8 Things you need to know while preparing for CA Intermediate Paper 5: Advanced Accounting

8 things you need to know about CA Inter Advanced Accounting

In this article, we are sharing the tips & tricks on Preparing for CA Intermediate Paper 5: Advanced Accounting.

What is the structure of the paper?

The Advanced Accounts paper of CA Intermediate has both conceptual and practical aspects to it where the theory or conceptual questions mainly relate to Accounting Standards. 

You are required to attempt 5 out of 6 questions of 20 marks each.

  1. Generally, the first question, which is to be compulsorily attempted, consists of 4 questions of 5 marks each on Accounting Standards.
  2. Question No. 2 to 5 usually comprises 2 questions of 10 marks each which are elaborate practical questions. There may also be a combination of one 15-16 marks practical question and a 4-5 marks theory question.
  3. Question No. 6 once again includes a break up of 4 questions of 5 marks each, containing a mix of Accounting Standards and smaller practical questions.

Please Note: This is the trend that has been observed over the years. However, ICAI may change its paper pattern and question break-up any time.

What are the examiner’s expectations?

  1. Emphasis will be laid on conceptual clarity and understanding of each AS. The examiner will assess the ability of the student to comprehend the question, relate the relevant AS and exercise of good judgement.
  2. Presentation of the answers (appropriate formats and working notes) will be given importance.
  3. The assumptions made are reasonable and in line with ICAI.

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?

Reading Source Time Expected Outcome 
1st A detailed study of every concept involved 6 to 7 days 
  • Eliminate the easy questions and prepare a repository of questions 
  • Prepare notes with short explanations or graphic charts for every AS. Read as many different types of questions as you can pertaining to each AS. 
  • Highlight the important and tricky adjustments so that you can just go through them whenever you revise instead of practicing the entire solution.  
  • Do not attempt to solve every sum – just ensure you know the flow of the answer and make a quick reference list of the important points you must remember about every chapter.  
  • If time permits, solve the MCQs in the ICAI module for conceptual clarity. 
2nd A summarised version of the syllabus 3 to 4 days 
  • Cut down the list of questions to be practised in this revision. 
  • Keep reading the notes you have prepared for the AS and the practical chapters. 
3rd A quick revision to cut-down pre-exam study time 1 to 1.5 day 
  • Go through all your summarised notes and appear for a mock exam. 
4th The final revision one-day before the exam 1 to 1.5 day 
  • Trust your past preparations and instincts.  
  • Read through all the summarised notes prepared by you. 
  • Go through all important adjustments and earmarked sums. 

Pro Tip: Ensure that you practice 1-2 questions of each concept, practical or theoretical, in writing to enhance your conceptual clarity and to learn how to present the answers appropriately.

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

The overall portion can be mainly divided into 2 parts: Accounting Standards and other Practical Chapters.

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.

A. Accounting Standards

Accounting Standards have a minimum 20% to upto 40% weightage in the exams, thus constituting a very important portion of the syllabus.

Type of Questions Accounting Standards 
Theoretical Questions AS 4: Contingencies and Events occurring after the Balance Sheet Date 
AS 5: Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies 
As 18: Related Party Disclosures 
Practical Questions AS 7: Construction Contracts 
AS 14: Accounting for Amalgamations – I guess this also gets covered in Theory from AS perspective on standalone basis. 
AS 17: Segment Reporting 
AS 19: Leases 
AS 20: Earnings per share 
AS 22: Accounting for Taxes on Income 
Theoretical + Practical Questions AS 9: Revenue Recognition  
AS 24: Discontinuing Operations 
AS 26: Intangible Assets 
AS 29: Provisions, Contingent Liabilities and Contingent Assets 

Study each accounting standard based on the type of questions that are more frequently asked from them.

B. Practical-oriented Chapters

ICAI generally covers all of the chapters in the question paper and hence all have almost equal weightage.  

Nevertheless, some trends and observations from the past year examination papers are as under: 

Names of Chapters Type and Weightage of Questions asked 
  • Dissolution of Partnership Firms 
  • Accounting for Employee Stock Option PlansESOP 
  • Buyback of Securities and Equity Shares with Differential Rights (often combined with related concepts from Paper 1) 
10 mark practical questions from each 
  • Amalgamation, Conversion and Sale of Partnership 
  • Amalgamation of Companies 
  • Internal Reconstruction 
  • Consolidated Financial Statements 
Single question of 10-16 marks, sometimes even 20. 
  • Banking Companies 
  1. Elaborate 15-20 marks question for preparing the financial statements of banks. 
  1. 5 marks questions on concepts like capital adequacy, income recognition, special transactions and provision on NPAs. 
  • Liquidation of Companies 
  • Non-Banking Financial Companies 
Either 5 or 10 mark question, the number of adjustments varying with the marks. 
  • Theory from practical chapters 
5 marks 

Disclaimer: The above analysis is based on examination papers of the last 3-4 years. The trend may change from time to time at discretion of ICAI. 

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

How can I ace my exam writing skills?

Accounting papers are known to be lengthy – The best way through it is to know a rough format of your answers in advance by practicing a few answers of each chapter in writing. 

        1. Use the 15 minutes reading time judiciously to strategize your way through the paper.
        2. It is very important to choose the right order for attempting the paper – ensure that you manage to attempt 40 marks in the first 1-1.25 hours.
        3. 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.
        4. Present the answers to the questions on AS in the following manner:
          1. AS Number and Title 
          2. Provision or AS along with a formula (if any) 
          3. Facts of the case 
          4. Comments and recommendations 
          5. Conclusion 
        5. Ensure that you bullet your answers and underline the key words, wherever relevant.
        6. Ensure that all formats are properly made with headings and rupee symbol clearly written.
        7. For financial statements of banks, the schedule and format prescribed by the Banking Regulations Act must be followed to That.

Pro Tip: Start writing your exam with the question you are most comfortable with – it will help to boost your confidence for the paper.

How to prepare on the eve of the exam?

It is possible to revise the entire syllabus provided you have prepared summary notes and have a thorough grip on the content. 

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 Tax Paper On Break day On day of Exam 
  • Go through all the notes and earmarked questions for accounting standards. 
  • Try and finish all 13 standards on this day. 
  • Complete the larger topics in the first half of the day, namely amalgamation of companies / partnership firms, consolidation and internal reconstruction. 
  • Next, take up financial statements of banking companies and related concepts. 
  • If possible, also finish buyback, ESOP and liquidation. 
  • First complete the remaining chapters i.e. NBFCs and dissolution. 
  • Go through the quick reference list of the important points you must remember about every chapter. 
  • Read earmarked sums and adjustments. 

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 present an answer to a new question 
  • Solve a couple of questions in writing in every revision. 
  • Focus on the format of the various answers as per ICAI. 
  • Know when to elaborate through working notes to improve understand-ability. 
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 
Scoring well in the theory based questions Use the right vocabulary – stick to the keywords used by ICAI 
Inability to manage time in the paper Unnecessary time should not be devoted on a particular question. In case you cannot figure out the solution to a particular question, designate some time to it at the end of the paper 

For additional resources to assist you in your Inter CA preparation, reach out to us.

Good Luck!

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