CMA FOUNDATION – PAPER WISE PREPARATION TIPS
In this article, find CMA Foundation Preparation Tips.
Certified Management Accountant (CMA) is a professional certification credential in the management accounting and financial management fields. The certificate signifies that the person possesses knowledge in the areas of financial planning, analysis, control, decision support, and professional ethics. Here are some of the many titles that CMAs hold:
Staff Accountant, Cost Accountant, Internal Auditor, Budget Analyst, Financial Analyst, Senior Accountant, Finance Manager, Controller, Vice President, Finance Treasurer, Chief Financial Officer, Chief Executive Officer
These days there is a lot of confusion regarding the certifying institute and certification name.
So, to end your all confusion, Institute of Cost & Works Accountants of India (ICWAI) has changed its name into The Institute of Cost Management Accountants of India (ICMAI). Also, ICWA course has been renamed as CMA course. There is no difference between ICWAI and CMA, and they are the same. They are two different words used to describe one single thing.
The course has three stages:
Today we will discuss the CMA Foundation course in detail with topics and CMA Foundation preparation tips.
Students who have passed 10+2 are eligible for the CMA Foundation exam.
The Institute of Cost Accountants of India conducts CMA Foundation exam two times in a year in the months of June and December. If you have passed CMA Foundation exam, then only you are eligible for CMA Inter.
If you have any graduate degree, you are exempted from ICMAI Foundation exams. You can directly enter into CMA Inter.
|ICMAI Foundation Syllabus 2018|
|Paper 1: Fundamentals of Economics and Management (FEM)|
|Fundamentals of Economics||50%|
|Fundamentals of Management||50%|
|Paper 2: Fundamentals of Accounting (FOA)|
|Fundamentals of Financial Accounting||60%|
|Fundamentals of Cost & Management Accounting||40%|
|Paper 3: Fundamentals of Laws and Ethics (FLE)|
|Fundamentals of Commercial and Industrial Laws||80%|
|Fundamentals of Ethics||20%|
|Paper 4: Fundamentals of Business Mathematics and Statistics(FBMS)|
|Fundamentals of Business Mathematics||40%|
|Fundamentals of Business Statistics||60%|
Note: Subjects related to provisions of law/ applicable statutes shall be read with amendments made from time to time.
CMA Foundation Preparation Tips: Important Chapters and Topics to focus
Fundamentals of Economics and Management
- Group Dynamics
- Organizational Conflicts
- Basic Accounting Terms
- Generally Accepted Accounting Principles
- The Concepts of “Account”, “Debit” & “Credit”
- Public Private Partnership (PPP) model
- Fredrick Taylor (1856-1915): Principles of Scientific Management
- Henri Fayol (1841-1925): Principles and Techniques of Management
- Bureaucratic Management (Max Weber)
- Planning, Forecasting, Decision-Making, Organizing, Communication, Controlling, Co-ordination
- Gresham’s Law
- Quantity theory of Money
- Financial Institutions
- Applications on National Income, Money and Banking
- Basic Characteristics of the Indian Economy as developing country
- Economic Development & Environmental Degradation
- Definition & Scope of Economics, Demand, Supply, Theory of Production, Theory of Cost
- Concepts of Total Revenue, Average Revenue & Marginal Revenue
- Applications on Basic Concepts of Economics and Market
- Concept of National Income, Gross Income, GDP, growth rate.
Fundamentals of Accounting
When it comes to fundamentals of accounting all the accounting terms are very important. Understand the entries and logic behind the transactions rather than mugging them up. Without the basics it becomes difficult to understand the topics which one has to face later on.
One should prepare for types of accounts, accounting equation, the whole accounting process, capital and revenue transaction. One should also understand cash and accrual basis of accounting at the basic level.
Apart from these there has to be thorough knowledge on
- Accounting Standards
- Single entry and double entry system
- Measurement and Valuation
- Trial Balance and its Formulation
- Opening and Closing Entries
- Bank Reconciliation
- Methods of Depreciation
- Depreciation and Nature of Depreciation
- Profit and Loss of Sale and Purchases of Assets
- Preparation of Financial Statements
- Bill of Exchanges and their Types
- Discounting of Bill and Types
- Generally Accepted Cost Accounting Principles
- Methods of Costing
- Cost determination
- Cost sheet preparation and estimation
- Marginal Costing
- Cost Volume Profit Relationship
However, these topics are not exhaustive and one should have thorough knowledge of all the topics irrespective of the question paper trends.
Fundamentals of Commercial Laws & Ethics
- Indian Contract Act, 1872 – Everything is important as this is the base of Indian laws.
- The Sale of Goods Act, 1930 – All concepts, definitions and sections
- The Negotiable Instruments Act, 1881-Concepts and definitions
- Liability of Parties
- Discharge of a Negotiable Instrument
- The Indian Partnership Act, 1932 – concept & definitions
- Rights and Duties of Partners
- Dissolution of Firm
- The Payment of Wages Act, 1936
- The Minimum Wages Act
- The Employees State Insurance Act, 1948 – Concept & Definitions
- Registration of Factories and Establishments
- Administration of the Scheme of Insurance
- ESI Benefits
- Prohibited Occupations
- Ethics and Moral
- Business Ethics
- Nature of Ethics as Moral
- Penal Provisions Under Section 84 to 86 of ESI Act, 1948
- The Child Labor (Prohibition and Regulation) Act, 1986
- Regulation of Conditions of Works of Children
- The Factories Act, 1948 – Concepts, Definition, Scope and Objectives
- General Duties of the
- Working Hours of Adults
Fundamentals of Business Mathematics and Statistics
- Ratio and Proportion
- Discounting of Bills
- Mathematical Reasoning
- Permutation and Combination
- Diagrammatic Representation of Data and Charts
- Measures of Central Tendency
- Correlation and Regression
- Value Index Number
- Time Series – General concepts
- Least Squares
- Frequency Distribution
- Measurement of Probability
- Theorems of Probability
- Theoretical Distribution
- Binomial Distribution
The tips above are not exhaustive and one should just emphasize more on these while preparing for the whole syllabus.
CMA Foundation requires a mix of technical and conceptual skills. The aim should not be to score a rank but to solve as many as questions correctly in stipulated time. Time management is important with 100% dedication.
Some basic CMA Foundation Preparation Tips
Be clear with the syllabus
Prepare set of short notes and refer them regularly
Remember Key Highlights and Points of any chapter
Understand concepts – Use Logic and do not memorize
Online platforms – Leverage free or reasonable study material online
Prepare a Formulae bank and revise regularly
Practice previous question papers
Stay away from rumors and social media
Take short breaks
Talk to a mentor – can be friend, teacher or anyone else
Use your time wisely. All the very best for the examinations!!