[STICKY] CLEP Study Guide

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    This guide is intended for individuals who want to obtain college credit through the CLEP program. The CLEP program is created and administered by the college board. The basic idea of CLEP is that it allows individuals to self-study for certain topics and obtain college credit. Generally, the topics are related to courses that a first-year undergraduate college student would take. The credit granting process is governed by taking a proctored examination in the subject. Upon obtaining a satisfactory score, the score can be submitted to various colleges and universities to obtain college credit. Thousands of colleges and universities accept CLEP credits. For additional information on the CELP program, visit the official CLEP website. To see if your college or university accepts CLEP credit, please visit your university’s website or contact them directly.

    Accounting Compendium’s course in financial accounting can successfully prepare students to take and pass the financial accounting CELP exam. In fact, our financial accounting course is very detailed compared to what you need to know for the CLEP financial accounting exam. This guide will help assist students who just want to take and pass the CLEP financial accounting exam without having to complete our entire financial accounting course.

    The first step to preparing for the CLEP financial accounting exam is to review how the exam will be proctored and what topics are tested on the exam. This list summarizes how the exam is structured:

    1. 90 minutes to complete the exam
    2. 75 multiple choice questions
    3. Tests topics which are covered in a first-year undergraduate financial accounting course (our course covers all of these topics extensively)

    The college board has provided a list of topics covered on the exam with a percentage weight for each general group of topics, the breakdown is as follows. We have also listed the chapter in our textbook where the topic is covered:

      General Topics (20-30%)

        Generally accepted accounting principles (CH 4)
        Rules of double-entry accounting/transaction analysis/accounting equation (CH 2 and 3)
        The accounting cycle (CH 2 and 3)
        Business ethics (CH 1)
        Purpose of, presentation of, and relationships between financial statements (CH 4)
        Forms of business (CH 1)

      The Income Statement (20-30%)

        Presentation format issues (CH 4)
        Recognition of revenue and expenses (CH 5)
        Cost of goods sold (CH 7)
        Irregular items (e.g., discontinued operations, extraordinary items, etc.) (CH 4)
        Profitability analysis (CH 4)

      The Balance Sheet (30-40%)

        Cash and internal controls (CH 5)
        Valuation of accounts and notes receivable (including bad debts) (CH 10)
        Valuation of inventories (CH 8)
        Acquisition and disposal of long-term assets (CH 6)
        Depreciation/amortization/depletion (CH 6)
        Intangible assets (e.g., patents, goodwill, etc.) (CH 13)
        Accounts and notes payable (CH 10)
        Long-term liabilities (e.g., bonds payable) (CH 12)
        Owner’s equity (CH 15)
        Preferred and common stock (CH 15)
        Retained earnings (CH 15)
        Liquidity, solvency, and activity analysis (CH 4)

      Statement of Cash Flows (5-10%)

        Indirect method (CH 16)
        Cash flow analysis (CH 16)
        Operating, financing, and investing activities (CH 16)

      Miscellaneous (less than 5%)

        Investments (CH 9)
        Contingent liabilities (CH 10)

    In summary, all chapters are tested except chapters 11, 14, 17, 18 and 19. Those chapters are generally taught in intermediate accounting courses. Our textbook covers the basic concepts from those topics to prepare students for a course in intermediate accounting. If you are not planning to advance to an intermediate accounting course then those chapters can be skipped.

    Well, that sums it up! If you have any comments or suggestions, please post!

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