Intermediate Accounting Practice study guide
Intermediate Accounting Practice · Work through your exam, one topic at a time.
Intermediate Accounting Practice is a subject-matter examination covering the financial accounting topics that sit between introductory bookkeeping and advanced professional practice. It is aimed at candidates who already understand the accounting cycle-journal entries, adjusting entries, closing, and basic financial statement preparation-and who now need to work confidently with measurement, recognition, and disclosure rules for the major statement line items. The Intermediate Accounting Practice study guide has 10 sections and about 3,968 words.
01Conceptual Framework, Standard Setting, and Financial Reporting
The framework section tests whether you can reason from the objective of general purpose financial reporting rather than memorize rules. Questions ask you to classify an item as an asset, liability, or equity; apply the qualitative characteristics; choose a measurement basis; and identify which standard setter or pronouncement governs a US GAAP issue.
423 words, about 2 min02Revenue Recognition and Contracts with Customers
Revenue is tested through the five-step model in ASC 606 and IFRS 15: identifying the contract, identifying performance obligations, determining the transaction price, allocating it, and recognizing revenue when obligations are satisfied. Questions also cover contract costs, principal-agent issues, warranties, returns, and licensing.
396 words, about 2 min03Cash, Receivables, and Inventory
This domain covers cash and cash equivalents, bank reconciliations, restricted cash, the allowance for credit losses, factoring and notes receivable, inventory costing, cost-flow methods, and lower-of-cost measurement under ASC 326, ASC 330, and IAS 2. Cash equivalents are short-term, highly liquid investments with an original maturity of three months or less.
430 words, about 2 min04Property, Plant, Equipment, Intangibles, and Impairment
This domain tests initial and subsequent measurement of PP&E, depreciation, asset retirement obligations, internally generated and purchased intangibles, goodwill, and impairment under ASC 360, ASC 350, ASC 730, IAS 16, and IAS 36. Cost includes the purchase price, directly attributable costs, and estimated dismantling and restoration costs recognized as an asset retirement obligation.
405 words, about 2 min05Investments and Financial Instruments
This domain covers classification and measurement of debt and equity investments, the fair value hierarchy, the equity method, and impairment under ASC 320, ASC 321, ASC 323, ASC 820, IFRS 9, and IAS 28. US GAAP debt securities are held-to-maturity at amortized cost, trading at fair value through net income, or available-for-sale at fair value through OCI, with credit losses recognized through an allowance.
386 words, about 2 min06Current and Noncurrent Liabilities, Bonds, and Leases
This domain covers current liability classification, contingencies, bond issuance and effective interest amortization, extinguishment, and lease accounting under ASC 470, ASC 450, ASC 842, IFRS 9, and IFRS 16. Current liabilities are due within one year or the operating cycle.
424 words, about 2 min07Income Taxes
This domain tests current and deferred income taxes, temporary and permanent differences, valuation allowances, uncertain tax positions, and presentation under ASC 740 and IAS 12. Current tax expense equals taxable income times the enacted tax rate.
365 words, about 2 min08Pensions and Other Postretirement Benefits
This domain tests defined contribution and defined benefit pensions, pension expense components, funded status, OCI recognition, and other postretirement benefits under ASC 715 and IAS 19. A defined contribution plan expense is the required contribution; the employer has no further obligation.
349 words, about 2 min09Stockholders' Equity, Share-Based Compensation, and EPS
This domain covers common and preferred stock, additional paid-in capital, retained earnings, treasury stock, dividends, stock splits, share-based payment, and basic and diluted EPS under ASC 718, ASC 260, and IAS 33. Common stock and additional paid-in capital are recorded at par or stated value plus excess.
394 words, about 2 min10Statement of Cash Flows and Financial Statement Analysis
This domain tests cash flow classification and preparation, direct and indirect methods, free cash flow, ratio analysis, DuPont decomposition, and earnings quality under ASC 230 and IAS 7. Operating activities include cash from revenue and expenses.
396 words, about 2 min