Commerce and accountancy is one of the most favorable optional subjects in commerce for UPSC aspirants with a commerce background. The topics included under commerce and accountancy optional for UPSC are accounting, cost accounting, taxation, auditing, financial management, financial markets, organizational theory and behaviour, human resource management and industrial relations.
In this article, we have discussed detailed syllabus for optional subjects in commerce and accountancy optional. We have also discussed the booklist and a topper-proof strategy for preparing this optional subject for UPSC Mains Exam. Let’s get started.
Table of Contents
Commerce and Accountancy Syllabus For UPSC
Listed below is the commerce and accountancy syllabus of Paper I and Paper II for UPSC Mains. Here’s an overview of the commerce and accountancy optional syllabus for Paper I.
| Commerce and Accountancy Optional Syllabus for Paper-I | |
| 1.1 | 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 |
| 1.2 | Accounting for Share Capital Transactions including Bonus Shares, Right Shares, Employees Stock Option and Buy-Back of Securities. |
| 1.3 | Preparation and Presentation of Company Final Accounts. Amalgamation, Absorption, and Reconstruction of Companies. |
| 2.1 | 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. |
| 2.2 | Methods of Costing: Job Costing, Process Costing, Activity Based Costing. Volume – cost – Profit Relationship as a tool of Profit Planning. |
| 2.3 | Incremental Analysis/ Differential Costing as a Tool of Pricing Decisions, Product Decisions, Make or Buy Decisions, Shut-Down Decisions, etc. |
| 2.4 | Techniques of Cost Control and Cost Reduction: Budgeting as a Tool of Planning and Control. Standard Costing and Variance Analysis. |
| 2.5 | Responsibility Accounting and Divisional Performance Measurement. |
| 3.1 | 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. |
| 3.2 | Set – Off and Carry Forward of Loss. |
| 3.3 | Deductions from Gross Total Income. Salient Features/Provisions Related to VAT and Services Tax. |
| 4.1 | Auditing:
Company Audit: Audit related to Divisible Profits, Dividends, Special investigations, Tax audit. |
| 4.2 | Audit of Banking, Insurance, Non-Profit Organizations and Charitable Societies/Trusts/Organizations. |
| 5.1 | Financial Management:
Finance Function: Nature, Scope, and Objectives of Financial Management: Risk and Return Relationship. Tools of Financial Analysis: Ratio Analysis, Funds-Flow, and Cash-Flow Statement. |
| 5.2 | Capital Budgeting Decisions: Process, Procedures and Appraisal Methods. Risk and Uncertainty Analysis and Methods. |
| 5.3 | Cost of capital: Concept, Computation of Specific Costs and Weighted Average Cost of Capital. CAPM as a Tool of Determining Cost of Equity Capital. |
| 5.4 | Financing Decisions: Theories of Capital Structure – Net Income (NI) Approach, Net Operating Income (NOI) Approach, MM Approach and Traditional Approach. Designing of Capital structure: Types of Leverages (Operating, Financial and Combined), EBIT- EPS Analysis, and other Factors. |
| 5.5 | Dividend Decisions and Valuation of Firm: Walter’s Model, MM Thesis, Gordan’s Model, Lintner’s Model. Factors Affecting Dividend Policy. |
| 5.6 | Working Capital Management: Planning of Working Capital. Determinants of Working Capital. Components of Working Capital Cash, Inventory and Receivables. |
| 5.7 | Corporate Restructuring with focus on Mergers and Acquisitions (Financial aspects only). |
| 6.1 | Financial Markets and Institutions:
Indian Financial System: An Overview Money Markets: Participants, Structure and Instruments. Commercial Banks. Reforms in Banking sector. Monetary and Credit Policy of RBI. RBI as a Regulator. |
| 6.2 | Capital Market: Primary and Secondary Market. Financial Market Instruments and Innovative Debt Instruments; SEBI as a Regulator. |
| 6.3 | Financial Services: Mutual Funds, Venture Capital, Credit Rating Agencies, Insurance and IRDA. |
Now, here’s an overview of the commerce and accountancy optional syllabus for Paper II.
| Commerce and Accountancy Optional Syllabus for Paper-II | |
| 1.1 | Organisation Theory:
Nature and Concept of Organisation; External Environment of Organizations -Technological, Social, Political, Economical and Legal; Organizational Goals – Primary and Secondary goals, Single and Multiple Goals; Management by Objectives. |
| 1.2 | Evolution of Organisation Theory: Classical, Neo-classical and Systems Approach. |
| 1.3 | Modern Concepts of Organisation Theory: Organisational Design, Organisational Structure and Organisational Culture. |
| 1.4 | Organisational Design–Basic Challenges; Differentiation and Integration Process; Centralization and Decentralization Process; Standardization / Formalization and Mutual Adjustment. Coordinating Formal and Informal Organizations. Mechanistic and Organic Structures. |
| 1.5 | Designing Organizational structures–Authority and Control; Line and Staff Functions, Specialization and Coordination. |
| 1.6 | Types of Organization Structure –Functional. Matrix Structure, Project Structure. Nature and Basis of Power, Sources of Power, Power Structure and Politics. Impact of Information Technology on Organizational Design and Structure. |
| 1.7 | Managing Organizational Culture. |
| 2.1 | Organisation Behaviour:
Meaning and Concept; Individual in organizations: Personality, Theories, and Determinants; Perception – Meaning and Process. |
| 2.2 | Motivation: Concepts, Theories and Applications. Leadership-Theories and Styles. Quality of Work Life (QWL): Meaning and its impact on Performance, Ways of its Enhancement. Quality Circles (QC) – Meaning and their Importance. Management of Conflicts in Organizations. Transactional Analysis, Organizational Effectiveness, Management of Change. |
| 3. | Human Resources Management (HRM) :
Meaning, Nature and Scope of HRM, Human Resource Planning, Job Analysis, Job Description, Job Specification, Recruitment Process, Selection Process, Orientation and Placement, Training and Development Process, Performance Appraisal and 360° Feed Back, Salary and Wage Administration, Job Evaluation, Employee Welfare, Promotions, Transfers and Separations. |
| 4.1 | Industrial Relations (IR):
Meaning, Nature, Importance and Scope of IR, Formation of Trade Unions, Trade Union Legislation, Trade Union Movement in India. Recognition of Trade Unions, Problems of Trade Unions in India. Impact of Liberalization on Trade Union Movement. |
| 4.2 | Nature of Industrial Disputes: Strikes and Lockouts, Causes of Disputes, Prevention and Settlement of Disputes. |
| 4.3 | Worker’s Participation in Management: Philosophy, Rationale, Present Day Status and Future Prospects. |
| 4.4 | Adjudication and Collective Bargaining. Industrial Relations in Public Enterprises, Absenteeism and Labour Turnover in Indian Industries and their Causes and Remedies. |
| 4.5 | ILO and its Functions |
How to prepare Commerce and Accountancy For UPSC
Here’s a topper-recommended strategy to prepare commerce and accountancy optional for UPSC:
1) Mind-Map the Syllabus and Previous Year Questions
The first step is to go through the syllabus extremely carefully and mind-map the topics. You should be able to filter out the syllabus-centric topics in order to avoid distractions. Next, go through the previous year questions as a lot of times they are repeated in different ways.
2) Practice the practical questions multiple times
The practical questions of the previous year are also important as they set the tune for the expected questions. Solve them multiple times so that you can attempt these questions in minimum time during the exam. Having adequate practice will also help in detecting errors while solving the questions during the exam.
3) Revise the theory part extensively
The theory part should be revised consistently to retain as much as possible. Paper-1 is a mix of theory and practical questions while Paper-2 is more on the theoretical side. Hence, stick to the syllabus and cover each topic comprehensively. In case of more challenging questions during the exam, your concept clarity is what will help you solve the questions.
4) Practice diagrams and flowcharts
Now, both the papers have a lot of diagrams and flowcharts that can provide you an edge if you incorporate them in your answers. So, make sure to incorporate relevant diagrams and flow charts in your answers and practise them well before the exam. Hence, practice them multiple times well before the exam. Make sure to incorporate relevant diagrams and flow charts in your answers.
5) Make your notes comprehensive
If you’re making handwritten notes, make sure they are comprehensive yet extremely to-the-point. Do not write long sentences and make them bulky and wordy. Consolidate your notes and constantly keep updating them with current affairs. This will help you at the time of revision and answer writing.
Booklist for Commerce and Accountancy for UPSC
Commerce and Accountancy is one of the preferred optional subjects in commerce for commerce graduates. The booklist used in graduation can be referred for preparing this subject. We have also provided the booklist for commerce and accountancy optional for UPSC as per the syllabus:
| Paper | Booklist |
| Paper 1 | 1. Accounting:
2. Cost accounting:
3. Auditing:
4. Income tax
5. Financial management:
6. Financial markets & institutions:
Periodicals
|
| Paper 2 | Section A: Organization Theory & Behavior
Section B: Human Resource Management
Industrial relations
Reports/publications of the central govt/govt committees concerning labour policy |
This was the syllabus of commerce & accountancy optional in detail. Keep a note of the syllabus and ensure to be syllabus-specific while preparing for this optional subject.
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Suggested Readings |
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| UPSC Optional Subjects List | UPSC Sociology Optional Syllabus | UPSC Geography Optional Syllabus | UPSC Philosophy Optional Syllabus | UPSC PSIR Optional Syllabus |
Frequently Asked Questions
What are the advantages of choosing commerce and accountancy optional for UPSC Mains?
If you already have familiarity with the topics of commerce and accountancy, choosing commerce and accountancy as an optional subject will help you save time. If you are good at solving numericals and covering the theory portion, then commerce and accountancy optional can be a scoring opportunity for you.
What is the success rate of commerce and accountancy optional?
The average success rate of commerce and accountancy optional has been 12-13% in recent years, although it can vary significantly each year. The success rate was 15% in 2021 and 12.9% in 2020.
Can someone from a non-commerce background take commerce and accountancy as an optional subject?
Yes, someone from a non-commerce background can opt for Commerce and Accountancy optional, but before doing so, consider your interest in the various topics of commerce such as accounting, taxation, auditing etc. As someone from a non-commerce background, you will have to spend considerably more time getting comfortable with these topics as compared to someone with a background in the subject. Hence, if you are not willing to work hard on these topics, this subject may become a liability. However, with adequate effort and time, even non-commerce background students can excel in this subject.
