3RD EDITION 

PAPER 2-ACCOUNTING &FINANCE FOR BANKERS

MODULE -I BUSINESS MATHEMATICS AND FINANCE

Calculation of Interest and Annuities

on  Simple Interest & Compound Interest: Calculation of Equated Monthly Installments Fixed and

Floating Interest Rates: Calculation of Annuities: Interest Calculation using Products

of a Debt; Sinking Funds

ebt. Definition, Meaning & Salient Features: Loans: Introduction to Bonds: Terms associated with Bonds:

Cost of Debt Capital: Bond value with semi-annual Interest: Current Yield on Bond: Calculation or to

Maturity of Bond: Theorems for Bond Value: Duration of Bond: Properties of Duration: Bond Price Volatility

Capital Budgeting

Present Value and Discounting: Discounted Technique for Investment Appraisal: Internal Rate of Return (IRR):

Method of Investment Appraisal; NPV and IRR compared; Investment Opportunities with Capital Rationing:

Investment Decision making under condition of uncertainty: Expected NPV Rule, Risk Adjusted Discount

Rate Approach for NPV Determination; Sensitivity Analysis for NPV Determination: Decision Tree Analysis

for NPV Estimation: Payback Methods: ARR.

Depreciation and its Accounting

Depreciation, its types and methods: Comparing Depreciation Methods

Foreign Exchange Arithmetic

Fundamentals of Foreign Exchange: Forex Markets: Direct and Indirect Quote: Some Basic Exchange Rate

Arithmetic - Cross Rate, Chain Rule, Value date, etc.; Forward Exchange Rates Forward Points: Arbitrage:

Calculating Forward Points: Premium/discount, etc.

MODULE B - PRINCIPLES OF BOOKKEEPING & ACCOUNTANCY

Definition, Scope and Accounting Standards

Nature and Purpose of Accounting: Historical Perspectives: Origins of Accounting Principles: Accounting

Standards in India and its Definition and Scope: Generally Accepted Accounting Principles of USA

(US GAAP): Transfer Pricing: Overview of IFRS: Difference between GAAP & IFRS.

Basic Accountancy Procedures

Concepts of Accountancy: Going Concern Entity: Double Entry System: Principle of Conservatism: Revenue

Recognition and Realisation; Accrual and Cash Basis.

Maintenance of Cash/Subsidiary Books and Ledger

Parod Keeping Basics; Account Categories, Debit and Credit Concepts: Accounting and Columnar Accounting

Mechanics: Journals; Ledgers: subsidiary books: ete.

Bank Reconciliation Statement

Need for Bank Reconciliation: Causes of Differences, Preparation of Bank Reconciliation Statement: How

to prepare a Bank Reconciliation Statement when Extracts of Cash Book and Pass Book are given, Adjusting

the Cash Book Balance: Advantages of Bank Reconciliation Statement.

of Trial Balance and Preparation

ation of Errors: Rectification

e closed; Adjusting and

Revenue Expenditure: Receipts;

Trial Balance, Rectification of Errors and Adjusting & Closing Entries

Meaning of a Trial Balance: Features and Purpose of a Trial Balance; Types of Trial Balan

afa Trial Balance; Disagreement of a Trial Balance; Classification of Errors: Location of Era

of Errors: Suspense Account and Rectification: Rectification of Errors when Books are close

Closing Entries

Capital and Revenue Expenditure

Expenditure: Distinction between Capital and Revenue Expenditure; Deferred Revenue Expenditure

General Illustrations.

Bills of Exchange

Types of Instruments of Credit: Term and Due Date of a Bill: Certain Important Terms: Acco

to be Passed: Accommodation Bill etc.

in Important Terms; Accounting Entries

MODULE C - FINAL ACCOUNTS

Balance Sheet Equation

Balance Sheet Equation; Computation of Balance Sheet Equation.

Preparation of Final Accounts

Preparation of Trading A/C: Profit and Loss A/C: Profit & Loss Appropriation Account; Balance Sheets

Ratio Analysis

Meaning of Accounting Ratios; Classification of Ratios; Uses of Accounting Ratios: Limitations of Acco

Ratios: Calculation and interpretation of various Ratios; Different Users and their Use of Ratios.

Final Accounts of Banking Companies

Definition and Functions of a Bank; Requirements of Banking Companies as to Accounts and Audit; Significant

Features of Accounting Systems of Banks: Principal Books of Accounts; Preparation and Presentation of

Financial Statements of Banks: CMA Format; Accounting Treatment of Specific Items; Preparation of Profit

and Loss Account; Comments on Profit and Loss Account; Important Items of Balance Sheet; Disclosure

Requirements of Banks: Additional Disclosures prescribed by RBI: Disclosures required under BASEL norms

Company Accounts I & II

Definition and Types of Companies: Distinction between Partnership and Limited Liability Company: Classes

of Share Capital; Issue of Shares: General Illustrations

Non-voting Shares; Form of Balance Sheet: Legal Requirements for Assets: Legal Requirements for Liabilities:

Legal Requirements for Profit & Loss Alc; Preparation of Final Accounts

Accounting in a Computerized Environment

Meaning, Features of and Terms used in Computerized Accounting: Difference between Computerized and

Manual Accounting: Advantages and Disadvantages of Computerized Accounting: Functions performed by

Computerized Accounting Softwares available in the Market: Computerization - Scope and Experiences in

Banking: The Core Banking Components: Information Security: Internet and World Wide Web -- Influences

on Banking

MODULE D - BANKING OPERATIONS

Banking Operations & Accounting Functions

Preparation of Vouchers, cash receipt and payment entries, clearing inward and outward entre

debit and credit entries, what is KYC and what are the different documents to satisfy KY V

duthenticity of documents, operational aspects in regard to opening of all types of accounts, su

Ppications/documents, allowing drawals and accounting entries involved at various stage

S environment etc.. Back office operations in banks, handling of unree

outward entries, transfer

STY KYC, verify KYC and

nis, scrutiny of loan

us stages, operational

moming of unreconciled entries in banks