This chapter is written to help you review intermediate and advanced accounting (financial accounting) for the Financial Accounting and Reporting section of the exam. The AICPA Content Specification Outline of financial accounting coverage appears below.
The chapter is organized along the lines of the traditional intermediate and advanced accounting texts. The topics are arranged per the fourteen financial modules (on the previous pages). The objective is to provide you with the basic concepts, journal entries, and formulas for each topic and subtopic. Hopefully you will be able to expand, adapt, and apply the basics to specific problem situations as presented in multiple-choice questions and simulations appearing on the CPA exam. Keep in mind the importance of working questions and simulations under exam conditions as you study the basics set forth in this chapter. Refer to the multiple-choice questions, problems, and simulation problems on each of the financial accounting topics.
As you work through this chapter, remember that there are many possible series of journal entries and account titles that can be used in accounting for a specific type of economic transaction (e.g., long-term construction contracts). Reconcile the approach illustrated in the chapter with the approach you studied as an undergraduate per your intermediate or advanced text.
In this chapter, you will be referred frequently to the authoritative literature. As of July 1, 2009, ...