The FAR Exam has more material than, Audit, BEC, and REG so candidates often ask what is most likely to be tested. As the Premier CPA Exam Tutor, Darius Clark knows the CPA FAR Exam better than anyone. Financial accounting topics that are Universal from the AICPA blueprint include Bonds, Leases, Cash Basis to Accrual, Government Accounting, Business Combinations, Asset Impairment… In this video, I include some of the multiple choice questions from these topics that the CPA Exam is likely to ask and help you solve and answer these questions without memorizing. I would not be surprised if the first multiple choice question on your CPA FAR exam is a cash basis to accrual basis question. The exam will give you cash basis revenue and you will have to determine accrual basis revenue given the change in accounts receivable or deferred revenue. But there’s more, Operating Leases have changed the most in 2019, therefore expect the CPA FAR Exam to ask you a question on the balance sheet impact of an operating lease. Why is this important? The asset and liability must be included on the lessee’s balance sheet even if none of the criteria for capitalization are met. What about bonds? Bonds are always tested and the AICPA expects a candidate to know when interest expense is greater than cash interest paid and when is interest expense less than cash interest paid. Hint, is the bond issued at a discount, or a premium. Expect a financial accounting governmental question on the cash flow statement since the Enterprise Fund Cash Flow statement is different than the US GAAP statement of cash flows. What else is going to be tested on the FAR exam? The AICPA will ask you about business combinations and how goodwill is calculated when the parent buys less than 100% of the subsidiary.

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