Section 1: 30–40%1A1
Balance Sheet / Statement of Financial Position
Exam insight
Classification questions dominate this topic - current vs. non-current, operating cycle vs. 12 months, and where deferred taxes go. The AICPA loves giving you a note payable due in 13 months and asking if it's current. Spoiler: it's non-current, unless you've violated a covenant. Lock down the classification rules and these become easy points.
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What AICPA wants you to know
- 1Apply the accounting equation: Assets = Liabilities + Equity
- 2Classify assets and liabilities as current vs. non-current
- 3Identify what belongs in each section of the balance sheet
- 4Apply the one-year rule for current vs. non-current classification
- 5Understand offsetting rules (when assets and liabilities can be netted)