UPSC Optional Subject Syllabus: Commerce and Accountancy | Commerce & Accountancy Optional Notes for UPSC PDF Download

Introduction to Commerce and Accountancy Optional for UPSC

The Commerce and Accountancy optional subject for the UPSC Civil Services Examination is a highly specialized and scoring option for candidates with a background in commerce, accountancy, or related fields. This subject encompasses a broad spectrum of topics, including financial accounting, cost accounting, taxation, auditing, financial management, organizational theory, human resource management, and industrial relations. It is particularly suitable for candidates with a degree in Commerce, Chartered Accountancy (CA), Company Secretaryship (CS), or MBA (Finance), as the syllabus aligns closely with their academic and professional expertise.

Why Choose Commerce and Accountancy Optional?

• Scoring Potential: The subject is considered scoring due to its objective nature, with numerical problems and well-defined concepts that leave little room for subjective interpretation.
• Familiarity for Commerce Graduates: Candidates with a commerce background find the syllabus familiar, as it covers topics like accounting, taxation, and financial management, which are part of their academic curriculum.
• Overlap with General Studies: Topics such as financial markets, banking reforms, and economic policies overlap with General Studies Paper III (Economy), providing an advantage in preparation.
• Structured Syllabus: The syllabus is well-defined and concise, allowing candidates to cover it systematically within a reasonable timeframe.
• Availability of Resources: Standard textbooks, study materials, and coaching resources are readily available, making preparation more accessible.
• Professional Relevance: The knowledge gained is highly relevant for careers in finance, auditing, and administration, which aligns with the roles of civil servants.

Paper - I

Accounting and Finance

1. Financial 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.
   • Employee 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 - 1, Standard Costing and Variance Analysis - 2.
   • Responsibility Accounting and Divisional Performance Measurement - 1, Responsibility Accounting and Divisional Performance Measurement - 2.
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 - 1, Deductions from Gross Total Income - 2.
   • 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.

Paper - II

Organisation Theory and Behaviour, Human Resources Management and Industrial Relations