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UPSC Commerce and Accountancy Optional Syllabus 2025

UPSC Commerce and Accountancy Optional Syllabus 2025 includes two papers: Paper I and Paper II. UPSC Commerce and Accountancy Optional Syllabus 2025 covers topics such as Financial Accounting, Cost Accounting, Auditing, Financial Management, Taxation, Business Organisation, Industrial Relations, and Indian Financial System.
authorImageAnil Solonki25 Jul, 2025
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Commerce And Accountancy Syllabus

 

UPSC Commerce and Accountancy Optional in UPSC Mains is mostly preferred by candidates who have studied commerce or finance subjects in their graduation. While commerce as a subject deals with goods and services, accounting deals with recording, classifying, and reporting on business transactions. There are two papers in Commerce and Accountancy Optional, each worth 250 marks.

Paper I revolves around Accounting and Finance, Paper II revolves around Organisation, Human Resource, and Industrial Relations. This optional is considered highly scoring for candidates with a background in B.Com, CA, CMA, or MBA (Finance). Read on for UPSC Commerce and Accountancy Optional syllabus, books, and preparation tips.

UPSC Commerce and Accountancy Optional Syllabus 2025

The Commerce and Accountancy Optional syllabus is technical in nature. Further, while topics are crisp, the subtopics make the Commerce and Accountancy syllabus lengthy compared to other topics. Candidates learn about interesting concepts such as accounting, finance, market, tax, and management of human resources. Here is the detailed syllabus for both paper 1 and paper 2:

UPSC Commerce and Accountancy Optional Paper 1 Syllabus 

The Commerce and Accountancy Paper 1 deals with topics of Accounting and Finance. These two major subjects could be further broken down into multiple subtopics. The table below lists the syllabus of Paper I:
Topics Subtopics
Accounting, Taxation & Auditing
1. Financing Accounting
  • 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.
  • Accounting for Share Capital Transactions including Bonus Shares, Right Shares.
  • Emplyees Stock Option and Buy-Back of Securities.
  • Preparation and Presentation of Company Final Accounts.
  • Amalgamations, Absorption, and Reconstruction of Companies.
2. 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.
  • Methods of Costing: Job Costing, Process Costing, Activity Based Costing. Volume-cost-Profit Relationship as a Tool of Profit Planning.
  • Incremental Analysis/Differential Costing as a Tool of Pricing Decisions, Product Decisions, Make or Buy Decisions, Shut-Down Decisions, etc.
  • Techniques of Cost Control and Cost Reduction : Budgeting as a Tool of Planning and Control. Standard Costing and Variance Analysis.
  • Responsibility Accounting and Divisional Performance Measurement.
3. 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.
  • Set-off and Carry forward of Loss.
  • Deductions from gross Total Income.
  • Salient Features/Provisions Related to VAT and Services Tax .
4. Auditing
  • Company Audit: Audit related to Divisible Profits, Dividends, Special investigations, Tax audit.
  • Audit of banking , Insurance, Non-Profit Organization and Charitable societies/Trusts/Organizations.
Financial Management, Financial Institutions and Markets
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.
  • Capital Budgeting Decisions: Process, Procedures and Appraisal Methods. Risk and Uncertainty Anlysis and Methods.
  • Cost of Capital: Concept, Computation of Specific Costs and Weighted Average Cost of Capital. CAPM as aTool of Determining Cost of Equity Capital.
  • 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.
  • Dividend Decisions and Valuation of Firm : Walter’s Model, MM Thesis, Gordan’s Model, Lintner's Model. Factors Affecting Dividend Policy.
  • Working Capital Management: Planning of Working Capital. Determinants of Working Capital. Components of Working Capital —Cash, Inventory and Receivables.
  • Corporate Restructuring with focus on Mergers and Acquisitions (Financial aspect only).
2. 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.
  • Capital Market: Primary and Secondary Market. Financial Market Instruments and Innovative Debt Instruments. SEBI as a Regulator.
  • Financial Services: Mutual Funds, Venture Capital, Credit Rating Agencies, Insurance and IRDA.

UPSC Commerce and Accountancy Optional Paper 2 Syllabus 

Commerce and Accountancy Paper II is comparatively dynamic, with topics ranging from organisation theory to industrial relations. Candidates need to apply the concepts learned in this subject to the management of organisations and human resources. The syllabus is as follows for the second paper:
Topics Subtopics
Organisation Theory and Behaviour
1. Organisation Theory
  • Nature and Concept of Organisation: External Environment of Organisation—Technological, Social, Political, Economical and Legal, Organizational Goals, Primary and Secondary Goals, Single and Multiple Goals, Management by Objectives.
  • Evolution of Organisation theory: Classical Neo-classical and system approach.
  • Modern Concepts of Organisation Theory: Organisational Design, Organisational Structure and Organisational Culture.
  • 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.
  • Designing Organizational structures —Authority and Control, Line and Staff Functions, Specialization and Coordination. 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.
  • Managing Organizational Culture.
2. Organisation Behaviour
  • Meaning and Concept : Individual in organization; Personality, Theories, and Determinants; Perception Meaning and Process.
  • 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.
Human Resources Management and Industrial Relations
1. Human Resources Management (HRM)
  • Meaning Nature and Scope of HRM, Human Resource Planning, Job Analysis, Job Description, Job Specification, Recruitment Process, Selection Process, Orientational and Placement, Training and Development Process Performance Appraisal and 360° Feedback Salary and Wage Administration, Job Evaluation, Employee Welfare , Promotions, Transfers and Separations.
2. Industrial Relations (IR)
    • Meaning, Nature, Importance and Scope of IR, Formation of Trade Union, 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.
    • Nature of Industrial Disputes: Strikes and Lockouts, Causes of Disputes, Prevention and Settlement of Disputes.
    • Worker’s Participation in Management: Philosophy, Rationale, Present Day Status and Future Prospects.
  • Adjudication and Collective Bargaining, Industrial Relations in Public Enterprises, Absenteeism and Labour Turnover in Indian Industries and their Causes and Remedies.
  • ILO and its Functions.

UPSC Commerce and Accountancy Optional PYQS

Going through the Commerce and Accountancy Optional PYQs helps in identifying important topics from the syllabus. If you have planned to take this optional subject for UPSC CSE mains, then PYQs should not be avoided. The commerce and accountancy optional previous year question papers are provided here.
Commerce and Accountancy Optional Question Paper 2024
Commerce and Accountancy Paper  I Click Here
Commerce and Accountancy Paper II Click Here
 Commerce and Accountancy Optional Question Paper 2023
Commerce and Accountancy Paper  I Click Here
Commerce and Accountancy Paper II Click Here
 Commerce and Accountancy Optional Question Paper 2022
Commerce and Accountancy Paper  I Click Here
Commerce and Accountancy Paper II Click Here

Strategic Approach for Commerce and Accountancy Optional

The Commerce and Accountancy Optional requires extensive reading and multiple revisions. Candidates should plan their preparation the minute they decide to take up this optional subject. Since both numerical and theoretical concepts are asked in the Commerce and Accountancy Optional, the strategy should focus on allocating sufficient time for the practice part. Here is the preparation strategy for the Commerce and Accountancy Optional subject:
  • Start with Syllabus: First and foremost, make sure that each and every topic of the syllabus has been understood. This will help in selecting the booklist and making a study plan.
  • Take the Help of Mentors: Enrolling in a good Commerce and Accountancy Optional coaching can help to comprehensively cover the syllabus and get trained in solving questions of UPSC mains.
  • Focus Basic Concepts: Do not shy away from reading NCERTs as these books develop a good foundation. Even if you have a similar background these books will help you have a solid understanding of basic and static concepts.
  • Refer to Quality Study Material: You must select the right books to cover the advanced topics of the Commerce and Accountancy Optional syllabus. Go through the toppers/mentor recommended booklist as provided here.
  • Stay Updated with Current Affairs: Candidates should be updated with the latest events, such as the budget, taxation policy changes, and the economic survey. A major section of the commerce and accountancy optional paper requires the application of current events.
  • Make Notes and Revise Multiple Times: Since revising bulky books will not be easy at the last minute, candidates should make short notes of topics. Toppers' advice making your own commerce and accountancy optional notes to aid in revision.
  • Solve Test Series and PYQs: Candidates need to solve the past 10 years of commerce and accountancy optional papers to understand the demands of the exam. Later, join a good test series to learn answer writing so that the paper can be completed within a 3-hour time limit.

UPSC Commerce and Accountancy Optional Books for Preparation

The choice of books can make a significant difference in the preparation. Since the syllabus of Commerce and Accountancy is vast, candidates must ensure they refer to limited books that cover each and every topic. Here is a standard booklist for the UPSC Commerce and Accountancy optional subject:
Paper Books
Paper 1
  1. Accounting Corporate Accounting– Naseem Ahmed
  2. Accounting Standards- D. S. Rawat
  3. Auditing Students’ Guide to Auditing- Aruna Jha
  4. Income Tax book- V.K. Singhania or Girish Ahuja
  5. Cost Accounting: Theory & Problems - Maheshwari & Mittal
  6. Financial Management: Text and Problems- Khan and Jain
  7. Indian Financial System- M.Y. Khan
  8. Financial Institutions & Markets- L.M. Bhole
Paper 2
  1. Human Resource Management- C.B. Gupta
  2. Industrial Relations- T.N. Chabra and R.K. Suri
  3. Dynamics of Industrial Relations- C.B. Mamoria and Satish Mamoria
  4. Human Resource Management- K. Aswathappa
  5. Organization Behaviour- L.M. Prasad
  6. Organisation Theory and Behaviour- B.P. Singha and T.N. Chabra

Commerce and Accountancy Optional Toppers List

Toppers have chosen Commerce and Accountancy as the optional subjects and have scored well with decent preparation. In 2022, Garima Lohia achieved second rank in the UPSC exam with this optional. Here is the list of toppers who have taken this subject in the past:
Topper Name Rank Year
Garima Lohia AIR 2 2022
Anshika Jain AIR 306 2022
Sujawal Jagga AIR 84 2021
Shivakshi Dixit AIR 64 2020
Raunak Agrawal AIR 13 2019

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UPSC Commerce and Accountancy Optional Syllabus FAQs

Who should choose the Commerce and Accountancy optional?

Candidates with similar backgrounds should opt for Commerce and Accountancy as an optional subject, as it is a technical subject with numerical problems along with theory.

What subjects are included in Commerce and Accountancy?

The subjects of finance accounting, taxation and auditing, financial management, financial institutions, markets, organisation theory and behaviours, human resource management, and industrial relations are included in commerce and accountancy.

How do I score high marks in Commerce and Accountancy?

To score high marks in this optional subject candidates must complete the syllabus as soon as possible and solve test series to tackle numerical problems.

How much time is required to complete the Commerce and Accountancy optional?

Around 6 to 8 months are required to complete the Commerce and Accountancy optional.

What does UPSC Commerce And Accountancy Paper II include?

Paper II includes Financial Management, Organization Theory, Industrial Relations, and the Indian Financial System.
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