Financial Accounting Exam Questions Practice Test Part 2

A complete practice test to pass your Financial Accounting Exam Part 2

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Financial Accounting Exam Questions Practice Test Part 2

What You Will Learn!

Prepare a Cash Flow Statement.
Measure, Value and Re-value Assets, Liabilities and Equity.
Understand the Accounting Equation and the Debit/Credit System.
Identify All Stages of The Accounting Cycle.
Apply Financial Accounting Principles to Business Settings.
Develop a Basic Understanding of GAAP and IFRS Accounting Policies.

Description

The CPA Financial Accounting is a certification exam for Certified Public Accountants (CPAs) offered by the American Institute of Certified Public Accountants (AICPA). The exam tests a candidate's knowledge and understanding of financial accounting concepts, principles and practices. This exam covers topics such as financial statement preparation and analysis, revenue recognition, expense recognition, and accounting for assets, liabilities, and equity transactions. The CPA Financial Accounting Exam is a part of the Uniform CPA Examination, which is the first step towards becoming a licensed CPA in the United States.

Financial accounting (or financial accountancy) is the field of accounting concerned with the summary, analysis and reporting of financial transactions pertaining to a business. This involves the preparation of financial statements available for public consumption. Stockholders, suppliers, banks, employees, government agencies, business owners, and other stakeholders are examples of people interested in receiving such information for decision-making purposes.

Financial accountancy is governed by both local and international accounting standards. Generally Accepted Accounting Principles (GAAP) is the standard framework of guidelines for financial accounting used in any given jurisdiction. It includes the standards, conventions, and rules that accountants follow in recording and summarizing, and in the preparation of financial statements. On the other hand, International Financial Reporting Standards (IFRS) is a set of international accounting standards stating how particular types of transactions and other events should be reported in financial statements. IFRS are issued by the International Accounting Standards Board (IASB). With IFRS becoming more widespread on the international scene, consistency in financial reporting has become more prevalent among global organizations.

While financial accounting is used to prepare accounting information for people outside the organization or not involved in the day-to-day running of the company, management accounting provides accounting information to help managers make decisions to manage the business.

International Financial Reporting Standards (IFRS) are designed as a common global language for business affairs so that company accounts are understandable and comparable across international boundaries.

International Accounting Standards (IAS), while standards issued by IASB are called IFRS. IAS were issued between 1973 and 2001 by the Board of the International Accounting Standards Committee (IASC).