CPA FAR Financial Accounting and Reporting Exam Guide 2026
Video
Under the FASB Conceptual Framework, which of the following is a fundamental qualitative characteristic of useful financial information?
Cpa Far Conceptual Framework
Question · Easy
DEA-LER: debits and credits, screamed
Short
A 2026 CPA FAR guide for format, AICPA blueprint areas, high-yield GAAP traps, TBS strategy, official source checks, and free FAR practice routing.
Blog
What are the five required financial statements for a nongovernmental for-profit entity under US GAAP?
Financial Statements
Flashcard
Which financial statement reports an entity's revenues, expenses, gains, and losses for a period of time?
Cpa Far Financial Statements
Present right of an entity to an economic benefit; it can help by being exchanged, used to produce something of value, or used to settle liabilities.
Financial reporting
Guess the Term
Chapter 1: Conceptual Framework and Standard Setting
1.1 Conceptual Framework
Study guide
Cheat sheet
Per ASC 606, the five-step revenue recognition model begins with which step?
Cpa Far Revenue Recognition
Read the clue and guess the term in 6 tries.
Game
A company discontinues a component that represents a major strategic shift with a major effect on operations. How is it reported?
On January 1, Year 1, Lion Co. entered an operating lease with a 5-year term and annual payments of $10,000 due at year-end. The implicit rate is 6%, and the present value of the lease payments is $42,124. What is the right-of-use (ROU) asset recorded at lease commencement?
Cpa Far Leases
Question · Medium
Residual ownership claim in a business, measured as what it owns minus what it owes.
Under ASC 842, a lessee classifies a lease as a finance lease if any of the following criteria are met EXCEPT:
ASC 606: the trailer
Classify each of the following as an operating, investing, or financing cash flow activity: interest paid, dividends paid, and purchase of equipment.
Which inventory method is NOT permitted under U.S. GAAP?
Cpa Far Inventory
Rise in equity from events outside ordinary revenue and owner contributions.
1.2 Standard Setting and GAAP vs. IFRS
Tiger Co. uses the LIFO inventory method. At year-end, inventory cost is $100,000 and net realizable value is $95,000. Replacement cost is $92,000 and NRV less normal profit is $88,000. At what value should the inventory be reported?
Question · Hard
Swap tiles to line up three of the same term.
Term Match
How is an error discovered in a prior-period financial statement corrected?
Bear Co. (a non-LIFO/non-retail entity) has inventory with cost of $50,000 and net realizable value of $45,000. At what value is inventory reported?
Fall in equity from events outside ordinary expenses and owner distributions.
Eagle Co. purchased equipment for $100,000 with a 5-year life and $10,000 salvage value. Using the double-declining-balance method, what is depreciation expense in Year 2?
Cpa Far Ppe
What distinguishes a recognized (Type I) subsequent event from a nonrecognized (Type II) subsequent event?
Under ASC 360, an impairment loss on a long-lived asset held and used is recognized when:
Profitability figure presented in basic and diluted form, with a reconciliation of the numerators and denominators used in the two computations.
Public company reporting
1.3 Special Purpose Frameworks
Wolf Co. acquired Fox Co. for $500,000. Fair value of identifiable net assets was $420,000. What is the goodwill recognized?
Cpa Far Business Combinations
Flip two cards at a time to find matching terms.
Term Pairs
What measurement focus and basis of accounting do governmental funds use, versus government-wide statements?
Governmental Accounting (GASB)
Per ASU 2017-04, how is goodwill impairment measured for public business entities?
U.S. GAAP abbreviation for a charity, foundation or university whose statement of financial position shows two classes of net assets.
Charitable reporting
Hawk Co. issued $1,000,000 face value bonds at 102 with detachable warrants. Fair value of bonds without warrants is $960,000; fair value of warrants is $80,000. Using the proportional (relative fair value) method, how much should be allocated to APIC — Warrants?
Cpa Far Bonds
List GASB 54's five fund balance classifications from least to most spendable-restricted.
Owl Co. issued $500,000 face value 5%, 10-year bonds when the market rate was 6%. The bonds will be issued at:
Money that can be used to pay for goods or services, whose receipts and payments are classified as operating, investing or financing activities in the financial statement that reports them.
Liquidity
Chapter 2: Financial Statement Presentation
2.1 Balance Sheet and Income Statement
Crow Co. has pretax book income of $200,000. The only book/tax difference is $20,000 of MACRS depreciation in excess of book depreciation. The tax rate is 21%. What is current tax expense?
Cpa Far Income Taxes
Find five hidden terms in a grid of letters.
Term Search
Which governmental fund is the only one that can report a positive Unassigned fund balance?
Per ASC 740, deferred tax assets must be evaluated for which of the following?
Cost-flow method still using the lower of cost or market because the 2015 simplification excludes it and retail-method stock.
Inventory
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