CPA PEP: Core 1 - Study guides, Class notes & Summaries

ASPE 1506.27 - Accounting Errors - Answer An entity shall correct material prior period errors retrospectively in the first set of financial statements completed after their discovery by: A. Restating the comparative amounts for the prior period(s) presented in which the error occurred; if the error occurred before the earliest prior period presented, restating the opening balances of assets, liabilities and equity for the earliest prior period presented. ASPE 1506.37 - Disclosures - Ans...

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11 pages

Written in 2026/2027

Grade A+

COCOSOLUTIONS

Competency Map use for the exam - Answer Learning outcomes by module (Section 6). Within this portion of the Competency Map, there is a separate section for each module: • Common Core Module 1 (C1) - Financial Accounting and Reporting Exam Blueprint - Answer The Exam Blueprint (accessible in the Certification Resource Centre - Resources for CPA Evaluation) outlines the topic coverage on the exam and provides a breakdown between case questions and objective-style testing. In identifyi...

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10 pages

Written in 2026/2027

Grade A+

COCOSOLUTIONS

Assets – Answer resources controlled by an entity, arising from past events, from which economic benefit will flow. Liabilities - Answer present obligations of an Entity, arising from past events, for which an outlay of economic benefit will be needed to settle Equity - Answer the residual interest of an Entity's assets after deducting the liabilities Revenue - Answer the inflow of cash, receivables or other consideration arising from the ordinary activities of an enter...

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13 pages

Written in 2026/2027

Grade A+

COCOSOLUTIONS

Cash-Based Accounting - Answer Sales are recorded when the money is received. Accrual-Based Accounting - Answer Recording sales when the events have incurred Why do you use Accrual-Based Accounting - Answer More expensive but companies that want to be in accordance to IFRS or GAAP must put statements in accrual-based system First-time Adoption - Answer Eg. Company under ASPE wants to switch to IFRS. They must retrospectively state their assets in the prior year in IFRS. H...

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13 pages

Written in 2026/2027

Grade A+

COCOSOLUTIONS

How are Accounting Changes Handles - Answer Change in Estimate > prospectively Change in Accounting Policy > retrospectively or follow transition guidance if new standard Correction of Error > Retrospectively IFRS - IAS 8 ASPE 1506 To be considered as "Held for sale" a non-current asset must meet this criteria - Answer · Must be available for immediate sale in present condition · Terms of sale must be usual and customary · Sale must be highly probable ...

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12 pages

Written in 2026/2027

Grade A+

COCOSOLUTIONS

Difference between IFRS and ASPE for Cash/Receivables - Answer No major differences Restricted Cash - Answer Not able to use cash for general purposes Shown separately and must be disclosed What is the entry for AFDA/ write off of bad debts - Answer AFDA -Bad debt Exp (DR), AFDA (CR) Writeoff- Bad Debt Exp (DR), A/R(CR) What is included in Inventory Cost - Answer Costs to bring inventory to present location and condition. Storage and shipping not included What is includ...

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12 pages

Written in 2026/2027

Grade A+

COCOSOLUTIONS

CAPM Formula - Answer Risk free rate + (Beta*(Market Return-Risk Free Rate)) Which of the following statements regarding portfolio diversification is true? A. Diversification using investments that ideally are perfectly positively correlated allows risk to be minimized while increasing the return of the portfolio. B. Diversification using investments that ideally are perfectly negatively correlated allows risk to be minimized while not significantly reducing the return of the portfolio. ...

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12 pages

Written in 2026/2027

Grade A+

COCOSOLUTIONS

Which of the following statements describes the principle of confidentiality? A. Members must behave in a professional way that maintains the good reputation of the profession. B. Members must be mindful and diligent with information given with respect to the affairs and the business of their employer or client. C. Members must not allow bias or conflict of interest to override their professional judgment. D. Members must maintain their knowledge and skill at a level required by the profes...

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32 pages

Written in 2026/2027

Grade A+

COCOSOLUTIONS

What is a statutory audit? - Answer an audit required by law or governing body what do financial statement audits do to agency cost - Answer increase them why are substantive procedures needed in both substantive and combined audits? - Answer control testing alone doesn’t sufficiently address material misstatement risk what is the best audit approach for a company with few transactions? - Answer substantive if audit, inherent, and control risk are low, and detection ris...

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10 pages

Written in 2026/2027

Grade A+

COCOSOLUTIONS

Prime Costs - Answer prime cost is the total direct costs of production, including raw materials and labor Period Costs - Answer Period costs are any costs a company incurs indirectly related to the production process. This means they're unrelated to the cost of one product or inventory costs for a business. Conversion Costs - Answer Conversion costs are the total of direct labor and factory overhead costs. They are combined because it is the labor and overhead together that co...

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23 pages

Written in 2026/2027

Grade A+

COCOSOLUTIONS

What budgets does the master budget include? and what do they comprise of? - Answer Master budget - comprehensive financial plan Sales budget - starting point (units of sales and dollars of sales) Operating budget -inventory purchase budget -production budget (materials, DL, MOH -selling & Admin expense budget (marketing) -capital budget -other (research) What are the cons of starting the budget too early or too late? - Answer too early - lack current info to produce accurate...

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28 pages

Written in 2026/2027

Grade A+

COCOSOLUTIONS

Assurance Engagement - Answer Auditor aims to obtain sufficient appropriate evidence in order to express a conclusion designed to enhance the degree of confidence of intended users Types of assurance engagements - Answer 1. audit - auditor expresses an opinion 2. review - negative assurance, nothing has come the auditor's attention to indicate there's an issue 3. compilation Levels of Assurance - Answer 1. Reasonable assurance: audits 2. Limited assurance: review 3. No...

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12 pages

Written in 2026/2027

Grade A+

COCOSOLUTIONS

4 Criteria for Finance Lease - Answer TT - Title Transfer BPO - Bargain purchase option 75% - Lease term is more than 75% of its useful life 90% - PV of min lease payment is 90% or more of fair value of assets Income statement structure - Answer ON the TIDE iN OC Operating Income Non-op income Taxes Income for continued ops Discontinued ops Extraordinary items Net income Other comprehensive income Comprehensive Income Components in OCI - Answer DENT Derivative Cash Fl...

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8 pages

Written in 2026/2027

Grade A+

COCOSOLUTIONS