6 Things you need to know while preparing for CA Foundation Paper 4: Business Economics and Business and Commercial Knowledge

6 Things you need to know while preparing for CA foundation paper 4 by Pinnacle Education

In this article, we are sharing the tips & tricks on Preparing for CA Foundation Paper 4: Business Economics and Business and Commercial Knowledge.

What is the structure of the paper?

Paper 4 of CA Foundation Course is divided into 2 parts: 

  1. Business Economics60 marks 
  2. Business Commercial Knowledge (BCK) – 40 marks

This is an entirely objective paper comprising 100 multiple choice questions of 1 mark each to be answered in 2 hours. There is a 0.25 negative marking in case of a wrong answer. 

Please Note: The break-up of marks between the 2 parts is given as per the trend that has been observed over the years. However, ICAI may change it any time at its discretion..

What should be the source of content?

    1. Content provided by your Coaching Provider along with your personal summary notes can be used as a base. However, ensure that it is comprehensive in its coverage by cross checking it with ICAI material
    2. Past Examination Papers, RTPs and MTPs.
    3. Referencer developed by ICAI for a summarised version of the notes.

Pro Tip: Stick to your base material as a reference. You must avoid changing the source of content closer to examination since that may lead to confusion in your study preparation.

What is the ideal learning methodology & time to be invested?

A minimum of 3 detailed revisions before the exam is advisable to get a grip on the subject and understand the nuances of each chapter. 

Reading Source Time Expected Outcome 
1st A detailed study of every concept involved 7 – 8 days 
  • The key to this paper is conceptual understanding. 
  • Read through all the chapters of both economics and BCK carefully, highlighting key words. 
  • Make a list of important points to be remembered on which potential MCQs can be asked. 
  • Solve the MCQs given in the ICAI module or your other study material immediately after you finish a particular chapter. 
  • Constant revision of the study material and continuous practice with different types of MCQs is advisable. 
2nd A summarised version of the syllabus 4 – 5 days 
  • Keep revising the syllabus and reading your notes. 
  • Continue solving the multiple choice questions. Solve the entire ICAI module atleast twice and also explore other sources like the MTPs and the Shuchita Scanner*. 
  • Appear for the Cluster Tests if your Coaching Provider provides them.  
3rd A quick revision to cut-down pre-exam study time 1 to 1.5 days 
  • Read the notes prepared. 
  • Solve few earmarked questions from every chapter. 
  • Appear for a mock exam. (Preferably 2) 
4th The final revision one-day before the exam 1 to 1.5 day 
  • Trust your past preparations and instincts.  
  • Read through all the material prepared by you. 
  • Go through all important questions. 

Note: For more practice of sums, you can refer to the Shuchita Scanners available in the market and on Amazon. 

What is the appropriate order in which the syllabus should be studied?

Despite the lengthy syllabus, avoid ad-hoc selective studies; follow a method of smart studying and be thoroughly clear with all the concepts.  

Visit the concept of ‘Remember, Revise, Recollect’ all throughout your study preparation. 

Questions from each and every chapter are asked in the examination and hence all chapters are very important.  

The syllabus is divided into 2 parts. It is recommended to start with Economics as it has more weightage of marks. Another advantage is that 50% of the syllabus is similar to Std. 12 and can be studied quickly.  

Business and Commercial Knowledge is a new and slightly more theoretical subject. Concepts must be read multiple times to retain the key words.

Note: Learn about the weightage distribution over various topics as per ICAI

Some points to note: 

Business Economics Business Commercial Knowledge 
  • Questions are a mix of knowledge based and analytical (application based). 
  • Diagrams may not have to be drawn but interpretation of the diagram is frequently asked and hence you must be familiar with all the elements of all the diagrams. 
  • Numerical based questions are also asked. 
  • Questions are mainly theoretical in nature. 
  • The chapter on business organisations is more general knowledge based. The only way to remember all facts given therein is to read it continuously.  

How to crack the multiple-choice questions?

  1. Time management is one of the key success factors for any MCQ exams. Plan how much time you wish to spend on each section in advance and practise accordingly when you solve questions at home. 
  2. The answer is to be circled in an OMR Sheet. To increase familiarity, write all mock exams using the OMR sheets. 
  3. From the start, use the same calculator that you shall be using in the examination. Complete familiarity with the calculator and its various shortcuts is imperative. 
  4. In case you cannot figure out the solution to a particular question within a designated time, make sure you move ahead to the next question. 
  5. Read the question twice – pay attention to words like “not,” “always” which completely change the question. Also, double check the exact requirements of the question. Underline these words and other important keywords. 
  6. If you think the first option is correct, do not rush to circle the OMR sheet, check once if any other option seems more likely or if the last option is ‘all of the above.’ Make sure you read all the options carefully before choosing your answer. 
  7. Use following techniques to try and reach the solution: 
    1. Elimination Method: The general formula of solving a MCQ is to increase the probability of the right answer by removing all the possible wrong answers. So, start by eliminating the options which are clearly wrong.  
    2. For numerical questions, if the calculation seems too long winded, one easy method is to put the options back into the questions and check if the equation balances. 
    3. Units and dimensions often give a vital clue. Eg: if it is calculation of area, rule out options that are not in square units.

How to prepare on the eve of the exam?

Below is an illustrative list on how topics should be allocated between the three days you will have. You should prepare your own list based on the syllabus coverage and instructions by your coaching provider.

On day of Maths paper Break day On the exam day 
  • Business Economics 

Nature & Scope of Business Economics 

Theory of Demand and Supply 

Business Cycles 

  • BCK 

Common Business Terminologies  

  • BCK 

Business and Commercial Knowledge – An Introduction  

Business Environment 

Government Policies for Business Growth 

Organizations Facilitating Business 

  • Economics 

Theory of Production and Cost 

Price Determination in Different Markets 

  • BCK 

Business Organisations 

  • Revise any important concepts that you wish to revisit before the exam. 

What are the major challenges faced by students while attempting the Exam on the D Day & how must I prepare in advance to meet those challenges?

Challenges Solutions 
Inability to logically think and crack the question given Practice is the key. The more multiple choice questions you solve, the more comfortable you will get with attempting the high-order thinking questions. 
Recollecting and associating questions to the related topics Appear for mock exams in a time bound format so that you can get an idea of how to deal with all the topics together. 
Inability to manage time in the paper Unnecessary time should not be devoted on a particular question. Allot 1.5 minutes per MCQ. In case you cannot figure out the solution, move ahead and designate some time to it at the end of the paper. 
Avoiding negative marking of 0.25 marks per wrong answer The trick to an objective based paper is to answer what you know first and secure marks with questions you are a 100% confident about. 

Leaving doubtful questions unanswered can be an effective strategy to avoid the risk of negative marking, provided you are confident of scoring well in the questions that have been answered. 

For additional resources to assist you while preparing for CA Foundation, visit here.

Good Luck!

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