CPA Exam Tips and Common Pitfalls

Strategies for Success

Governmental accounting questions often test the ability to identify the correct fund, determine the proper basis of accounting, and distinguish between fund statements and government-wide statements.

• Know all governmental, proprietary, and fiduciary funds.
• Remember which funds use modified accrual versus accrual accounting.
• Distinguish government-wide statements from fund statements.
• Understand fund balance classifications.
• Know that capital assets and long-term debt appear only in government-wide statements for governmental activities.
• Remember GASB governs state and local governmental accounting.

The key to governmental accounting is identifying the correct fund before applying accounting rules.