Financial Accounting - Elements of Financial Accounting-I

1 Accounting Standards Issued by ICAI and Inventory Valuation
• Accounting Standards:
Concepts, Benefits, Procedures for Issue of Accounting Standards
Various AS:
AS – 1: Disclosure of Accounting Policies
(a) Purpose (b) Areas of Policies (c) Disclosure of Policies
(d)Disclosure ofChange in Policies(e) Illustrations
AS – 2: Valuation of Inventories (Stock)
(a) Meaning, Definition (b) Applicability (c) Measurement of Inventory
(d) Disclosure inFinal Account(e) Explanation with Illustrations
AS – 9: Revenue Recognition
(a) Meaning and Scope (b) Transactions Excluded (c) Sale of Goods
(d) Rendering of Services (e) Effects ofUncertainties (f) Disclosure (g)
Illustrations
• Inventory Valuation
Meaning of Inventories
Cost for Inventory Valuation
Inventory Systems : Periodic Inventory System and Perpetual Inventory System
Valuation: Meaning and Importance
Methods of Stock Valuation as per AS – 2:
FIFO and Weighted Average Method
Computation of Valuation of Inventory as on Balance Sheet Date:
If Inventory is taken on a Date After the Balance Sheet or Before the Balance Sheet

2 Final Accounts
• Expenditure
a) Capital (b) Revenue
Receipts
a) Capital (b) Revenue
• Adjustments and Closing Entries
• Final Accounts of Manufacturing Concerns (Proprietary Firm)

3 Departmental Accounts
Meaning
Basis of Allocation of Expenses and Incomes / Receipts
Inter Departmental Transfer: At Cost Price and Invoice Price
Stock Reserve
Departmental Trading and Profit and Loss Account and Balance Sheet

4 Accounting for Hire Purchase
Meaning
Calculation of Interest
Accounting for Hire Purchase Transactions by Asset Purchase Method Based on Full Cash Price
Journal Entries, Ledger Accounts and Disclosure in Balance Sheet for Hirer and Vendor
(Excluding Default, Repossession and Calculation of Cash Price)

Innovative Financial Services

Introduction to Traditional Financial Services
a) Financial Services:
Concept, Objectives/Functions, Characteristics, Financial Service Market, Financial Service Market Constituents, Growth of Financial Services in India, Problems in Financial Services Sector, Banking and Non-Banking Companies, Regulatory Framework
b) Factoring and Forfaiting:
Introduction, Types of Factoring, Theoretical Framework, Factoring Cost, Advantages and Disadvantages of Factoring, Factoring in India, Factoring v/s Forfaiting, Working of Forfaiting, Benefits and Drawbacks of Forfaiting, Practical Problems.
c) Bill Discounting:
Introduction, Framework, Bill Market Schemes, Factoring V/s Bill Discounting in Receivable Management.

Issue Management and Securitization
a) Issue Management and Intermediaries:
Introduction, Merchant Bankers/ Lead Managers, Underwriters, Bankers to an Issue, Brokers to an Issue
b) Stock Broking:
Introduction, Stock Brokers, SubBrokers, Foreign Brokers, Trading and Clearing/Self Clearing Members, Stock Trading ( Cash and Normal) Derivative Trading
c) Securitization:
Definition, Securitization v/s Factoring, Features of Securitization, Pass Through Certificates, Securitization Mechanism, Special Purpose Vehicle, Securitisable Assets, Benefits of Securitization, New Guidelines on Securitization

Financial Services and its Mechanism
a) Lease and Hire-Purchase:
Meaning, Types of Lease - Finance Lease, Operating Lease, Advantages and Disadvantages of Leasing, Leasing in India, Legal Aspects of Leasing.
Definition of Hire Purchase, Hire Purchase and Installment Sale Characteristics, Hire Purchase and Leasing, Advantages of Hire Purchase, Problems of Hire Purchase.
b) Housing Finance:
Introduction, Housing Finance Industry, Housing Finance Policy Aspect, Sources of Funds, Market of Housing Finance, Housing Finance in India- Major Issues, Housing Finance in India – Growth Factors, Housing Finance Institutions in India, National Housing Bank (NHB), Guidelines for Asset Liability Management System in HFC, Fair Trade Practice Code for HFC’s, Housing Finance Agencies

c) Venture Capital:
Introduction, Features of Venture Capital, Types of Venture Capital Financing Stages, Disinvestment mechanisms, Venture Capital Investment process, Indian Scenario

Consumer Finance and Credit Rating
a) Consumer Finance:
Introduction, Sources, Types of Products, Consumer Finance Practice in India, Mechanics of Consumer Finance, Terms, Pricing, Marketing and Insurance of Consumer Finance, Consumer Credit Scoring, Case for and against Consumer Finance
b) Plastic Money:

Growth of Plastic Money Services in India, Types of Plastic Cards- Credit card- Debit Card- Smart card- Add-on Cards, Performance of Credit Cards and Debit Cards, Benefits of Credit Cards, Dangers of Debit Cards, Prevention of Frauds and Misuse, Consumer Protection. Indian Scenario.
Smart Cards- Features, Types, Security Features and Financial Applications
c) Credit Rating:
Meaning, Origin, Features, Advantages of Rating, Regulatory Framework, Credit Rating Agencies, Credit Rating Process, Credit Rating Symbols. Credit Rating Agencies in India, Limitations of Rating

Business Mathematics

1 Ratio, Proportion and Percentage
Ratio- Definition, Continued ratio, Inverse Ratio,
Proportion - Continued proportion, Direct proportion, Inverse proportion,
Variation - Inverse variation, Joint variation
Percentage- Meaning and computation of percentage

2 Profit and Loss
Terms and formulae, Trade discount, Cash discount, problems involving cost price, selling price, trade discount, cash discount. Introduction to Commission and brokerage – problems on commission and brokerage

3 Interest and Annuity
Simple interest, compound interest,
Equated monthly instalments, reducing balance and flat rate of interest
Annuity immediate- present value and future value
Stated annual rate and effective annual rate

4 Shares and Mutual Fund
Shares- Concept, face value, market value, dividend, Equity shares, preference shares, bonus shares,
Mutual Fund- Simple problems on calculation of net income after considering entry load, exit load, dividend, change in net asset value