CFA Program Financial Accounting (Text Book) - Study Plan

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1 CFA Program Financial Accounting (Text Book) - Study Plan S.No 1. Introduction to Accounting and Financial Statements The meaning of Accounting Attributes of Accounting Output of accounting process Use of financial Statements Generally Accepted Accounting Principles 2. The Accounting Process Basics of accounting mechanics Types of Accounts Rules of Accounts Books of Account - Recording of transaction in journal - Maintenance of special journals Posting of transactions in the Ledger 3. Trial Balance and Adjustments Extracting the Trial balance from ledger balances Error types and detection Rectification of Errors Passing of Different Adjustment Entries 4. Preparation of Financial Statements Understanding Capital and Revenue expenditure Preparation of Trading and Profit and Loss Account Preparation of Balance Sheet 5. Accounting of Inventories Inventory Pricing for Raw materials, work-in-progress and finished goods Valuation of inventories under different methods Cost of inventory Valuation of Inventory in special circumstances International valuation and treatment of Inventory 6. Measurement and Recognition of Income & Expense Principles of Revenue Recognition Methods of Revenue Recognition Revenue Recognition in different cases International treatment of Revenue Recognition 7. Accounting of Long-Lived Assets Capitalization versus Expensing Method of Depreciation - Changes in method of Depreciation Disclosures for Depreciation Component costs of Fixed assets Valuation of Fixed Assets in Special Cases - International Treatment of Fixed Assets accounting Treatment of Borrowing Costs 8. Accounting of Intangible Assets Introduction to Intangible Assets - valuation of Goodwill International Treatment of Goodwill - Accounting for Patents, Trademarks, Copyrights and Know-how - Accounting for Software Development Costs - International Treatment of Research & Development Costs Read Chapter I of FA Vol I (TB) Read Chapter III of FA Vol I (TB) Read Chapter IX of FA Vol I (TB) Read Chapter X and XI of FA Vol I (TB) Read Chapter V of FA Vol I (TB) Read Chapter VI of FA Vol I (TB) Read Chapter VII of FA Vol I (TB) Read Chapter I of FA Vol II (TB) 1

2 9. Principal Financial Statements Requirements as to annual Accounts Contents of income statements and Balance Sheet Treatment of special items Financial Reporting - Disclosures of Accounting Policies Fundamental Errors and Changes in Accounting Policies Events occurring after Balance Sheet Date 10. s of Financial Information Boards Report Requirements as to Presentation of Financial Statements Auditors and Audit Report Read Chapter IV of FA Vol II (TB) Read Chapter V of FA Vol II (TB) 2

3 CFA Program Financial Accounting (WorkBook) - Study Plan Chp No. 1. Introduction to Accounting and Financial Statements The meaning of Accounting Attributes of Accounting Output of accounting process Use of financial Statements Generally Accepted Accounting Principles 2. The Accounting Process Basics of accounting mechanics Types of Accounts Rules of Accounts Books of Account - Recording of transaction in journal - Maintenance of special journals Posting of transactions in the Ledger 3. Trial Balance and Adjustments Extracting the Trial balance from ledger balances Error types and detection Rectification of Errors Passing of Different Adjustment Entries 4. Preparation of Financial Statements Understanding capital and revenue expenditure Preparation of Trading and Profit and Loss Account Preparation of Balance Sheet 5. Accounting of Inventories Inventory Pricing for Raw materials, work-in-progress and finished goods Valuation of Inventories under different methods Cost of inventory Valuation of Inventory in special circumstances International valuation and treatment of Inventory 6. Measurement and Recognition of Income & Expense Principles of Revenue Recognition Methods of Revenue Recognition Revenue Recognition in different cases International treatment of Revenue Recognition 7. Accounting of Long-Lived Assets Capitalization versus Expensing Method of Depreciation - Changes in method of Depreciation Disclosures for Depreciation Component costs of Fixed assets Valuation of Fixed Assets in Special Cases - International Treatment of Fixed Assets accounting Treatment of Borrowing Costs 8. Accounting of Intangible Assets Introduction to Intangible Assets - Valuation of Goodwill International Treatment of Goodwill - Accounting for Patents, Trademarks, Copyrights and Know-how - Accounting for Software Development Costs - International Treatment of Research & Development Costs Read Introduction to Accounting and Financial Statements; Part-I & Part-II of Vol.I (WB) Read Accounting Mechanics: Basic Records; Part-I & Part- II of Vol.I (WB) Read Preparation of Financial Statements Trial Balance and Adjustments; Part-I & Part-II of Vol.I (WB) Read Preparation of Financial Statements Profit and Loss Account and Balance Sheet; Part-I & Part-II of Vol.I (WB) Read Accounting of Inventories; Part-I & Part-II of Vol.I (WB) Read Accounting for Receivables; Part-I & Part-II of Vol.I (WB) Read Accounting for Fixed Assets; Part-I & Part-II of Vol.I (WB) Read Accounting of Intangible Assets; Part I & Part II of Vol II (WB) 3

4 9. Principal Financial Statements Requirements as to Annual Accounts Contents of Income statements and Balance Sheet Treatment of special items Financial Reporting - Disclosures of Accounting Policies Fundamental Errors and Changes in Accounting Policies Events occurring after Balance Sheet Date 10. s of Financial Information Boards Report Requirements as to Presentation of Financial Statements Auditors and Audit Report Read Preparation of Financial Statements of Limited Companies; Part I & Part II of Vol II (WB) Read Statutory Audit and Annual Reports; Part I & Part II of Vol II (WB) The Model Question Papers in Part III of these workbooks are provided to give students a fair idea of the examination pattern. Students are requested to attempt only those questions relevant to the chapters that are included in their study plan. 4

5 CFA Program Economics (Workbook) Study Plan Chapter No. Micro Economics Work Book 1. Market Forces of Supply and Demand Read Supply and Demand Analysis in Part I and Part II of Micro Economics Work Book Determinants of individual demand- Determinants of individual supply- Equilibrium price-analyzing changes in equilibrium-how prices allocate resources 2. Elasticity Read Supply and Demand Analysis in Part I and Part II of Micro Economics Work Book Determinants of price elasticity of demand- Determinants of price elasticity of supply- Microeconomic government policies-analysisof price ceilings-analysis of price floors- Market efficiency 3. Consumer Behavior and Analysis Read Consumer Behavior Analysis in Part I and Part II of Micro Economics Work Book Utility Theory- Law of Diminishing Marginal Utility- Downward Slope of Demand Curve- Substitution Effect and Income Effect- Derivation of Market Demand- Types of Demand, Paradox of Value- Consumer Surplus, Consumer Equilibrium- Indifference Curves- Indifference Curve Analysis- Equilibrium Position of Tangency- Deriving the Demand Curve through Indifference Curve- Income Consumption Curve 4. The Firm and Industry Organization Read Production Analysis, Analysis of Costs, Market Structure I Perfect Competition, Market Structure II Monopoly, Market Structure III Monopolistic Competition, Market Structure IV Oligopoly in Part I and Part II of Micro Economics Work Book and Pricing Factors of Production in Part I of Micro Economics Work Book 5

6 Chapter No. Organization of the business firm-basic types of business firms-costs of production-opportunity cos- explicit cost and implicit cost-accounting cost versus opportunity cost-the production function-fixed and variable costs-average and marginal cost-cost curves and their shapes- Diminishing returns and cost curves-output and costs in the long run- Firms in competitive markets-definition of competition-revenue of a competitive firm-profit maximization for the competitive firm-accounting profit and economic profit-the competitive firm s supply curve-the supply curve in a competitive market-monopoly-barriers to entry (e.g., economics of scale, government licensing, patents, control of essential resources) How monopolies make production and pricing decisions-public policy and monopolies Oligopoly Duopoly- Equilibrium for an oligopoly- Game theory and the economics of cooperation- Monopolistic competition-price and output in competitive markets with differentiated products- Allocative efficiency in monopolistic competition 5. Supply and Demand for Productive Resources Read Production Analysis, Market Structure IV : Oligopoly in Part I and Part II of Micro Economics Work Book and Pricing Factors of Production in Part I of Micro Economics Work Book Demand for resources-marginal productivity and the firm s hiring decision-supply, demand, and resource prices 6

7 Chapter No. Macro Economics Work Book 6. Measuring National Income Read Measurement of Macroeconomic Aggregates in Part I and Part II of Macro Economics Work Book Concept of national-national incomeaccounting- Measuring national income and price, Gross Domestic Product (GDP)- components of GDP-Real versus nominal GDP, -GDP deflator-using the GDP deflator to derive real GDP- The consumer price index-problems with GDP as a measure of national product 7. Economic Growth Read Economic Growth, Development in Part I and Part II of Macro Economics Work Book Main factor of economic growth-saving rate/capital- Theory of economic growth- Capital accumulation and economic growth- Technological innovation and economic growth- Business cycles- Theory of exogenous business cycle- Theory of endogenous business cycle- Population growth- Human resources and economic growth- Physical capital-6.3 Human capital-technological progress- Institutional environment (e.g.- property rights, political stability, competitive markets, stable money and price, an open economy, moderate marginal tax rates). 8. Economic Fluctuations and Unemployment Read Economic Fluctuations and Unemployment in Part I of Macro Economics Work Book Descriptive terms in business cycle analysis- Index of leading economic indicators-types of unemployment- Problems of measuring unemployment 9. Equilibrium in the real market Read Measurement of Macro Economic Aggregates, The Simple Keynesian Model of Income Determination, Income Determination Model including Money and Interest and Modern Economics: Fiscal Policy, Budget Deficit and the Government in Part I and Part II of Macro Economics Work Book 7

8 Chapter No. Consumption-Consumption function- Investment-Investment function-government expenditure- Government revenue and Expenditure- Effect of government expenditure and tax on national income- Government expenditure and crowding-out effect- Equilibrium relationship in the good/service market: IS curve 10. Aggregate Demand and Aggregate Supply Read Fundamental of Aggregate Demand and Aggregate Supply, Aggregate Supply Price Level and Employment: Macroeconomic Equilibrium in the Classical Model, Aggregate Supply Price Level and Employment: Macroeconomic Equilibrium in Keynesian Model and Post Keynesian Macroeconomics in Part I of Macro Economics Work Book The aggregate demand curve-reasons for downward sloping aggregate demand curve (e.g., wealth effect, interest rate effect, exchange rate effect)-shifts in the aggregate demand curve-the aggregate supply curve- Short-run aggregate supply curve, Long-run aggregate supply curve- Shifts in the short-run aggregate supply curve 11. Equilibrium in the Money Market Read Income Determination Model including Money and Interest, Money Supply and Banking System, Aggregate Supply Price Level and Employment: Macroeconomic Equilibrium in the Classical Model, Aggregate Supply Price Level and Employment: Macroeconomic Equilibrium in Keynesian Model and Post Keynesian Macroeconomics and Modern Economics: Fiscal Policy, Budget Deficits and the Government Debt in Part I of Macro Economics and, Aggregate Supply Price Level and Employment: Macroeconomic Equilibrium in Keynesian Model in Part II of Macro Economics Work Book 8

9 Chapter No. Demand for Money- Equilibrium relationship in the monetary market-lm Curve- The Monetary System-Roles of Central Bank- Tools of money control-open market operations- reserve requirements- Discount rate- Inflation: Causes and Consequences Causes of inflation- Quantity theory of money- Fiscal/monetary policy and business cycle-deflation/stagflation The influence of monetary policy on aggregate demand-money supply and money demand Transmission of monetary policy-unanticipated expansionary monetary policy- Unanticipated-restrictive monetary policy- Timing of monetary policy-anticipated monetary policy-the influence of fiscal policy on aggregate demand- fiscal/monetary policy and business cycle- Monetary policy-target of monetary policy-instruments of monetary policy-transmission effect of monetary policy on real economy -Fiscal policy and the crowding-out effect 12. Open Macro Economics Read the Relevant Portion of Part I and Part II of Macroeconomics Workbook Balance of payments-current-account transactions- Capital-account transactions- Government s intervention and money supply- Determination of equilibrium in the open economy -Open macroeconomics model, effect of fiscal policy, effects of monetary policy The Model Question Papers in Part III of these workbooks are provided to give the students a fair idea of the examination pattern. Students are expected to attempt only those questions relevant to the chapters that are included in their study plan Note: Also read Introduction to Micro Economics in Part I of Micro Economics Work Book and Macro Economic Analysis An over view in Part I of Macro Economics Work Book. The following Chapter need not be read in part I and part II. Trade and Exchange Rate Policies. 9

10 CFA Program Economics (Textbook) Study Plan Chapter No. Microeconomics 1. Market Forces of Supply and Demand Read Chapter II of Micro Economics Determinants of individual demand- Determinants of individual supply- Equilibrium price-analyzing changes in equilibrium-how prices allocate resources 2. Elasticity Read Chapter II and Chapter VI of Micro Economics Determinants of price elasticity of demand- Determinants of price elasticity of supply- Microeconomic government policies-analysisof price ceilings-analysis of price floors- Market efficiency 3. Consumer Behavior and Analysis Read Chapter III of Micro Economics Utility Theory- Law of Diminishing Marginal Utility- Downward Slope of Demand Curve- Substitution Effect and Income Effect- Derivation of Market Demand- Types of Demand, Paradox of Value- Consumer Surplus, Consumer Equilibrium- Indifference Curves- Indifference Curve Analysis- Equilibrium Position of Tangency- Deriving the Demand Curve through Indifference Curve- Income Consumption Curve 4. The Firm and Industry Organization Read Chapter IV Chapter VI, Chapter VII, Chapter VIII, Chapter IX, Chapter X of Micro Economics Organization of the business firm-basic types of business firms-costs of production- Opportunity cos- explicit cost and implicit cost- Accounting cost versus opportunity cost-the production function-fixed and variable costs- Average and marginal cost-cost curves and their shapes-diminishing returns and cost curves-output and costs in the long run- Firms in competitive markets-definition of competition-revenue of a competitive firm- Profit maximization for the competitive firm- 10

11 Chapter No. Accounting profit and economic profit-the competitive firm s supply curve-the supply curve in a competitive market-monopoly- Barriers to entry (e.g., economics of scale, government licensing, patents, control of essential resources)- How monopolies make production and pricing decisions-public policy and monopolies- Oligopoly Duopoly- Equilibrium for an oligopoly- Game theory and the economics of cooperation- Monopolistic competition-price and output in competitive markets with differentiated products- Allocative efficiency in monopolistic competition 5. Supply and Demand for Productive Resources Read Chapter IV, Chapter IX and Chapter X of Micro Economics MACROECONOMICS Demand for resources-marginal productivity and the firm s hiring decision-supply, demand, and resource prices 6. Measuring National Income Read Chapter III of Macro Economics Concept of national-national incomeaccounting- Measuring national income and price, Gross Domestic Product (GDP)- components of GDP-Real versus nominal GDP, -GDP deflator-using the GDP deflator to derive real GDP- The consumer price index-problems with GDP as a measure of national product 7. Economic Growth Read Chapter XII and Chapter XVI of Macro Economics Main factor of economic growth-saving rate/capital- Theory of economic growth- Capital accumulation and economic growth- Technological innovation and economic growth- Business cycles- Theory of exogenous business cycle- Theory of endogenous business cycle- Population growth- Human resources and economic growth- Physical capital-6.3 Human capital-technological progress- Institutional environment (e.g.- property rights, political stability, competitive markets, stable money and price, an open economy, moderate marginal tax rates). 11

12 Chapter No. 8. Economic Fluctuations and Unemployment Read Chapter XI of Macroeconomics Descriptive terms in business cycle analysis- Index of leading economic indicators-types of unemployment- Problems of measuring unemployment 9. Equilibrium in the real market Read Chapter III, Chapter IV, Chapter V, Chapter XIV of Macroeconomics Consumption-Consumption function- Investment-Investment function-government expenditure- Government revenue and Expenditure- Effect of government expenditure and tax on national income- Government expenditure and crowding-out effect- Equilibrium relationship in the good/service market: IS curve 10. Aggregate Demand and Aggregate Supply Read Chapter VI, Chapter VIII, Chapter IX and Chapter X of Macroeconomics The aggregate demand curve-reasons for downward sloping aggregate demand curve (e.g., wealth effect, interest rate effect, exchange rate effect)-shifts in the aggregate demand curve-the aggregate supply curve- Short-run aggregate supply curve, Long-run aggregate supply curve- Shifts in the short-run aggregate supply curve 11. Equilibrium in the Money Market Read Chapter V, Chapter VII, Chapter VIII, Chapter IX, Chapter X, Chapter XII and Chapter XV of Macro Economics Demand for Money- Equilibrium relationship in the monetary market-lm Curve- The Monetary System-Roles of Central Bank- Tools of money control-open market operationsreserve requirements- Discount rate- Inflation: Causes and Consequences Causes of inflation- Quantity theory of money- Fiscal/monetary policy and business cycle-deflation/stagflation The influence of monetary policy on aggregate demand-money supply and money demand Transmission of monetary policy- Unanticipated expansionary monetary policy- 12

13 Chapter No. Unanticipated-restrictive monetary policy- Timing of monetary policy-anticipated monetary policy-the influence of fiscal policy on aggregate demand- fiscal/monetary policy and business cycle- Monetary policy-target of monetary policy-instruments of monetary policy-transmission effect of monetary policy on real economy -Fiscal policy and the crowding-out effect 12. Open Macro Economics Read Chapter VIII, Chapter IX, Chapter X, Chapter XIII, Chapter XIV and Chapter XV of Macroeconomics Balance of payments-current-account transactions- Capital-account transactions- Government s intervention and money supply- Determination of equilibrium in the open economy -Open macroeconomics model, effect of fiscal policy, effects of monetary policy Note: Read Chapter I of Micro Economics for an introduction to micro economics and Read Chapter I and II of Macro economics for an overview of macroeconomic analysis. The following chapters in the text book Macroeconomics are not to be read Chapter XVII Trade and Exchange Rate Policies, Chapter XVIII Technology Policy, and Chapter XIX Industrial Structure and Policy does not. 13

Foundations of Economics 5 th Edition, AP Edition 2011

Foundations of Economics 5 th Edition, AP Edition 2011 A Correlation of 5 th Edition, AP Edition 2011 Advanced Placement Microeconomics and Macroeconomics Topics AP is a trademark registered and/or owned by the College Board, which was not involved in the