STUDY PROGRAM FOR FAR (for use in taking the exam prior to 2011)

 

To pass the Financial Accounting and Reporting (FAR) section of the CPA Exam, you need a program that will guide you through the process.    Please read this entire document before you begin to study.  

 

Overview

 

The FAR exam is four hours in length and, until the end of 2010, is made up of 90 multiple-choice questions and two simulations.    Approximately 17 percent of the exam questions are not graded but, rather, are included so that the validity of those questions can be ascertained for possible future use.

 

The AICPA, which creates the CPA Exam, provides sample exams and a tutorial at:

 

http://www.aicpa.org/BecomeACPA/CPAExam/ForCandidates/TutorialandSampleTest/Pages/exam_tutorial_parallel.aspx

 

As noted in the schedule below, you should check out this official guidance early in your study program so that you are familiar with the physical characteristics of the exam.     You can also look over the information provided by the AICPA about the content of the exam at: 

 

http://www.aicpa.org/BecomeACPA/CPAExam/ExaminationContent/ContentAndSkills/DownloadableDocuments/CPA_Exam_CSOs_revised_10_05.pdf

 

The more you know about the CPA Exam, the easier it is to pass.  

 

The pass rate for FAR (as well as the other three sections) is approximately 50 percent.   A passing grade is 75 although that should not be equated to 75 percent correct answers.   The examiners use a weighting system to give harder questions a higher value.   There is no penalty assessed for a wrong answer so all questions on the exam should be answered even if that answer is no more than a guess.

 

The FAR exam starts with a testlet of 30 multiple-choice questions.   When those answers are submitted, another testlet of 30 more multiple-choice questions is provided.    For this second testlet, there are two possible batches of questions—one slightly harder than the other.   If the candidate does well on the first testlet, the harder batch serves as the second testlet.  If the candidate does not do so well on the first testlet, the easier batch is provided.   The same process is repeated after the second testlet.   The difficulty of the third group of questions depends on how well the candidate did on the second testlet.

 

In the simulations, there will be a number of tabs, each with a different type of question including a research component and a written communications component.   Make sure, when you get to those areas listed below, that you study the sample simulations carefully.

 

 

Study Program 

 

This study program is made up of the free questions and answers available at www.CPAreviewforFREE.com and the content that we provide in this subscription service.  

 

When working questions, you should never guess.   Although that is important when taking the actual examination, guessing can be misleading during your preparation (getting a question right by luck might fool you into thinking you actually know the topic).   Read each answer carefully, especially if you did not select the correct choice.    Your goal is always to be adding points.   Your only objective is to get to 75 points on the CPA Exam.   You do that by adding points when you study.  

 

Keep a notebook with you when you are answering questions.   If you miss a question, read the answer and try to take a short note (preferably 10 words or less) that will help you get it (or a similar question) right the next time.   Then, periodically, review those notes to keep that “helpful” material fresh in your mind.  

 

One important preparation question is whether you should work the free questions first or go through the subscription content material first.   Here are two approaches.  You may want to practice both to see which seems to work best for you.

 

If You Are Not Comfortable With a Topic (such as Accounts Receivable or Leases)

Step 1 – Read the content material first.   It is not designed to provide you with an answer for all questions but rather to help you establish a basic level of understanding that will enable you to pass.

Step 2-Work the corresponding question area in the free questions.  As suggested, take short notes on those that you miss. 

Step 3-If you get 70-80 percent of the free questions correct, move on to the next topic.  You probably know enough to pass that topic.

 

Step 4-If you do not get 70-80 percent of the questions correct, read the content material again and read all of your 10-word notes for that topic.

Step 5-Go through all of the questions again and try to get 10 percent more of the answers correct.   If you got 20 out of 40 on the first attempt, shoot for 24 the second time.

Step 6-Move on to the next topic.

 

You Are Already Comfortable With a Topic (such as Accounts Receivable or Leases)

Step 1 – Work the free questions on the topic first.   As always, take short (10 word) notes on those questions that you miss.

Step 2 – If you get 70-80 percent of the free questions correct, move on to the next topic.

 

Step 3-If you do not get 70-80 percent of the free questions correct, read the related content material carefully and read all of your 10-word notes for that topic.

Step 4-Go through all of the questions again and try to get 10 percent more of the answers correct.   If you got 20 out of 40 on the first attempt, shoot for 24 this time.

Step 5-Move on to the next topic.

 

Study Sessions

 

The length of the following study sessions can vary from 30 minutes to 3 hours.   Study sessions can be combined or they can be broken down into two or more sessions.   You need to adjust the program so that it allows you to study when and where you can.

 

Study Session One

--Subscription Content Area:   Accounts Receivable

--Free Questions:  Accounts Receivable

 

Study Session Two

--Subscription Content Area:  Inventory and Present Value

--Free Questions:  Inventory

 

Study Session Three

--Subscription Content Area:  Notes and Bonds Payable  

--Free Questions:  Notes and Bonds Payable

 

Study Session Four

--Subscription Content Area:   Land, Buildings, and Equipment and Intangible Assets

--Free Questions:  Land, Buildings, and Equipment and Intangible Assets

 

Study Session Five

--Reread all of your 10 word notes for the topics in sessions one through four

--Free Questions:  Rework every fourth question in the topics in sessions one through four

 

Study Session Six

--Subscription Content Area:   Statement of Cash Flows and Written Communications

--Free Questions:  Statement of Cash Flows

 

Study Session Seven

--Subscription Content Area:  Stockholders’ Equity and Research

--Free Questions:  Stockholders’ Equity

--Go through the tutorial and sample tests made available by the AICPA at:  http://www.aicpa.org/BecomeACPA/CPAExam/ForCandidates/TutorialandSampleTest/Pages/exam_tutorial_parallel.aspx

 

Study Session Eight

--Subscription Content Area:  Earnings Per Share and Sim1-Land, Buildings, Equipment  

--Free Questions:  Earnings Per Share

 

Study Session Nine

--Subscription Content Area:  Leases and Contingencies and Other Liabilities  

--Free Questions:  Leases and Contingencies and Other Liabilities

 

Study Session Ten

--Reread all of your 10 word notes for the topics in sessions six through nine

--Free Questions:  Rework every fourth question in the topics in sessions six through nine

 

Study Session Eleven

--Subscription Content Area:  Investments in Securities

--Reread all of your 10 word notes for the topics in sessions one through four  

--Free Questions:  Investments in Securities

 

Study Session Twelve

--Subscription Content Area:  Financial Statements and Revenue Recognition  

--Free Questions:  Financial Statements and Revenue Recognition

 

Study Session Thirteen

--Subscription Content Area:  Not-for-Profit Organizations and Sim2-Investments

--Free Questions:  Not-for-Profit Organizations

 

Study Session Fourteen

--Subscription Content Area:   Deferred Income Taxes 

--Free Questions:  Deferred Income Taxes

 

Study Session Fifteen

--Reread all of your 10 word notes for the topics in sessions eleven through fourteen

--Free Questions:  Rework every fourth question in the topics in sessions eleven through fourteen

 

Study Session Sixteen

--Subscription Content Area:   Consolidated Financial Statements

--Reread all of your 10 word notes for the topics in sessions one through four and six through nine

--Free Questions:  Consolidated Financial Statements

 

Study Session Seventeen

--Subscription Content Area:   State and Local Government Accounting

--Free Questions:  State and Local Government Accounting

 

Study Session Eighteen

--Subscription Content Area:   Pensions and Other Postretirement Benefits 

--Free Questions:  Pensions and Other Postretirement Benefits

 

Study Session Nineteen

--Subscription Content Area:   Derivatives and Reporting Foreign Currency Balances

--Free Questions:  Derivatives and Reporting Foreign Currency Balances

 

Study Session Twenty

--Reread all of your 10 word notes for the topics in sessions sixteen through nineteen

--Free Questions:  Rework every fourth question in the topics in sessions sixteen through nineteen

 

Study Session Twenty-One

--Free Questions:   Work questions selected by the computer in the random mode (to look like a test format)—do as many sets of these as you can.

--Reread all of your 10 word notes as often as you can.

 

 

GOOD LUCK – DO THE WORK AND MAKE IT HAPPEN.  YOU ONLY NEED 75 POINTS.  WORK TO GET EACH ONE YOU CAN.