CPA Exam Lab
Section 1: 30–40%1A1

Balance Sheet / Statement of Financial Position

Classification questions dominate this topic — current vs. non-current, operating cycle vs. 12 months, where deferred taxes go. The trap AICPA loves: giving you a note payable due in 13 months and asking if it's current. Spoiler: it's non-current, but only if you haven't violated a covenant. Get the classification rules locked down and you'll pick up easy points.

What AICPA Wants You to Know

  • 1Apply the accounting equation: Assets = Liabilities + Equity
  • 2Classify assets and liabilities as current vs. non-current
  • 3Identify what belongs in each section of the balance sheet
  • 4Apply the one-year rule for current vs. non-current classification
  • 5Understand offsetting rules (when assets and liabilities can be netted)