In order to pass the exam, one must be able to analyze the information provided by the instructor and answer the questions in an organized manner. Many people believe that the exam requires knowledge of finance and economics. While it is true that some knowledge of this topic is helpful for passing the exam, it is not a requirement. Instead, the key to success is being able to follow along and follow the guidelines the instructor provides.
Most of the questions revolve around financial information and financial statements. The exam is structured as an exam in two parts, the written section and the oral section. You must answer both sections correctly in order to pass. The exam is broken up into several chapters with subtopics and exercises. Each chapter and subtopic is designed to test specific skills.
The most important part of the exam is the written portion. This section tests your knowledge of general accounting principles and the process of compiling financial data. The exam does not require you to use Excel or any other spreadsheet program. You simply have to review the instructions provided in the book and follow the prompts provided in the actual exam.
The next section of the exam will test your knowledge of financial statement analysis. In this section, you need to write a short report on the financial information you gathered from the book and/or instructor. You will also be required to complete the following questions:
(a) Identify assets, liabilities, revenues, expenses, and balance sheet location for each asset group and each item category (e.g., income, sales, etc.) and type of each asset/equity (e.g., tangible assets, investments, inventories). (b) Compile these items into a single line item using a simple line graph and evaluate the resulting graph for profitability as an absolute value over time.
(c) Examine the result and its relative importance to the financial statement. Is the line item’s profitability in line with the statement of financial status?
(d) Compare the profitability of each line item with the statement of financial statement and analyze if there are any other information points which should be examined in conjunction with it. It is also important to examine your understanding of the financial statement in general. By answering the questions above you should have a general knowledge of financial statements, their interpretation, and how to apply them to the current financial information you received from the book or the instructor.
The next set of exam questions deals with the process of consolidation. This involves analyzing the different types of debt, assets, cash flows, and other financial statements that describe the flow of funds in a company. If you can summarize the information you collected from the book and/or instructor and provide the analysis with a reasonable degree of accuracy, you should pass the exam.
Finally, you should know enough about the process of financial reporting to understand what you will have to do on the final exam. This part of the exam will be divided into two sections: the audit portion and the bookkeeping portion. and will be broken down into many small manageable segments.
The bookkeeping segment will ask you to prepare a single year’s worth of financial information for the company in question. From that information, you will then answer questions relating to financial statement preparation. and interpretation of the data.
The auditor portion of the exam will have you create an internal audit record for the bookkeeping year and will require you to use the bookkeeping method of bookkeeping in order to create a balance sheet. Then you must write the audit report and explain why you came to this conclusion. You will also have to explain how you arrived at the final results of the bookkeeping and report the financial statement to the instructor and the board of directors.