Governmental and nonprofit accounting together account for 16-24% of the FAR exam. That is between a fifth and a quarter of the questions on the exam. Many candidates are not familiar with these two sections as most colleges don’t teach these in their accounting programs.
In addition, there’s only a minority of candidates who have worked at nonprofits or government entities or have even audited them. That may make candidates feel some anxiety because there are a few fundamental concepts that are different than financial accounting. If you are one of those candidates, don’t worry; they are simpler than you think.
If you have a solid foundation in financial accounting, it will be easy for you to pick up on the differences. Remember, those are easy sections; they are just different. If you ignore these sections because you are tight on time and you are uncomfortable with them, you’ll be making a big mistake. Keep in mind that there is also some new terminology that requires memorization. Spend some time on these 2 topics and you’ll know that you have 20% of the FAR exam in your back pocket. That will give you better peace of mind and motivation for when you’re tackling this beast of the CPA Exam.
Here are some tips to help you attack these 2 sections:
• Read the text once, twice, or even 3 times
• Do all the MCQs at least twice
• Don’t skip the task based simulations
• Practice writing the JEs
• Memorize the acronyms for the different types of governmental funds
• Know the names of the different financial statements for each governmental fund type
• Be very familiar with the different NFP statements
• Focus on the Statement of Activities and the different types of restrictions and re-classifications in between them
I understand that it can be scary learning completely new information and that some candidates would therefore leave it last or don’t have the same amount of motivation to delve into them. However, trust me. Give Governmental & Nonprofit accounting the attention they deserve and you won’t regret it!
“Success is the sum of small efforts, repeated day-in and day-out.” – Robert Collier
Margo Pacific, Guest Blogger for Roger CPA Review
– See more at: https://www.rogercpareview.com/blog/importance-governmental-nonprofit-accounting-far#sthash.9D0A5FnA.dpuf