How many questions are on the CS Executive Paper 4 (CAFM) exam?

The actual ICSI exam does not have a fixed number of objective questions because Paper 4 Corporate Accounting and Financial Management is entirely descriptive. It is a 100-mark paper, and candidates answer descriptive and numerical problems within 3 hours.

Is CS Executive Paper 4 objective or descriptive?

Under the ICSI New Syllabus 2022, most Executive papers are 20% objective and 80% descriptive, but Paper 4 (Corporate Accounting and Financial Management) is a notable exception: it is 100% descriptive with no objective component.

What is the marks split between Part A and Part B in CAFM?

Paper 4 is divided into Part A Corporate Accounting carrying 60 marks and Part B Financial Management carrying 40 marks, for a total of 100 marks in a 3-hour examination.

What is the passing requirement for CS Executive Paper 4?

A candidate must secure at least 40% marks in the individual paper and an aggregate of 50% across the module to pass, as per ICSI examination rules.

Which accounting standards are tested in CS Executive Paper 4?

Part A covers an overview of Accounting Standards (AS) and Indian Accounting Standards (Ind AS), which are converged with IFRS, including standards on presentation, inventories, cash flows, income taxes, property, plant and equipment, and revenue recognition.

How should I prepare for the fully descriptive CAFM paper?

Because the paper is descriptive and numerical, practise working full accounting entries and financial management computations by hand. Use these MCQ-style questions to lock in concepts, then solve past ICSI descriptive papers under timed conditions.

Who conducts the CS Executive Paper 4 exam?

The Institute of Company Secretaries of India (ICSI) conducts the CS Executive Programme examinations, including Paper 4 Corporate Accounting and Financial Management, as offline centre-based examinations.

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2026 Statistics

Key Facts: CS Executive CAFM Exam

100

Total Marks

ICSI New Syllabus 2022

60 / 40

Part A / Part B Marks

ICSI Study Material

100%

Descriptive Paper

ICSI Exam Pattern

3 hrs

Exam Duration

ICSI Examination

40% / 50%

Paper / Aggregate Pass

ICSI Rules

Paper 4

Executive Group 1

ICSI Executive Programme

CS Executive Paper 4 Corporate Accounting and Financial Management (CAFM) is a 100-mark, 3-hour ICSI paper under the New Syllabus 2022. Part A Corporate Accounting carries 60 marks (accounting standards/Ind AS, share capital, debentures, bonus and rights, redemption of preference shares, Schedule III statements, consolidation, cash flow statements) and Part B Financial Management carries 40 marks (capital budgeting, cost of capital, capital structure and leverage, working capital, dividend decisions, sources of finance, time value of money, security analysis). Uniquely among Executive papers, CAFM is 100% descriptive with no objective/MCQ component. Pass requires at least 40% in the paper and 50% module aggregate.

Sample CS Executive CAFM Practice Questions

Try these sample questions to test your CS Executive CAFM exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Under the ICSI CS Executive (2022 syllabus) Paper 4, Indian Accounting Standards (Ind AS) are converged with which set of global standards?

A.UK GAAP

B.Japanese GAAP

C.US GAAP

D.IFRS issued by the IASB

Explanation: Ind AS are India's accounting standards that have been converged with IFRS issued by the International Accounting Standards Board (IASB), with certain carve-outs to suit Indian conditions. They are notified under the Companies (Indian Accounting Standards) Rules, 2015.

2Ind AS 1 deals with which of the following?

A.Property, Plant and Equipment

B.Revenue from Contracts with Customers

C.Inventories

D.Presentation of Financial Statements

Explanation: Ind AS 1 prescribes the basis for presentation of general purpose financial statements to ensure comparability, covering the structure and minimum content of financial statements. Inventories is Ind AS 2, PP&E is Ind AS 16, and revenue is Ind AS 115.

3Under AS 2 / Ind AS 2, inventories are valued at:

A.Cost only

B.Net realisable value only

C.Lower of cost and net realisable value

D.Higher of cost and net realisable value

Explanation: The fundamental rule for inventory valuation is the lower of cost and net realisable value (NRV). This applies the prudence concept, ensuring inventories are not carried at more than the amount expected to be realised from their sale.

4The financial statements of companies in India must be prepared in the format prescribed by which schedule of the Companies Act, 2013?

A.Schedule V

B.Schedule VII

C.Schedule II

D.Schedule III

Explanation: Schedule III to the Companies Act, 2013 prescribes the format of the Balance Sheet and Statement of Profit and Loss. Division I applies to companies following AS, while Division II applies to companies following Ind AS.

5As per the Companies Act, 2013, shares can be issued at a discount only in which case?

A.Rights issue

B.Public issue at a discount

C.Issue of bonus shares

D.Issue of sweat equity shares

Explanation: Section 53 prohibits issue of shares at a discount, except sweat equity shares issued under Section 54. Any other issue of shares at a discount is void under the Act.

6Securities premium received on issue of shares must be transferred to which account, the application of which is restricted by Section 52 of the Companies Act, 2013?

A.Capital Redemption Reserve

B.Profit and Loss Account

C.General Reserve

D.Securities Premium Account

Explanation: Premium on issue of securities is credited to the Securities Premium Account. Section 52 restricts its use to specified purposes such as issuing fully paid bonus shares, writing off preliminary expenses, and buy-back of securities.

7A company forfeits 1,000 shares of Rs.10 each on which Rs.7 has been called and Rs.5 received. The amount transferred to the Share Forfeited Account on forfeiture is:

A.Rs.5,000

B.Rs.7,000

C.Rs.2,000

D.Rs.10,000

Explanation: On forfeiture, the amount already received (paid-up portion) is credited to the Share Forfeited Account. Here Rs.5 per share was received on 1,000 shares = Rs.5,000. The unpaid called-up amount is debited to Calls in Arrears.

8Bonus shares can be issued by a company out of which of the following?

A.Unrealised profits

B.Money borrowed from banks

C.Revaluation reserve

D.Free reserves, securities premium or capital redemption reserve

Explanation: Under Section 63 of the Companies Act, 2013, bonus shares may be issued out of free reserves, the securities premium account, or the capital redemption reserve account. They cannot be issued out of reserves created by revaluation of assets.

9In a rights issue, the value of a right per share, given cum-right market price M, issue price S, and ratio of n existing shares for every m new shares, is conceptually equal to:

A.The difference between cum-right and ex-right prices

B.The face value of the share

C.The dividend per share

D.The book value per share

Explanation: The value of a right equals the fall in market price from the cum-right (before) to the ex-right (after) value, because that drop reflects the benefit transferred to those entitled to subscribe at the favourable issue price.

10When preference shares are redeemed out of profits otherwise available for dividend, an amount equal to the nominal value redeemed must be transferred to which account?

A.General Reserve

B.Securities Premium Account

C.Capital Redemption Reserve

D.Dividend Equalisation Reserve

Explanation: Section 55 requires that where preference shares are redeemed out of distributable profits, a sum equal to the nominal amount of shares redeemed must be transferred to the Capital Redemption Reserve (CRR). This maintains the company's capital base.

About the CS Executive CAFM Practice Questions

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