The subject matter of the Financial Accounting exam is drawn from the following topics. The percentages next to the main topics indicate the approximate percentage of exam questions on that topic.
General Topics (20%–30%)
- Generally accepted accounting principles
- Rules of double-entry accounting/transaction analysis/accounting equation
- The accounting cycle
- Business ethics
- Purpose of, presentation of, and relationships between financial statements
- Forms of business
The Income Statement (20%–30%)
- Presentation format issues (e.g., single-step vs multi-step)
- Recognition of revenue and expenses
- Cost of goods sold
- Nonoperational items (e.g., gains and losses, etc.)
- Profitability analysis
The Balance Sheet (30%–40%)
- Cash and internal controls
- Valuation of accounts and notes receivable (including bad debts)
- Valuation of inventories
- Acquisition and disposal of long-term assets
- Depreciation/amortization/depletion
- Intangible assets (e.g., patents, goodwill, etc.)
- Accounts and notes payable
- Long-term liabilities (e.g., bonds payable)
- Owner's equity
- Preferred and common stock
- Retained earnings
- Liquidity, solvency, and activity analysis
Statement of Cash Flows (5%–10%)
- Indirect method
- Cash flow analysis
- Operating, financing, and investing activities
- Noncash financing and investing activities
Miscellaneous (Less than 5%)
- Investments
- Contingent liabilities
