Principles Of Accounting

The examination contains 78 questions to be answered in 90 minutes. Any time candidates spend on tutorials or providing personal information is in addition to the actual testing time.

Knowledge and Skills Required
Questions on the Principles of Accounting examination require candidates to demonstrate one or more of the following abilities:

Familiarity with accounting concepts and terminology
Preparation, use, and analysis of accounting data and financial reports issued for both internal and external purposes
Application of accounting techniques to simple problem situations involving computations
Understanding the rationale for generally accepted accounting principles and procedures
The subject matter of the Principles of Accounting examination is drawn from the following topics. The percentages next to the main topics indicate the approximate percentages of exam questions on those topics.

Approximate Percent of Examination
60-70% Financial accounting
(concerned with providing financial statements and reports of interest to company managers as well as bankers, investors, and other outsiders who must make a financial assessment of a company)
Generally accepted accounting principles
Rules of double-entry accounting
The accounting cycle
Presentation of and relationships between general-purpose financial statements
Valuation of accounts and notes receivable
Valuation of inventories
Initial costs of plant assets
Depreciation
Liabilities
Investments
Capital
Cash and stock dividends
Treasury stock
Purchase and sale of merchandise
Revenue and cost apportionments
Cash control
Division of profits and losses in partnership accounting
Cash flow analysis
30-40% Managerial accounting
(concerned with the use of accounting data for internal purposes to help management in planning and controlling functions in a company)
Analysis of departmental operations
Budgeting
Cost-volume profit (break-even) analysis
Direct costing and absorption costing
Financial statement analysis
Performance evaluation
Process and job-order systems
Standard costs and variances
The manufacturing environment
Use of differential (relevant) cost