Set yourself up for success by getting the inside track on this Certificate Level and ICAEW CFAB exam.
At a glance
Sitting: on demand
Duration: 2 hours
Format: Two long-form questions (40%) and 24 multiple-choice questions (60%)
Pass mark: 55%
Syllabus weighting:
- Accounting concepts, ethics and sustainability (15%)
- Maintaining financial records (20%)
- Adjustments to accounting records and financial statements (20%)
- Preparing financial statements (45%)
Need to know
When people think about accounting, they usually think about sets of accounts – and this exam focuses on two key elements of that. First, the concept of profit, and how that’s displayed, explained and used as a metric for business success. Second, the balance sheet; on one side what the business owns, and on the other how it’s been funded. The reputation of the profession depends on the quality of the work we conduct and the way in which we conduct ourselves, so there are essential elements of ethics and non-financial reporting interwoven throughout.
Accounting Fundamentals teaches you how to understand and interpret final accounts, setting you up for the financial reporting elements of Assurance, Risk and Reporting at Professional Level. It’s often one of the first ACA exams students face, and there’s a lot to learn in a short space of time, especially for those with little or no prior technical knowledge. The exam is two hours long and consists of 24 multiple-choice questions worth 2.5 marks each, and two long-form questions where you’ll be asked to prepare and adjust draft financial statements, worth 25 and 15 marks respectively.
How to approach it
The best way to prepare for Accounting Fundamentals is to practise, practise, practise. The question bank is far more important than the workbook – you should only be using the latter as a reference point if you’re getting questions wrong – and if you use it well, there’ll be no nasty surprises in the exam. Practising to time is essential, too – and not just individual questions, but learning to balance the demands of a full two-hour exam. It’s also important to familiarise yourself with the exam environment using the practice software. Creating muscle memory of navigating the system could save you vital seconds in the real thing and mean the difference between passing and failing.
One area that students often find challenging is double-entry bookkeeping, and the implications of a decision on both the income statement and the balance sheet. It can be tricky spatially in your head trying to consider both sides at the same time, so consider writing things down. In some questions, you might be asked about how something will affect just the balance sheet – but if you can do both sides, you can do one. Students also tend to find some of the ethical or theoretical questions more difficult than the numerical ones.
Many students like to get the multiple-choice questions out of the way first, but it’s all down to personal preference. If you love balance sheets, for example, and the big long-form question is a balance sheet one, there’s definitely an argument for tackling that first and getting 25 marks in the bank before moving on to the rest. Don’t assume the multiple-choice questions will be more straightforward: they range in complexity, and there will often be a number of plausible alternatives to choose from. When you’re practising, it’s important to go back and understand how and why you got something wrong, rather than just shrugging your shoulders and moving on – make sure you’ve thoroughly learned the underlying principles.
Read more about Accounting Fundamentals in the ACA Syllabus Handbook.
