CA Foundation Accounting Paper Solutions Sep 2025 | Detailed Answers & Analysis
CA Foundation Accounting Paper Solutions Sep 2025 with detailed answers, step-by-step explanations, and paper analysis to help you review concepts, verify answers, and prepare effectively for upcoming exams.
Ananya Gupta16 Dec, 2025
CA Foundation Accounting Paper Solutions Sep 2025 provide a clear and detailed breakdown of the complete Accounts paper, helping students understand every concept, adjustment, and practical question asked in the exam.
These solutions offer step-by-step explanations, question-wise analysis, and insights based on the official pattern, making it easier for aspirants to revise the syllabus and evaluate their performance effectively. Whether you're checking answers or preparing for the next attempt, these solutions give you a solid understanding of the Accounting principles tested in the September 2025 exam.
CA Foundation Accounting Paper Solutions Sep 2025
CA Foundation Accounts Detailed Solutions Sep 2025 are provided below to help students clearly understand the concepts and methods used in the exam.
These detailed solutions explain each question step by step, making it easier to verify answers, learn the correct approach, and strengthen your understanding of the Accounting concepts tested in the September 2025 attempt. Below are the complete solutions for your reference.
CA Foundation Sep 2025 Accounts Paper Analysis
The structure of the CA Foundation Accounting paper is standardised:
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The total paper consists of six questions.
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Question 1 is mandatory (compulsory).
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Candidates are required to attempt any four out of the remaining five questions (Question 2 to Question 6).
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Each full question carries 20 marks, often broken down into sub-parts.
The paper included a mix of theoretical concepts, accounting principles, and practical problems covering key areas such as True/False with Reasons, Valuation Principles, Subsidiary Books (Purchase Book), Depreciation, Non-Profit Organisations (NPO), Bills of Exchange, and Manufacturing Accounts.
CA Foundation Accounting Question Paper with Solutions
Here are the detailed CA Foundation Accounting Answer Key and solutions for the initial compulsory question, as discussed in the review:
Question 1: Compulsory (20 Marks)
This question was divided into three parts: True/False with Reasons, a Theoretical Concept, and a Practical Problem.
|
Part |
Type |
Marks |
Topic Covered |
|
(A) |
True/False with Reasons |
12 (6 x 2 marks) |
Accounting Concepts & Principles |
|
(B) |
Explain Concepts |
4 |
Valuation Principles (Measurement Bases) |
|
(C) |
Practical Problem |
4 |
Subsidiary Book (Purchase Book) |
Question 1 (A): State with Reasons whether the following statements are True or False (CA Foundation Accounting Suggested Answers)
|
Statement |
Answer |
Reason/Explanation |
|
1. Materiality depends only upon the amount of the item and not upon the size of the business, nature and level of information. |
False |
Materiality is determined by factors beyond just the monetary amount. It also depends on the size of the entity, the nature of the transaction, and the context of the information being provided. An item of ₹1 lakh may be material for a small business but immaterial for a large corporation with a turnover of ₹1000 crore. |
|
2. While preparing the Income and Expenditure Account as per the Accrual Concept, the Income and Expenditure is considered in the period in which the actual receipts or payments occurred. |
False |
The Income and Expenditure Account is prepared on an Accrual Basis. It includes all revenue-nature income and expenses that pertain to the current accounting period, regardless of whether cash was actually received or paid in that period. |
|
3. Profit Sharing Ratio and Capital Contribution Ratio need not be the same. |
True |
The Profit Sharing Ratio (PSR) among partners is governed by the terms of the Partnership Agreement (Deed). It is not compulsory for the PSR to be the same as the ratio of their capital contributions. |
|
4. Depreciation is not provided in the financial year when the entity incurs a loss. |
False |
Depreciation is treated as a Charge Against Profit, not an Appropriation of Profit. Therefore, it must be provided for and accounted for in the Profit & Loss Account even if the business is running at a loss. |
|
5. The concept that helps in keeping the business affairs free from the influence of personal affairs of the owner is known as the Matching Concept. |
False |
The concept that separates the business's financial transactions from the owner's personal transactions is the Business Entity Concept. The Matching Concept deals with matching revenues with the expenses incurred to earn that revenue in the same period. |
|
6. A company cannot issue equity shares at a discount to the general public. |
True |
According to Section 53 of the Companies Act, a company is prohibited from issuing shares at a discount, except in the case of Sweat Equity Shares issued to employees or directors. Any other issue is considered void. |
Question 1 (B): Explain the Generally Accepted Valuation Principles (Measurement Bases)
Accounting principles include different measurement bases for valuation. The four generally accepted valuation principles are:
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Historical Cost: The amount paid to acquire the asset at the time of purchase.
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Current Cost: The amount that would have to be paid to acquire the same or an equivalent asset today.
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Realisable Value: The amount that would be obtained by selling the asset today, which is essentially its selling price.
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Present Value: The discounted present value of the net future cash inflows that the asset is expected to generate.
Question 1 (C): Practical Problem on Purchase Book
This question required recording transactions in the Purchase Book, which only records credit purchases of goods for trade.
|
Date |
Transaction Summary |
Status in Purchase Book |
Amount |
|
Dec 2 |
Credit purchase from Gupta & Co. (Plates and Bowls). |
Recorded |
₹36,700 (Net amount after Trade Discount, plus Packing Charges) |
|
Dec 6 |
Credit purchase of Furniture from M/s Plywood. |
Not Recorded |
Furniture is a fixed (capital) asset, not goods. It is recorded in the Journal Proper. |
|
Dec 8 |
Credit purchase from Ajanta & Co. (Spoon and Fork boxes). |
Recorded |
₹20,000 (₹10,000 + ₹10,000) |
|
Dec 15 |
Purchase from Universal Suppliers for Cash. |
Not Recorded |
Cash purchases are recorded in the Cash Book, not the Purchase Book. |
|
Dec 27 |
Credit purchase of Cookers from Verma & Sons. |
Recorded |
₹9,000 (12 cookers @ ₹750 each) |
Note on Packing Charges: The packing charges related to the goods purchased on Dec 2 (₹700) are included in the total cost of the purchase in the Purchase Book.
ICAI CA Foundation Accounting Solutions: Other Key Questions
The paper was comprehensive, covering various other topics, including:
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Depreciation: A practical question involving methods like the Sum of Digits (SOD) and the concept of Provision for Depreciation. The residual value of an asset is considered when calculating depreciation.
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Partnership Accounting: A question on the admission of a partner, which involved calculating Hidden Goodwill.
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Non-Profit Organisation (NPO): A large question requiring the preparation of the Income and Expenditure Account and the Balance Sheet. This required working out specific items like Subscription, Capital Fund, and treatment of Entrance Fees.
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Bank Reconciliation Statement (BRS): A question based on BRS.
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Manufacturing Account: A question requiring the preparation of the Manufacturing Account for the year ended 31st March 2025.
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Bills of Exchange: A question dealing with the Bills of Exchange or Promissory Note.
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Goods on Sale or Return: A problem focusing on the treatment of goods sent on a sale or return basis.
CA Foundation Accounts Step-by-Step Solutions: Final Review
The CA Foundation September 2025 Accounts paper was a test of both theoretical knowledge and meticulous application in practical problems. Certain questions, such as the one on Depreciation using SOD, the Hidden Goodwill calculation in Partnership, and the Share Capital question that required the preparation of a Cash Book, were noted to be new or slightly complex, requiring extra focus and time management from candidates. For a thorough review, it is highly recommended for students to solve the entire paper to understand the time requirements and standard of questions.