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Exam content for CLEP Financial Accounting exam, which covers the basics of introductory financial accounting course:
General Topics (20%–30%) Generally accepted accounting principles Rules of double-entry accounting/transaction analysis/accounting equation The accounting cycle Business ethics Purpose of, presentation of, and relationships between financial statements Forms of business
The Income Statement (20%–30%) Presentation format issues Recognition of revenue and expenses Cost of goods sold Irregular items (e.g., discontinued operations, extraordinary items, etc.) Profitability analysis
The Balance Sheet (30%–40%) Cash and internal controls Valuation of accounts and notes receivable (including bad debts) Valuation of inventories Acquisition and disposal of long-term assets Depreciation/amortization/depletion Intangible assets (e.g., patents, goodwill, etc.) Accounts and notes payable Long-term liabilities (e.g., bonds payable) Owner's equity Preferred and common stock Retained earnings Liquidity, solvency, and activity analysis
Statement of Cash Flows (5%–10%) Indirect method Cash flow analysis Operating, financing, and investing activities
Miscellaneous (Less than 5%) Investments Contingent liabilities
Related test: CLEP Financial Accounting Exam Practice Test 1
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