CPA Financial Accounting and Reporting Exam Guide 2026/2027 for Everyone (eBook)

Access 900 Practice Questions with Detailed Answers and Clear Explanations

Terry Giron (Autor)

eBook Download: EPUB

2025 | 1. Auflage
220 Seiten
Publishdrive (Verlag)
978-0-00-112817-0 (ISBN)

Infos

The CPA Financial Accounting and Reporting Exam Guide 2026/2027 for Everyone is a structured learning resource designed to support candidates preparing for the Financial Accounting and Reporting (FAR) section of the CPA Examination. This guide presents core accounting principles, reporting standards, and exam-relevant concepts in a clear and organized format suitable for learners at all stages of CPA preparation.

The content focuses on helping readers understand and apply financial accounting and reporting concepts commonly tested on the FAR exam. Key topics include financial statement preparation, U.S. GAAP principles, revenue recognition, leases, governmental and nonprofit accounting, financial instruments, consolidations, foreign currency transactions, and accounting changes and error corrections. Explanations emphasize comprehension and application, supporting effective problem-solving and exam readiness.

Designed for Everyone-including accounting students, recent graduates, and working professionals-this guide serves as a comprehensive review and reference to help learners structure their study, reinforce foundational knowledge, and approach the FAR exam with confidence.

Disclaimer: This exam guide is an independent educational resource created for general exam preparation purposes. It is not affiliated with, endorsed by, or sponsored by the AICPA, NASBA, or any official CPA examination authority. All terminology and references are used solely for educational purposes.

Textauszug

Chapter 2 — Conceptual Framework, Presentation & Consolidations (Exam Topic Area)

Conceptual framework, GAAP hierarchy, recognition and measurement principles, and financial statement presentation

1. Explain, in detail, how the objectives of financial reporting in the Conceptual Framework drive the selection of recognition criteria for assets and liabilities.
2. Critically analyze the distinctions between recognition, derecognition, and disclosure and explain when each is sufficient to meet the objectives of financial reporting.
3. Describe the hierarchy of authoritative GAAP in the U.S., explain the role of FASB ASC and SEC guidance, and discuss how an entity resolves conflicts between sources.
4. Compare and contrast historical cost, fair value, current cost, and net realizable value as measurement bases, and evaluate their usefulness and tradeoffs for different classes of assets.
5. Explain how relevance and faithful representation conflict in practice, giving three concrete examples where a tradeoff must be made and how standard setters might resolve them.
6. Discuss the recognition criteria for revenue under the Conceptual Framework and reconcile those criteria with the five-step model of ASC 606.
7. For a long-lived intangible with an indefinite life, explain the sequence of recognition, measurement, impairment testing, and disclosure required under U.S. GAAP.
8. Analyze how probability and measurement uncertainty are incorporated into recognition decisions for contingent liabilities and contingent assets.
9. Explain the measurement and presentation implications when an entity changes its inventory valuation method from FIFO to weighted average due to improved relevance.
10. Discuss the conditions under which an entity should capitalize versus expense costs for internally developed software and relate this to the capitalization criteria in the Conceptual Framework.
11. Explain the accounting and presentation differences between operating leases and finance leases for lessees and lessors under U.S. GAAP, including balance sheet and income statement effects.
12. Critically evaluate the conceptual justification for presenting OCI (other comprehensive income) separate from net income and discuss when reclassification adjustments are appropriate.
13. Describe the recognition and measurement of an impairment loss for goodwill and how the allocation to reporting units connects to the conceptual objectives of financial statements.
14. Explain the interplay between materiality and the recognition threshold; provide examples where immaterial items are recognized and where materially small items might be aggregated and disclosed.
15. Describe the process and conceptual rationale for subsequent measurement of financial instruments classified as amortized cost versus fair value through net income.
16. Discuss the accounting for government grants or subsidies (if under GAAP analogs) and how recognition principles guide whether they are treated as income, liability, or equity.
17. Explain the concept of "control" in contribution to consolidation decisions and describe alternative control tests used in practice.
18. Analyze when noncontrolling interests (NCI) should be measured at fair value or at proportionate share of carrying amounts and the presentation consequences under consolidated statements.
19. Explain the consolidation elimination entries required when a parent uses the acquisition method and the subsidiary has a different reporting currency.
20. Discuss the recognition, measurement, and presentation of restructuring liabilities, including termination benefits and future operating losses, and the conceptual controversies surrounding recognition timing.
21. Explain how subsequent events are classified (Type I vs Type II), and evaluate the conceptual basis for adjusting versus disclosing in the financial statements.
22. Describe how measurement uncertainty and estimation errors are disclosed and corrected under GAAP, distinguishing prior-period adjustments from changes in accounting estimates.
23. Discuss the conceptual framework guidance on measurement of fair value when market activity is low and inputs are unobservable, including use of valuation techniques.
24. Critically assess how earnings management can exploit recognition and measurement choices and propose disclosure controls that would mitigate information asymmetry.
25. Explain how the concept of economic entity and going concern underpin the presentation of discontinued operations and held-for-sale classifications.
26. Describe the recognition, measurement, and presentation required for an entity that operates a defined benefit pension plan and experiences actuarial gains/losses.
27. Explain how an entity should account for nonmonetary exchanges (barters) that have commercial substance versus those that do not, and the measurement implications.
28. Analyze the accounting for asset retirement obligations and how present value measurement relates to the conceptual notions of recognition and faithful representation.
29. Discuss the application of the cost-benefit constraint on disclosure decisions and give examples of disclosures that might be omitted for cost reasons despite usefulness.
30. Explain how deferred taxes arise from temporary differences, the recognition of valuation allowances, and the presentation of deferred tax assets and liabilities.
31. Describe the measurement and presentation of variable interest entities (VIEs) and how primary beneficiary determination aligns with the Conceptual Framework.
32. Critically evaluate how revenue recognition for bundled contracts (multiple performance obligations) is allocated and why standalone selling price estimation is conceptually challenging.
33. Explain the recognition and disclosure requirements for related-party transactions and how they address concerns about faithful representation and completeness.
34. Describe the measurement and presentation differences between investment property held for rental versus property held for sale, and the conceptual rationale for classification.
35. Analyze how subsequent measurement basis changes (e.g., revaluation model adoption) impact comparability and what disclosures are necessary to maintain usefulness.
36. Explain the recognition and measurement criteria for impairment of financial assets under the incurred loss model vs expected credit loss model.
37. Discuss how nonreciprocal transfers (contributions, grants) should be recognized by not-for-profit entities and how these rules relate to the objectives in the Framework.
38. Explain the accounting and disclosure for commitments and contingencies involving environmental liabilities, including the role of probability and best estimate.
39. Describe the conceptual issues in accounting for hybrid financial instruments containing both liability and equity characteristics and their measurement under GAAP.
40. Analyze the presentation and disclosure challenges when significant subsequent events occur after the balance sheet date but before issuance, including going concern implications.
41. Explain the accounting for a business combination achieved in stages and how previously held equity interests are remeasured.
42. Discuss conceptual differences and presentation consequences between pooling-of-interests (if permitted historically) and acquisition methods.
43. Describe how consolidation adjustments treat intragroup profits included in inventory and fixed assets and the conceptual basis for elimination.
44. Explain when a parent should derecognize a subsidiary (disposal of a subsidiary) and the recognition and measurement of any gain or loss on disposal.
45. Analyze the measurement and classification of cash equivalents and restricted cash and how disclosures affect liquidity assessment.
46. Explain the recognition and presentation of share-based payments for employees and the conceptual tradeoffs of intrinsic value versus fair value approaches.
47. Discuss accounting for foreign currency translation for subsidiaries with a functional currency different from the reporting currency and the treatment of translation adjustments.
48. Describe the recognition and measurement of contingently issuable shares in a business combination and how they affect acquisition accounting.
49. Explain the measurement and presentation of investment in associates under the equity method and the conceptual rationale for recognizing the investor’s share of profits and losses.
50. Analyze the conceptual and measurement challenges in accounting for leases of specialized assets with no active market for the right-of-use asset.
51. Discuss how the concept of stewardship influences the level of detail in financial statement notes and the tension between stewardship and decision usefulness.
52. Explain recognition and measurement for multiple-element arrangements involving revenue and financing components, including interest recognition.
53. Describe the conceptual approach to measuring goodwill impairment when qualitative factors suggest possible impairment without a triggering event.
54. Explain how components of property, plant, and equipment are accounted for when parts have significantly different useful lives, and how that affects depreciation measurement.
55. Analyze the role of subsequent measurement at fair value for financial liabilities when an entity elects the fair value option, including presentation of changes.
56. Discuss the measurement and presentation of noncontrolling interest in a step acquisition where control is achieved...

Produkt-Details

• Erscheint lt. Verlag: 22.12.2025
• Sprache: englisch
• Themenwelt: Wirtschaft ► Betriebswirtschaft / Management
• ISBN-10: 0-00-112817-5 / 0001128175
• ISBN-13: 978-0-00-112817-0 / 9780001128170