CPABC COIN Competition Sample Exam Notes

Exam Structure

  • Duration: 1 hour
  • Total Questions: 50 multiple-choice questions
  • Tie-Breaker: 51st question is only evaluated in case of a tie for 1st, 2nd, or 3rd place.

Key Concepts and Their Definitions

Entrepreneurship and Business Basics
  • Entrepreneur:
    • A person who risks both time and money to start and manage a business.
  • Profit:
    • The amount of money a business earns above its operational expenses.
  • Revenue:
    • The income generated from the sale of goods or services before expenses.
  • Standard of Living:
    • The measure of the amount of goods and services people can buy with their income.
  • Inflation:
    • A general rise in the prices of goods and services over time.
Economic Indicators
  • GDP (Gross Domestic Product):
    • The total market value of all finished goods and services produced within a country's borders in a specific time period.
  • Oligopoly:
    • A market structure where a small number of firms have significant market power.
Accounting Basics
  • Accounting:
    • The process of recording, classifying, and explaining financial transactions.
  • Financial Statements:
    • Income Statement: Displays revenues and expenses over a specific period.
    • Balance Sheet: Shows assets, liabilities, and equity at a specific point in time.
    • Cash Flow Statement: Details actual cash inflows and outflows.
  • Financial Accounting:
    • Provides useful financial information to external users.
  • Cost Accounting:
    • Provides information for internal users, focused on costs of production.
Business Organizations
  • Single Proprietorship:
    • A business owned by one person, who has unlimited liability.
  • Corporation:
    • A company that is a separate legal entity from its owners.
Accounting Equation and Financial Analysis
  • Accounting Equation:
    • Assets=Liabilities+Owner′sEquityAssets = Liabilities + Owner's Equity
  • Current Assets vs. Current Liabilities:
    • Key to assessing liquidity.
Adjusting Entries
  • Purpose:
    • To correct errors and update account balances.
Cost Structures in Business
  • Manufacturing Cost:
    • Includes direct materials, direct labor, and manufacturing overhead.
  • Administrative Costs:
    • Expenses related to the general operation of the company, such as executive salaries.
Specific Accounting Entries
  1. Purchasing Raw Material:
    • Debit Direct Material Inventory, Credit Accounts Payable.
  2. Recognizing Direct Labor:
    • Debit Work in Progress Inventory, Credit Wages Payable.
  3. Paying Wages:
    • Debit Wages Expense, Credit Cash.
  4. Recording Depreciation:
    • Debit Depreciation Expense, Credit Accumulated Depreciation.
CPA Competency Areas

The six technical competency areas of focus in the CPA Professional Education Program (PEP) include:

  • Management Accounting
  • Accounting Information Systems
  • Resource Consumption Accounting
  • Strategic Management
  • Audit and Assurance
  • Financial Reporting