Cost accounting topicsĬost accounting may be the most difficult area of accounting because the language differs from financial accounting, managerial accounting, and other topics. Ultimately, you need to study both fiscal and monetary policy and how each type of policy impacts economic activity. Consequently, these actions force interest rates up and higher interest rates typically slows the economy. As the FED sells bonds, investors exchange money for bonds and the supply of money in the economy declines. The FED manages the supply of money available in the economy and the money supply affects interest rates.Īssume, for example, that the FED reduces the amount of money in the economy by selling government bonds. The US central bank, on the other hand, uses monetary policy to impact the economy via the Federal Reserve System (FED). This policy may include tax cuts, increased government spending, or both. To answer questions on the economic portion of the BEC test, you need to understand how certain entities impact economic activity.įor example, the federal government uses fiscal policy to impact the economy. You’ll definitely see questions on this important economic topic, so get informed! 2.
At the end of this phase, the economy may start to “overheat”, which means that growth and inflation are both growing at a relatively fast rate. Expansion : GDP grows during the expansion phase.Trough : The economy “hits bottom” in this phase, then the economy moves into an expansion phase.Toward the end of this phase, unemployment will start to increase because fewer jobs are needed. Typically, GDP growth may slow to a growth rate of zero or even negative growth. Contraction : The economy is shrinking in this phase.Peak : After a period of economic expansion, the economy reaches a peak of economic activity and then transitions into a contraction.While the length of time of each cycle can vary, the phases do occur in a predictable order: Additionally, you must know the phases in the correct order. Your BEC test will ask you to identify each of the four phases of the cycle. Essentially, the cycle is determined using gross domestic product (GDP), which measures total US economic output.
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As a financial management professional or business owner, you need to understand the phases of the business cycle and how they impact the economy. The business cycle is one economic topic that is on every BEC test. Consequently, these concepts can be challenging, if you haven’t taken an economic course recently or have limited experience with financial statements. The BEC test includes questions on economic topics. Use these tips to successfully answer questions on these topics: 1. Here are four topics that you’ll see on every BEC test. Essentially, your approach should include an outline and a clear thought pattern that the reader can follow. To succeed on the BEC written communication tasks, use general best practices for writing any informative piece. Your response should provide the correct information in writing that is clear, complete and professional.” The instructions state what form the document should take (such as a memo or letter) and its focus. For each of three written communication tasks, you must read a scenario and then write an appropriate document relating to the scenario. The AICPA also points out that “Written communication tasks appear only in the BEC section of the CPA Exam. While the BEC test does not include research-oriented questions, it does include written communication tasks.
You will receive at least one research question (research-oriented TBS) in the AUD, FAR and REG sections.” These testlets feature multiple-choice questions (MCQs) and task-based simulations (TBSs). Essentially, candidates have four hours to take each CPA exam section, including BEC.Īs the AICPA explains: “ Each of the four Exam sections is broken down into five smaller sections called testlets.
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