If you’re preparing for your ACCA Financial Accounting (ACCA FA) exam, don’t worry. In this article, we explore several questions and concerns to help you get the most out of your revision. This includes:
- The core areas and objectives of the exam
- How the exam is structured
- The benefits of studying ACCA FA
- Key challenges and strategies
- Example exam question
- Additional resources
What are the exam topics?
The ACCA Financial Accounting (FA) exam introduces the essentials of financial reporting and fundamental skills necessary for preparing accurate financial statements. Core topics include:
- Context and purpose of financial reporting: Regulatory frameworks and the role of accounting standards.
- Qualitative characteristics of financial information: Ensuring information is relevant, reliable, comparable, and understandable.
- Double-entry bookkeeping: Accurate recording of financial transactions.
- Recording transactions: Inventory management, depreciation, adjustments, irrecoverable debts, accruals, and prepayments.
- Preparing financial statements: Income statements, balance sheets, and cash flow statements.
- Consolidation basics: Understanding group accounts and consolidations.
- Interpretation and analysis: Using ratios to interpret financial data for decision-making.
What is the exam structure?
The ACCA FA exam is a two hour computer-based exam (CBE), comprising two compulsory sections.
| Section | Number of marks |
|---|
Section A - 35 objective test questions
- 2 marks per question
Questions include: - Multiple choice
- Multiple response
- Number entry
- Matching styles
| 70 marks |
Section B - Two multi-task questions
- 15 marks per question
These questions require a deeper application of financial accounting skills. They typically involve preparing extracts from financial statements, adjustments and the interpretation of financial data. | 30 marks |
Timings
Effective time management is vital. Aim for 1.2 minutes per mark, and allocate around 80 minutes for Section A and 40 minutes for Section B.
How does the ACCA FA exam subject help towards my career and/or studies?
Financial Accounting is foundational to the ACCA qualification and essential for your career growth.
This subject:
- Establishes solid accounting principles for higher-level subjects such as Financial Reporting (ACCA FR) and Strategic Business Reporting (ACCA SBR).
- Prepares you for senior finance roles, including Finance Director, Financial Controller, Chief Financial Officer (CFO), and Audit Manager.
- Enhances professional credibility by providing skills in financial statement preparation, consolidation, and interpretation, which is valuable in advisory and leadership roles.
Common challenges and tips for the ACCA FA exam
Double-entry bookkeeping
Many learners find mastering double-entry challenging, particularly when dealing with more complex journal entries like adjustments for accruals, prepayments, depreciation, and irrecoverable debts. Misposting these can lead to inaccuracies throughout your financial records.
Time management
The multi-task questions within Section B require significant thought and careful calculation, which can result in time pressure.
Understanding consolidated financial statements
Consolidation questions, including goodwill calculation and elimination of intra-group transactions, frequently cause confusion. The concepts of control, non-controlling interests, and intra-group eliminations are typically challenging for learners encountering them for the first time.
Addressing these challenges
- Build confidence in double-entry by regularly practising journal entries through workbook examples and exam kit questions, which helps reinforce your understanding. Using T-accounts frequently during revision can visually clarify how each transaction impacts financial statements, building stronger foundations for the rest of the syllabus.
- Consistently practice timed mock exams and use ACCA’s CBE platform to improve pacing and efficiency. Allocate specific times per question and move on if stuck, returning later if possible.
- Always answer every question in the exam, as there is no negative marking. Even an educated guess might yield extra marks. Tackle all questions you find easy first, flagging more challenging questions to come back to later. This allows you to pick up marks as efficiently as possible. Developing good exam techniques will stand you in good stead for the rest of your qualification.
- Practice consolidation step-by-step. Consolidation requires a methodical approach. Focus your studies on mastering each step separately (e.g., calculating goodwill, adjusting for unrealised profits, and non-controlling interests) before integrating them into a complete consolidation question. Using simplified examples initially will build your confidence before attempting more complex scenarios.
Example question and answer
Which accounting principle is described by the following statement?
“It is a threshold quality that requires that information be disclosed if it is likely to affect decisions made by users of financial statements.”
(A) Prudence
(B) Materiality
(C) Going concern
(D) Business entity
Answer: B, Materiality
Answer explanation:
First, let’s look at why the other options are incorrect:
(A) Prudence: Prudence means exercising caution when making judgments under conditions of uncertainty, ensuring that assets or income are not overstated and liabilities or expenses are not understated. It does not relate to the threshold for disclosure based on influencing user decisions.
(C) Going Concern: The going concern principle assumes that a business will continue to operate for the foreseeable future and will not be forced to liquidate its assets. This principle is fundamental to how assets and liabilities are valued but does not define disclosure thresholds.
(D) Business Entity: The business entity concept states that a business is considered a separate entity from its owners for accounting purposes. This ensures that the financial affairs of the business are kept distinct from the personal affairs of its owners, but it doesn't describe disclosure requirements based on user decision-making.
Final thoughts
Passing the ACCA FA exam requires systematic study, regular question practice, and a clear understanding of fundamental principles. Leverage all available ACCA resources, regularly practice under timed conditions, and approach the exam with confidence.
Additional support and resources
If you’re not already studying ACCA FA with us at Kaplan, give yourself the best chance to pass the exam with our ACCA Financial Accounting (FA) course. With four study methods, you’ll find a course that’s perfect for you.
When studying with Kaplan, you will have access to the Academic Support team via the ‘contact a tutor’ option on your MyKaplan. They are available seven days a week and can support you with any tricky topics via live chat, email, or by requesting a call back.
And, if you have any additional learning needs, get in touch with our inclusion team, who can support you.
Practicing exam-standard questions in timed conditions is essential when preparing for your real exam. Be encouraged to practice questions in the ACCA practice platform when possible.
Alternatively, Kaplan Publishing, an ACCA Content Partner, also offers ACCA Study Texts, Exam Kits and Pocket Notes - which cover the full syllabus and help you feel exam-confident.
Read our blog for additional tutor tips for other exam subjects.