Financial Accounting is the first accounting paper a B.Com student writes, and for many it is the first time they meet ledgers, adjustments and balance sheets. This guide is for first-semester students at Dr. Manmohan Singh Bengaluru City University (BCU) studying under the State Education Policy (SEP) scheme. The paper is common to B.Com Regular, B.Com (Accounting and Finance), B.Com (Business Data Analytics) and the other B.Com programmes listed on the question paper.
If you need a tutor for Financial Accounting, connect with Facultix. Classes are online, offline, at home or in small groups, and follow the SEP syllabus.
First, make sure you are practising the right syllabus
Students often pick up old question papers from seniors without checking the scheme printed at the top. BCU's first-semester Financial Accounting paper changed when the SEP scheme came in for students admitted from 2024-25.
The older NEP papers (2022 to 2025) asked about manufacturing accounts, royalty accounts and final accounts from a trial balance. None of these is in the SEP syllabus. The SEP paper instead has conversion of single entry to double entry, hire purchase, and branch accounts under the debtors system. Old NEP papers are still useful for accounting concepts, accounting equations, consignment and branch accounts, but skip their royalty and manufacturing questions.
Look for "SEP" on the paper you practise from. The older CBCS papers (before NEP) are a good source of extra practice for single entry, hire purchase and branch problems, because those topics were in that syllabus too.
The SEP syllabus in five modules
| Module | What it covers | What to practise |
|---|---|---|
| 1. Theoretical framework of accounting | Meaning, users and functions of accounting, terms used, cash and accrual basis, branches of accounting, concepts and conventions, Indian Accounting Standards (Ind AS) | Short definitions, five accounting concepts with examples, accounting equations |
| 2. Conversion of single entry to double entry | Incomplete records, statement of affairs, cash book, total debtors and total creditors accounts, bills receivable and payable accounts, final accounts | Finding missing figures (credit sales, credit purchases, opening capital), then the full Trading and Profit and Loss Account and Balance Sheet |
| 3. Consignment accounts | Consignor and consignee, account sales, pro forma invoice, goods at cost and at selling price, normal and abnormal loss, valuation of stock | Consignment account, consignee's account, abnormal loss account and closing stock, in the consignor's books only |
| 4. Hire purchase system | Hire purchase and instalment purchase, cash price, hire purchase price, interest | Interest in each instalment, and ledger accounts in the hire purchaser's books under the asset accrual method only |
| 5. Branch accounts | Dependent, independent and foreign branches, the debtors system | Branch account in head office books, with goods sent at cost and at invoice price |
How the paper is set
The first SEP paper, in January/February 2025, was a 3-hour paper for 80 marks:
| Section | What you answer | Marks |
|---|---|---|
| A | Any 5 of 8 short questions, 2 marks each | 10 |
| B | Any 4 of 6 questions, 5 marks each | 20 |
| C | Any 3 of 5 problems, 15 marks each | 45 |
| D | 1 compulsory question, 5 marks | 5 |
Section C carries more than half the paper, and its problems come from Modules 2 to 5. Plan your preparation around the long problems, and pick up Sections A and D from theory and formats.
What the first SEP paper asked, module by module
Module 1 came up in short answers and 5-mark questions: defining accounting, explaining a concept such as business entity, explaining any five accounting concepts, and preparing an accounting equation from five or six transactions.
Module 2 was the heaviest. It had short questions on the meaning and types of single entry, a 5-mark problem finding credit sales from the debtors' figures, a full 15-mark problem preparing the Trading and Profit and Loss Account and Balance Sheet from incomplete records, a part question finding total purchases from the creditors' figures, and the compulsory Section D question on a statement of affairs.
Module 3 had a short question on del credere commission, a 5-mark closing stock calculation with normal wastage, and a 15-mark problem preparing the consignor's ledger accounts with selling expenses, commission and goods destroyed in the godown with an insurance claim.
Module 4 had a short question on hire purchase price, a 5-mark problem on the interest in each instalment, and a 15-mark problem preparing the hire purchaser's ledger accounts under the asset accrual method with depreciation.
Module 5 came up in three places: a short question on the objectives of branch accounting, a 5-mark branch account, and two branch accounts in Section C.
Three of the five long problems came from single entry and branch accounts. A student who is confident in those two modules has a choice in Section C even if another topic goes badly.
A study order that works
- Start with Module 1 and accounting equations. The theory is short, and accounting equations train you to see every transaction as a change in assets, liabilities and capital. This habit makes every later module easier.
- Move to Module 2 and learn the missing-figure accounts. Credit sales comes from the total debtors account, credit purchases from the total creditors account, opening capital from the opening statement of affairs, and a missing cash balance from the cash book. Once you can find these, the full problem is a set of ordinary final accounts.
- Then consignment. Practise the consignment account and the consignee's account together until the commission and the balance due agree every time.
- Then hire purchase. Draw up the interest working first, then the asset, vendor, interest and depreciation accounts year by year.
- Finish with branch accounts. Do a problem with goods at cost, then the same type with goods at invoice price, so you see exactly what the loading entries change.
- Keep the last two weeks for full papers. Write one SEP paper in 3 hours, without notes, and mark it honestly.
Mistakes that cost marks
- On consignment, closing stock is valued at cost plus a proportionate share of the consignor's expenses and the consignee's non-recurring expenses, such as freight and unloading. Leave out selling expenses like godown rent, advertisement and salesmen's salary.
- Normal and abnormal loss are treated differently. Normal loss is not written off separately; it raises the cost of the goods that remain. Abnormal loss is valued at cost plus a proportionate share of expenses, credited to the consignment account, and the insurance claim is set against it.
- Hire purchase interest is charged on the outstanding cash price, not on the instalment. Under the asset accrual method, the asset goes into the books at its full cash price on day one, and depreciation is worked out from that cash price (on the written-down value in later years when the diminishing balance method is given).
- When the hire purchase interest rate is not given, the total interest is the hire purchase price minus the cash price, and it is spread across the years in the ratio of the amounts outstanding.
- A statement of affairs is prepared from incomplete records to find capital; a balance sheet comes from complete double-entry books. In Section D, prepare it in proper form with imaginary figures and show capital as the balancing figure.
- In branch accounts, when goods are sent at invoice price, the extra over cost has to be adjusted, or the branch profit comes out wrong.
- Show every working note. In a 15-mark problem, clear workings can earn step marks even when the final figure is off.
Practise from the textbook, then from papers
Work through the solved problems in your textbook for each module before you attempt question papers. Then use the SEP paper for timing, and the older CBCS papers for extra single entry, hire purchase and branch problems.
If you are stuck on a module, a few one-to-one classes before the exam can save weeks of trying alone. Facultix tutors teach BCU's first-semester Financial Accounting to the SEP syllabus, online, offline, at home or in small groups.