books of accounts. As a result, every transaction affects at least two accounts.

Unit 2: Ledgers

After entering the transactions in the journal, the recorded data are categorized and organized according to how the accounts will be prepared. Ledger is the name given to the book that contains all sets of accounts, including personal, real, and nominal accounts. The principal books of accounts are those that show the account-by-account balance of each account.

Unit 3: Trial Balance

Trial balance includes different ledger balances as of a specific date. It serves as the foundation for creating the balance sheet and profit and loss statement, which are the final statements. If it adds up, the accounting is mathematically correct, but some inaccuracies might still go unnoticed. Thus, it is crucial to meticulously journalize and post the entries while adhering to accounting principles.

Unit 4: Subsidiary Book

The majority of commercial transactions often involve cash receipts and payments, the sale of items and their acquisition. For each of these categories of transactions, it is practical to maintain a distinct register: one for cash receipts and payments, one for the purchase of products, and one for the selling of commodities. A book of original entries or a prime entry register is what is known as this sort of register. There won't be any journal entries for transactions that are recorded in such books.

Unit 5: Cash Book

Monetary transactions are immediately recorded in the Cash Book, and ledger accounts are created based on this record. The Cash Book is a supplementary book as a result. Yet, the balances are directly recorded into the trial balance; the Cash Book itself functions as both the cash account and the bank account. As a result, the Cash Book is included in the ledger. As a result, it must also be considered the main book. Hence, the Cash Book is both a major and a subsidiary book.

Unit 6: Rectification of Errors

Errors are typically described as the unintentional omission or commission of sums and accounts throughout the transaction recording procedure. These different unintended mistakes may occur during the stages of gathering the financial data or information on which financial statements are derived as well as during the recording of this data. Moreover, mistakes could be the consequence of erroneous math’s, incorrect application of accounting principles, inaccurate data interpretation, or oversight. A trial balance is created to verify the arithmetic precision of the journal and ledger accounts. It can be claimed that there are accounting issues that need to be corrected if the trial balance does not add up.

Chapter 3: Bank Reconciliation Statement

In the modern world, banks play a crucial role in society. Business entities found it challenging to conduct each business activity with cash due to the growth in trade, commerce, and business. They realized that regularly transacting through a bank would be the better and safer choice, and significant business entities eventually shifted to banking transactions rather than transacting in cash. Nowadays, whether it's a receipt or a payment, the majority of commercial transactions are completed through a bank. Instead, after a certain threshold, it is legally required to conduct the transactions through a bank.

Chapter 4: Inventories

Depending on the nature of an enterprise's business, there may be several sorts of inventory. A trading company's inventory is generally made up of goods that were bought to be sold as-is. Also, it might contain a supply inventory that includes things like stationery, boxes, and wrapping paper. The inventories of a manufacturing company are divided into three categories: finished products, work-in-process (items in the factory that are partially completed products), and raw materials. Inventory lists for manufacturing companies will also include consumables, spare parts, loose tools, and maintenance supplies.

Chapter 5: Concept and Accounting of Depreciation

Common terminology refers to them as fixed assets. When a fixed asset is purchased, its original or acquisition/purchase cost is documented in the books of accounts. However, until a particular fixed asset is sold or disposed of, it continues to generate revenue for a number of accounting periods in the future at the same acquisition cost. So, it is necessary to treat or allocate a portion of the fixed asset acquisition cost as an expense in each accounting period in which the asset is used.

Chapter 6: Accounting for Special Transactions

Unit 1: Bill Of Exchange and Promissory Notes

It is customary for the seller to provide the buyer with a credit period when products are sold or services are rendered. Sometimes the seller may not be able to grant a credit period, and the buyer may not be able to make an immediate payment. In these situations, the seller would like a written commitment from the buyer to pay the agreed-upon price for the items by a specific date so that he has access to funds right away.

Unit 2: Sale of Goods on Approval or Return Basis

In the regular course of business, when items are sold to clients, the sale is treated as having occurred instantly, and the related revenue is recorded in the profit and loss account. Nonetheless, a businessman typically has difficulties because of the intense market rivalry when he tries to boost sales or launch a new product. To combat it, merchandise may occasionally be sent to buyers on a sale or return basis. In this context, "items sent on approval" or "goods sent on a return basis" refers to the delivery of goods to clients with the choice to keep them or return them within a given time frame.

Unit 3: Consignment

Consignment refers to sending. The phrase "consignment account®" in accounting refers to accounts that deal with situations in which one person (or company) gives goods to another person (or firm) with the understanding that the commodities would be sold on the latter's behalf and at the latter's risk. You should take great note of the following:
1. The main is the party that ships the goods (consignor).
2. Agent refers to the person (consignee) to whom things are delivered.
3. The agent or the consignee does not become the owner of the goods even while they are in his custody; ownership, or the property in the commodities, remains with the consignor or the principal. Of course, the purchaser will become the new owner upon a transaction.

Unit 4: Average Due Date

In commercial companies, a single party may make and receive numerous payments at various periods in time. The concept of average due date has been established to calculate interest involved in such transactions more simply. The average due date is the day that a person who owes multiple amounts due on various dates wishes to pay the entire amount due by them so that neither the debtor nor the creditor stands to lose or earn anything using interest.

Unit 5: Account Current

An ongoing record of transactions between parties over a certain period is known as an account current, which also contains interest that may be levied or authorized on various things. The structure resembles a ledger account. When account current is prepared, among other things, there are:
1. It is ready when there are many transactions between two parties regularly. For instance, it is created by a manufacturer that repeatedly sells goods to a retailer on credit, receives payments from him in instalments at various times, and assesses interest on the balance that is unpaid.
2. If the consignor of the goods is planning to settle the account after the consignment and interest is charged on the outstanding balance, the consignee may also establish an Account Current. You can click on the provided link to view and download the PDF of the entire CA Foundation study guide in both English and Hindi. In addition, you can look at the top CA Foundation Books to prepare for the May 2023 exam.

In Chapter 6 of the CA Foundation Accounting, an Average Due Date is a crucial component.
The average due date is a date determined for the settlement of several dated items that are fair to both the debtor and the creditor. The average due date is calculated by adding the credit period of one month to the due date of each business transaction. Students are free to use any date as their base date for determining the average due date.

The CA Foundation course syllabus has been updated by ICAI for all of the new scheme's papers. At the provided link below, students can obtain the CA Foundation 2023 curriculum for the Accounting paper.

Students must be familiar with the most recent paper pattern to perform well on the ICAI Foundation Accounting paper. As a result, we have listed the CA Foundation Accounting paper format for the May 2023 tests in the table below.

You can see the breakdown of chapters and modules according to the marks weightage given In exams and plan your study accordingly.

1. Make a chart outlining the formulas and theories and post it in your room so you can easily refer to it.
2. Write notes and use your own words to demonstrate every theory and concept.
3. Create charts outlining every one of the accounting rules and try to remember them engagingly.
4. Determine the nature of the product while preparing accounting statements and properly examine it before treatment.
5. Download the CA Foundation question papers and solutions after finishing the curriculum to begin studying. Analyze your performance after completing the paper by comparing your answer sheet to the ICAI solutions.

That concludes the discussion of the May 2023 exam’s CA Foundation Accounting paper. You now have a better understanding of the curriculum, study guides, exam format, and chapter weighting. You also receive previous year’s test questions, MTPs, RTPs, and a study schedule to help you achieve higher CA Foundation accounts scores.

We wish you nothing but success in the future.