IRFC Assistant (Finance) cheat sheet

Accounting equation: Assets = Liabilities + Equity; every transaction preserves it, so debits always equal credits in amount.

Accrual basis records revenue when performance obligation is satisfied and expense when incurred, regardless of cash movement; cash basis records only on receipt/payment.

Depreciation methods: straight line = (Cost − Residual)/Useful life; WDV = opening book value × rate; units of production = rate per unit × units used.

Ind AS 115 five steps: identify contract, identify performance obligations, determine transaction price, allocate price, recognise revenue on satisfaction.

Ind AS 116 lessee recognises Right-of-Use asset and lease liability at present value of lease payments; short-term and low-value leases are exempt.

Inventory under Ind AS 2 is measured at lower of cost and net realisable value; cost excludes abnormal waste and storage unless necessary in production.

Goodwill = consideration transferred + NCI + fair value of prior holding − fair value of net identifiable assets acquired (Ind AS 103).

Trial balance proves arithmetical accuracy only; it cannot detect errors of principle, compensating errors, or complete omission.

Time value: PV = FV/(1+r)^n; NPV = Σ CFt/(1+r)^t − Initial outlay; accept project when NPV > 0.

IRR is the discount rate at which NPV = 0; decision rule IRR > cost of capital, but IRR can mislead with non-conventional or mutually exclusive cash flows.

WACC = (E/V)×Ke + (D/V)×Kd×(1−t); marginal WACC is used for new projects, not historical average cost.

CAPM: Ke = Rf + β(Rm − Rf); beta measures systematic risk only, unsystematic risk is diversifiable.

Working capital cycle = inventory days + receivable days − payable days; shortening it releases cash without new borrowing.

Treasury front office deals, mid office measures and monitors risk, back office confirms and settles; segregation of these duties is a core control.

Value at Risk (VaR) states maximum expected loss over a horizon at a confidence level; it says nothing about the size of losses beyond that threshold.

Interest rate parity links spot and forward rates: F/S = (1+i domestic)/(1+i foreign); a covered interest arbitrage closes deviations.

Residential status under the Income-tax Act turns on 182 days in India, or 60 days plus 365 days in the preceding four years; the 60-day limb relaxes to 182 for specified cases.

Basic exemption and slab rates apply to individuals; surcharge applies above threshold income and marginal relief caps the surcharge to the excess income over the threshold.

Advance tax is payable in instalments (15%, 45%, 75%, 100%) by 15 June, 15 September, 15 December and 15 March for non-presumptive assessees.

GST is a destination-based value-added tax on supply of goods or services; input tax credit is available only on inputs used for taxable outward supply.

CGST and SGST are levied on intra-State supply, IGST on inter-State supply; IGST credit can be set off against CGST, SGST or IGST liability.

GST registration threshold is ₹40 lakh for goods and ₹20 lakh for services in most States, with lower limits for special category States.

TDS deducts tax at source on specified payments; TCS collects tax at source on specified receipts; both are matched against the payee's income in the annual return.

Capital gains: long-term holding period is 24 months for unlisted shares and immovable property, 12 months for listed securities; indexation is not available for all classes.

Audit risk = Inherent risk × Control risk × Detection risk; the auditor controls detection risk through the nature, timing and extent of procedures.

Assertions tested: existence, rights and obligations, completeness, valuation and allocation, cut-off, classification and presentation.

COSO internal control has five components: control environment, risk assessment, control activities, information and communication, monitoring activities.

Segregation of duties separates authorisation, custody, recording and reconciliation; combining them raises the risk of fraud and error.

Materiality is set at overall financial statement level and lowered for particular classes of transactions where misstatement risk is higher.

Going concern assessment covers at least 12 months from the date of the financial statements; a material uncertainty requires disclosure, not automatic qualification.

Sampling risk is the risk that the auditor's conclusion differs from that from testing the whole population; non-sampling risk arises from human or procedural failure.

Internal audit reports to the audit committee and assesses process and control effectiveness; statutory audit expresses an opinion on the financial statements.

Bond price and yield move inversely; for a given change in yield, price rises more than it falls (positive convexity).

Duration measures price sensitivity: % change in price ≈ −modified duration × change in yield; Macaulay duration is the weighted average time to cash flows.

Money market instruments have original maturity up to one year: T-bills, commercial paper, certificates of deposit, call money and repo.

Repo is a collateralised borrowing: the seller sells securities and repurchases at a higher price, the difference being the repo rate.

Primary market raises fresh capital (IPO, FPO, rights, QIP); secondary market provides liquidity and price discovery on exchanges.

Call and put options give rights, not obligations; the writer receives premium and bears the obligation, with loss potentially unlimited on a written call.

SEBI regulates securities markets, RBI regulates money and forex markets and banks, IRDAI insurance, PFRDA pensions.

Forward contracts are OTC and customised; futures are exchange-traded, standardised and marked to market daily through a clearing corporation.

Simple interest = P×R×T/100; compound amount = P(1+r/n)^(nt); effective annual rate = (1+r/n)^n − 1.

Profit and loss: profit% is usually on cost price; selling price = cost × (1 + profit%), and successive discounts multiply as (1−d1)(1−d2).

Ratio and proportion: if a:b = c:d then ad = bc; for part-sharing, divide the total in the ratio of the shares.

Permutations nPr = n!/(n−r)!; combinations nCr = n!/(r!(n−r)!); nCr = nC(n−r).

Averages: mean of grouped data = Σfx/Σf; combined mean = (n1x̄1 + n2x̄2)/(n1+n2).

Time, speed and distance: distance = speed × time; for equal distances at speeds a and b, average speed = 2ab/(a+b).

Logarithms: log(ab) = log a + log b; log(a/b) = log a − log b; log(a^n) = n log a; change of base log_b a = log a/log b.

Annuity present value = PMT × [1 − (1+r)^−n]/r; used for loan EMIs and lease valuations.

Central tendency: mean is affected by outliers, median is robust, mode is the most frequent value; for a symmetric distribution mean = median = mode.

Variance = Σ(x − x̄)²/n for a population and divided by (n−1) for a sample; standard deviation is its square root.

Coefficient of variation = (standard deviation/mean) × 100; it compares dispersion across series with different units.

Correlation coefficient r lies between −1 and +1; r = 0 indicates no linear relationship, not necessarily independence.

Regression line of y on x: y = a + bx with b = Cov(x,y)/Var(x); the two regression lines intersect at the means.

Probability: P(A∪B) = P(A) + P(B) − P(A∩B); for independent events P(A∩B) = P(A)×P(B).

Bayes' theorem updates prior probability with likelihood: P(A|B) = P(B|A)P(A)/P(B).

Normal distribution is symmetric about its mean; approximately 68% of values lie within one standard deviation and 95% within two.

Coding-decoding: identify the shift pattern (constant, alternating, or reverse alphabet) from the given pairs before applying it to the target word.

Blood relations: draw a family tree with gender and generation markers; never infer gender from a name alone.

Direction sense: track displacement with a coordinate sketch; final distance uses Pythagoras when the path turns at right angles.

Series completion: check differences, then ratios, then squares/cubes and alternating operations in that order.

Syllogism: apply Venn diagrams; a conclusion follows only if it is true in every possible diagram satisfying the premises.

Seating arrangement: fix the most constrained clue first, then place relative positions clockwise or anticlockwise as stated.

Analogy and classification: find the defining relationship (part-whole, cause-effect, worker-tool) rather than surface similarity.

Statement-assumption: an assumption is implicit only if it is necessary for the statement to make sense, not merely plausible.

Subject-verb agreement: a singular subject takes a singular verb; with 'either/or' and 'neither/nor' the verb agrees with the nearer subject.

Active to passive: object becomes subject, verb becomes be + past participle, and the agent is introduced by 'by'.

Reported speech shifts tense one step back and adjusts pronouns and time words (today → that day, tomorrow → the next day).

Articles: 'a' before consonant sounds, 'an' before vowel sounds, 'the' for specific or unique referents.

Common confusions: affect (verb) vs effect (noun); principal (main/head) vs principle (rule); complement (complete) vs compliment (praise).

Business writing structure: purpose in the first line, supporting detail next, clear action or request last; one idea per paragraph.

Formal email avoids contractions, slang and emoticons, and uses a clear subject line stating the purpose.

Reading comprehension: answer strictly from the passage; eliminate options that add outside information or overstate the claim.

RBI is India's central bank: it issues currency, manages monetary policy, regulates banks and non-bank lenders, and holds foreign exchange reserves.

Monetary policy tools: repo and reverse repo rates, CRR, SLR, open market operations and the Liquidity Adjustment Facility; MPC sets the policy repo rate.

Banking Regulation Act 1949 governs banking companies; RBI Act 1934 establishes the central bank; the Insolvency and Bankruptcy Code dates from 2016.

NPCI operates UPI, IMPS, RuPay, NACH and AePS; UPI is a real-time payment system settled through member banks.

Priority sector lending targets for domestic scheduled commercial banks are 40% of adjusted net bank credit, with sub-targets for agriculture and weaker sections.

Basel III sets minimum capital: Common Equity Tier 1 of 4.5%, Tier 1 of 6% and total capital of 8% of risk-weighted assets, plus buffers.

GDP is the market value of final goods and services produced domestically in a period; fiscal deficit = total expenditure − total receipts excluding borrowings.

Instruments of financial inclusion include Jan Dhan accounts, PMJDY overdraft, Mudra loans, Stand-Up India and the Lead Bank Scheme.