Free BAR CPA Practice Question Walkthroughs

On this page you’ll find free BAR CPA practice question walkthroughs on topics from the AICPA CPA exam blueprints for the BAR exam.

BAR I: Business Analysis

A1

Analysis: Compare current period financial statement accounts to prior periods or budget and explain variances.

Analysis: Interpret financial statement fluctuations and ratios (e.g., profitability, liquidity, solvency, performance).

A2

Remembering & Understanding: Identify relevant non-financial and non-GAAP measures used to analyze an entity’s performance.

A3

Application: Calculate fixed, variable and mixed costs.

Application: Describe and use the different costing methods including absorption, variable, activity-based, process and job order costing.

B1

Application: Prepare a budget using supportable assumptions.

Application: Use forecasting and projection techniques to model financial results including revenue growth, cost and expense characteristics and profitability.

B2

Application: Calculate the cost of capital for a given financial scenario.

Application: Determine the impact of changes in an entity’s capital structure on cost of capital, loan covenants, liquidity and leverage.

B3

Application: Use assumptions (e.g., highest and best use, market participant assumptions, unit of account) and approaches (cost, income, market) to measure fair value.

B4

Remembering & Understanding: Recall the purpose and objectives of the COSO ERM framework.

Application: Use strategies to mitigate financial risks (e.g., market, interest rate, currency, liquidity).

B5

Remembering & Understanding: Determine the effect of supply and demand and elasticity measures on a product.

Remembering & Understanding: Calculate the effect of inflation on a product’s real price or an entity’s investments, debt and future expenses.

BAR II: Technical Accounting and Reporting

A

Application: Calculate the carrying amount of goodwill and other indefinite-lived intangible assets reported in the financial statements (initial and subsequent measurement, including impairment) and prepare journal entries.

B

Application: Calculate capitalized software developed for internal use or software developed for sale to be reported in the financial statements and the related amortization expense.

C

Analysis: Interpret agreements, contracts and/or other supporting documentation to determine the amount and timing of revenue to be recognized in the financial statements using the five-step model.

D

Application: Use a given fair value measurement of a share-based payment arrangement classified as equity to prepare journal entries to recognize compensation cost.

E

Application: Calculate the research and development costs to be reported as an expense in the financial statements.

F

Application: Prepare journal entries to record the identifiable net assets acquired in a business combination that results in the recognition of goodwill or a bargain purchase gain.

G

Remembering & Understanding: Recall the basic functional currency concepts including the indicators to be considered when determining a subsidiary’s functional currency.

Application: Calculate foreign currency translation adjustments (local currency to functional currency and/or functional currency to reporting currency) to prepare consolidated financial statements.

H

Remembering & Understanding: Identify the characteristics of a freestanding and/or embedded derivative financial instrument to be recognized in the financial statements.

Remembering & Understanding: Recall the appropriate presentation of gains and losses on derivative financial instruments (swaps, options and forwards) in the financial statements.

I

Remembering & Understanding: Identify the criteria for classifying a lease arrangement for a lessor.

Application: Calculate the amount of lease income that a lessor should recognize in the income statement.

J

Remembering & Understanding: Recall the criteria used to identify reportable segments.

Remembering & Understanding: Recall the financial statement note disclosure requirements for reportable segments.

K

Remembering & Understanding: Identify the required financial statements for a defined benefit pension plan and a defined contribution pension plan; Remembering & Understanding: Recall the disclosure requirements for the notes to the financial statements of a defined benefit pension plan and a defined contribution pension plan.

BAR III: State and Local Governments

A1

Remembering & Understanding: Identify and recall basic concepts and principles associated with government-wide financial statements (e.g., required activities, financial statements, financial statement components).

Application: Prepare the government-wide statement of net position for a state or local government from trial balances and supporting documentation.

Application: Prepare the government-wide statement of activities for a state or local government from trial balances and supporting documentation.

A2

Remembering & Understanding: Identify and recall basic concepts and principles associated with governmental fund financial statements (e.g., required funds, financial statements, financial statement components).