Commerce and Accountancy Optional Syllabus

Overview of Commerce and Accountancy Optional Subject

Commerce and Accountancy Optional Syllabus :Commerce and Accountancy is a popular optional subject for the UPSC Civil Services Mains Examination. It covers key areas like accounting, auditing, finance, and business management. This subject is ideal for candidates with a background in commerce, business administration, or finance.

Why Choose Commerce and Accountancy as an Optional?

  • Relevant Background: If you have a degree in commerce, business administration, or finance, this subject allows you to utilize your academic knowledge effectively.

  • Scoring Potential: Commerce and Accountancy can be a high-scoring subject with a well-organized approach and clear understanding of concepts.

  • Practical Application: The subject focuses on real-world applications in business and finance, making it relevant and interesting for those in the field.

  • Overlap with GS Papers: Certain topics like corporate governance and economic policies overlap with General Studies papers, providing added benefits.

Who Should Take Commerce and Accountancy Optional?

  • Commerce Graduates: If you have a degree in commerce, business management, or a related field, this subject aligns with your expertise.

  • CA/CS/CFA Candidates: If you are a Chartered Accountant, Company Secretary, or Chartered Financial Analyst, this subject complements your professional qualifications.

  • Candidates with Strong Interest in Finance and Business: If you have a passion for finance, business management, and accounting, you will find this subject engaging.

Commerce and Accountancy Optional Syllabus Paper-I

This paper focuses on accounting, auditing, and taxation. Key topics include financial accounting, cost accounting, management accounting, and auditing standards.

Topic Details
1. Financing Accounting Accounting as a financial information system; Impact of behavioural sciences. Accounting Standards e.g., accounting for Depreciation, Inventories, Research and Development Costs, Long-term Construction Contracts, Revenue Recognition, Fixed Assets, Contingencies, Foreign Exchange Transactions, Investments and Government Grants, Cash Flow Statement, Earnings per Share. Accounting for Share Capital Transactions including Bonus Shares, Right Shares. Employees Stock Option and Buy-Back of Securities. Preparation and Presentation of Company Final Accounts. Amalgamations, Absorption and Reconstruction of Companies.
2. Cost Accounting Nature and functions of cost accounting. Installation of Cost Accounting System. Cost Concepts related to Income Measurement, Profit Planning, Cost Control and Decision Making. Methods of Costing: Job Costing, Process Costing, Activity Based Costing. Volume-cost-Profit Relationship as a tool of Profit Planning. Incremental Analysis/Differential Costing as a Tool of Pricing Decisions, Product Decisions, Make or Buy Decisions, Shut-Down Decisions etc. Techniques of Cost Control and Cost Reduction : Budgeting as a Tool of Planning and Control. Standard Costing and Variance Analysis. Responsibility Accounting and Divisional Performance Measurement.
3. Taxation Income Tax: Definitions. Basis of charge; Incomes which do not form part of total income. Simple problems of computation of income (of individuals only) under various heads, i.e., salaries, income from house property, profits and gains from business or profession, capital gains, income from other sources, Income of other persons included in assessee’s total income. Set-off and Carry forward of Loss. Deductions from gross Total Income. Salient Features/Provisions Related to VAT and Services Tax.
4. Auditing Company Audit: Audit related to Divisible Profits, Dividends, Special investigations, Tax audit. Audit of banking, Insurance, Non-Profit Organization and Charitable societies/Trusts/Organizations.
5. Financial Management, Financial Institutions and Markets
1. Financial Management Finance Function : Nature, Scope and Objectives of Financial Management : Risk and Return relationship. Tools of Financial Analysis: Ratio Analysis, Funds-Flow and Cash-Flow Statement. Capital Budgeting Decisions: Process, Procedures and Appraisal Methods. Risk and Uncertainty Analysis and Methods. Cost of Capital : concept, Computation of Specific Costs and Weighted Average Cost of Capital. CAPM as aTool of Determining Cost of Equity Capital. Financing Decisions: Theories of Capital Structure—Net Income (NI) Approach. Net Operating Income (NOI) Approach, MM Approach and Traditional Approach. Designing of Capital structure: Types of Leverages (Operating, Financial and Combined), EBIT-EPS Analysis, and other Factors. Dividend Decisions and Valuation of Firm : Walter’s Model, MM Thesis, Gordan’s Model Lintner’s Model. Factors Affecting Dividend Policy. Working Capital Management: Planning of Working Capital. Determinants of Working Capital. Components of Working Capital—Cash, Inventory and Receivables. Corporate Restructuring with focus on Mergers and Acquisitions (Financial aspect only).
2. Financial Markets and Institutions Indian Financial System: An Overview Money Markets: Participants, Structure and Instruments. Commercial Banks. Reforms in Banking Sector. Monetary and Credit Policy of RBI. RBI as a Regulator. Capital Market: Primary and Secondary Market. Financial Market Instruments and Innovative Debt Instruments; SEBI as a Regulator. Financial Services: Mutual Funds, Venture Capital, Credit Rating Agencies, Insurance and IRDA.

Commerce and Accountancy Optional Syllabus Paper-II

This paper covers business finance, financial markets, organizational behavior, and human resource management. It also includes topics like corporate governance, marketing, and international business.

Topic Details
1. Organisation Theory Nature and Concept of Organisation; External Environment of Organisation—Technological, Social, Political, Economical and Legal; Organizational Goals Primary and Secondary Goals, Single and Multiple Goals; Management by Objectives. Evolution of Organisation theory : Classical Neo-classical and system approach. Modern Concepts of Organisation Theory : Organisational Design, Organisational Structure and Organisational Culture.
2. Organisation Behaviour Meaning and Concept; Individual in organization: Personality, Theories, and Determinants; Perception Meaning and Process. Motivation : Concepts, Theories and Applications. Leadership—Theories and Styles. Quality of Work Life (QWL): Meaning and its impact on Performance, Ways of its Enhancement. Quality Circles (QC)—Meaning and their Importance. Management of Conflicts in Organizations. Transactional Analysis, Organizational Effectiveness, Management of Change.
3. Human Resources Management (HRM) Meaning Nature and Scope of HRM, Human Resource Planning, Job Analysis, Job Description, Job Specification, Recruitment Process, Selection Process, Orientation and Placement, Training and Development Process, Performance Appraisal and 360° Feed Back, Salary and Wage Administration, Job Evaluation, Employee Welfare, Promotions, Transfers and Separations.
4. Industrial Relations (IR) Meaning, Nature, Importance and Scope of IR, Formation of Trade Union, Trade Union Legislation, Trade Union Movement in India. Recognition of Trade Unions, Problems of Trade Unions in India. Impact of Liberalization on Trade Union Movement. Nature of Industrial Disputes: Strikes and Lockouts, Causes of Disputes, Prevention and Settlement of Disputes. Worker’s Participation in Management: Philosophy, Rationale, Present Day Status and future Prospects. Adjudication and Collective Bargaining. Industrial Relations in Public Enterprises Absenteeism and Labour Turnover in Indian Industries and their Causes and Remedies. ILO and its Functions.

Preparation Strategy for Commerce and Accountancy Optional

  • Understand the Syllabus: Begin by thoroughly understanding the Commerce and Accountancy Optional Syllabus. Divide it into sections and plan your study schedule accordingly.

  • Focus on Core Areas: Build a strong foundation in accounting, auditing, and business finance. These areas are crucial for understanding advanced topics.

  • Practice Accounting Problems: Regular practice of accounting problems is essential, especially in areas like financial and cost accounting. Focus on accuracy and speed.
  • Revise Concepts Regularly: Make concise notes on key concepts, standards, and formulas. Regular revision of these notes will help in retention.

  • Solve Previous Year Papers: Practice with previous years’ question papers to understand the exam pattern and the types of questions asked.

  • Stay Updated: Keep yourself updated with the latest developments in finance, business management, and auditing standards, as they may be relevant to the exam.

Recommended Books and Study Materials

  •  Accounting:

    • “Financial Accounting” by S. N. Maheshwari Buy Now!
    • “Cost Accounting” by M. N. Arora Buy Now!
    • “Advanced Accountancy” by R. L. Gupta and M. Radhaswamy Buy Now!
  • Auditing and Taxation:

    • “Auditing Principles and Techniques” by S. K. Basu 
    • “Taxation” by V. K. Singhania Buy Now!
  • Business Finance and Financial Markets:

    • “Financial Management” by Prasanna Chandra Buy Now!
    • “Indian Financial System” by M. Y. Khan Buy Now!
  • Organizational Behavior and HRM:
    • “Organizational Behavior” by Stephen Robbins Buy Now!
    • “Human Resource Management” by Gary Dessler Buy Now!
  • Marketing and International Business:

    • “Marketing Management” by Philip Kotler Buy Now!
    • “International Business” by Charles Hill Buy Now!
  • Previous Year Papers:

    • Solve past UPSC Commerce and Accountancy Optional question papers to get familiar with the exam format.

Final Thoughts

Commerce and Accountancy is a strong optional subject for candidates with a background in commerce, finance, or business administration. The Commerce and Accountancy Optional Syllabus is well-structured and offers a good balance between theory and practical application. Success in this subject requires a clear understanding of concepts, regular practice of accounting problems, and staying updated with the latest developments in the field.

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