CLEP Financial Accounting

[never2late]

Yes I took the test and passed.

Here is the best I can do for recollection:

If I were going to take this test, I would definitely study what belongs where on the financials statements, like revenue and expenses belong on the income statement and assets and liabilities belong on the Balance sheet

The right side of a T account is what:
a. debit
b. crebit
c. asset
d. liability

You should probably study what the definition of the chart of accounts is and what its purpose is.

You might want to know how to record entries like this:

The journal entry on September 12 for fees earned on account for $13,500 would be recorded as follows:
(dr is short for debit if you don't know this)
a. dr cash 13500 cr sales 13500
b. dr sales 13500 cr cash 13500
c. dr accounts receivable 13500 cr sales 13500
d. dr cash 13500 cr accounts receivable 13500

My version of the test had many of these types of questions, and several were rather tricky in there wording, so READ WITH CAUTION.

It is really important for you to know whether an account would normally have a debit balance or a credit balance.

You may want to study the different types of reports and what they are used for; such as what is the trial balance used for and when; why you would need adjusting entries; you might want to be familiar with accrued revenue and where it is recorded on the BALANCE SHEET IN THE LIABILITY SECTION; calculating the ending balance of an account may come up so you need to understand what would affect the balance of the account.

I had a couple of T accounts with amounts under each side. I had to calculate what the ending balance was and specify if it was a credit or a debit balance. (REMEMBER - THE LEFT SIDE OF A T ACCOUNT IS ALWAYS A DEBIT AND THE RIGHT SIDE IS ALWAYS A CREDIT)

You might want to review the accounting cycle and Which report comes first and so on. Statement of retained earnings may be of some interest to you as well. You also might want to know what the sub sections of the balance sheet are like: Liabilities, Assets, Current Assets, Long-term Liabilities, Owners Equity, Inventory

You might also want to familiarize yourself with which accounts get closed out and which do not. You also may be interested in what a fiscal year is (does it have to be a calendar year - NO),

What are the correct steps in the accounting cycle.

How do you know if it is a loss or a profit based solely on the income statement? Where is this balance reflected on the balance sheet?

Had a couple of questions about fixed assets and depreciation. How is depreciation recorded and what 2 accounts are affected and where do these show up on the statements.

How would you record purchases on account, how are inventories affected at month end for sales, determine the gross profit based on several items ( be very careful here, because some of the items listed my not affect the account you are working with)

Deteremine the cost of inventories based on LIFO and FIFO and determine which way would be best for a company

Determine the cost of merchandise sold based on a series of entries

The cost method that will show the highest gross profit during times of inflation is the: average specific fifo or lifo

I had 2 questions about internal controls and the Sarbanes-Oxley Act of 2002

I remember a couple of questions about stocks - types of stock and how they affect the balance sheet or income statement

Know the different types of entities: corporation, individual, limited partnership, s corporation, not for profit - and how they are taxed

You might study how entries are recorded if a company purchased a building on credit.

You should probably review bonds and how they would affect your balance sheet, and what are treasury stocks

Cash flow statements might come up and what would be reflected on this type of report

You also may be asked to calculate what the percentage of increased sales are from one year to the next

Know what a quick asset is

Know how to calculate accounts receivable turnover rate

This is all I have - but if i think of anything else I will post it

[sgloer]

Great work and amazing feedback never2late!

[Gidu]

Good on you for the pass. And wow on the recollection. Thanks for the feedback and anything more you have to add.

[BeeMarie]

Passed Financial Accounting today (the new version) and I have some good news.

There is a calculator! It's at the bottom of the screen and is available for use with every question. It is a simple windows style calculator, so if you do your practice with Instacert using your regular desktop calculator you'll be well prepared.

Also, the test is 75 questions and you have 90 min to complete. I only ended up with a few minutes left at the end to review, so time on this test is critical in my opinion.

I only passed with a 56, and I felt the test was pretty difficult. Last night I downloaded the official CLEP study guide for this test and was able to answer 70% of the 47 questions correctly. However, I felt the actual test (at least my version of it) was more difficult than the study guide.

A couple of things I wish I had a better handle on:

Cash Flow statement items: specifically dividends, bonds, par and book value.

Also, there is a concept mentioned called time-period, and I would find out whether this is a real concept or not (don't care now that I've already passed.)

I never did find any book or guide that covered all the material, and used many different books and internet sources. The Instacert helped me, especially the first couple of sections. However, I confess I never made it through all of the flash cards because I felt too bogged down with all the math. On hindsight, I probably could have benefited from toughing it out and doing the math.

Hope this info helps someone else out.

~Bee