Wiley - Wiley CPAexcel Exam Review July 2016 Focus Notes: Financial Accounting and Reporting

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This publication is a comprehensive yet simplified study program. It provides a review of all the basic skills and concepts tested on the CPA exam and teaches important strategies to take
the exam faster and more accurately. This tool allows you to take control of the CPA exam.

This simplified and focused approach to studying for the CPA exam can be used:

• As a handy and convenient reference manual
• To solve exam questions
• To reinforce material being studied

Included is all of the information necessary to obtain a passing score on the CPA exam in a concise and easy-to-use format. Due to the wide variety of information covered on the exam, a number of techniques are included:

• Acronyms and mnemonics to help candidates learn and remember a variety of rules and checklists
• Formulas and equations that simplify complex calculations required on the exam
• Simplified outlines of key concepts without the details that encumber or distract from learning the essential elements
• Techniques that can be applied to problem solving or essay writing, such as preparing a multiple-step income statement, determining who will prevail in a legal conflict, or developing an audit program
• Pro forma statements, reports, and schedules that make it easy to prepare these items by simply filling in the blanks
• Proven techniques to help you become a smarter, sharper, and more accurate test taker

This publication may also be useful to university students enrolled in Intermediate, Advanced and
Cost Accounting; Auditing, Business Law, and Federal Income Tax classes; and Economics
and Finance classes.

Good luck on the exam,

Ray Whittington, PhD, CPA

The objectives of financial reporting are to provide:

• Information that is useful to potential and existing investors, lenders, and other creditors
• Information about the reporting entity's economic resources and claims against those resources
• Changes in economic resources and claims
• Financial performance reflected by accrual accounting
• Financial performance reflected by past cash flow
• Changes in economic resources and claims not resulting from financial performance

Private companyan entity other than a public business entity, a not-for-profit entity, or an employee benefit plan within the scope of Topics 960 through 965 on plan accounting.

The Private Company Decision-Making Framework: A Guide for Evaluating Financial Accounting and Reporting for Private Companies establishes the guidelines for using alternative guidance for private companies due to differences in information needs between public and private companies.

Significant differential factors between public business entities (public companies) and private companies:

• Number of primary users and their access to management
• Investment strategies of primary users
• Ownership and capital structure
• Accounting resources
• Learning about new financial reporting guidance

Examine the following for differential guidance:

• Recognition and measurement
• Disclosures
• Display
• Effective date
• Transition method

Assets

Liabilities

Equity