Core SectionCPA Exam 2026
FAR Exam Guide
Financial Accounting and Reporting
43%
Pass Rate
120-150
Study Hours
50
MCQs (50%)
7
TBSs (50%)
Tests knowledge and skills related to financial accounting and reporting frameworks, including FASB, U.S. SEC, and AICPA standards for both for-profit and non-profit entities.
Pass Rate Insight: Lowest pass rate among all sections. Requires deep understanding of financial statement impacts.
Exam Format & Time Management
Exam Structure
Duration4 hours
Multiple Choice Questions50 (50% weight)
Task-Based Simulations7 (50% weight)
Optional Break15 minutes (after testlet 3)
Recommended Pacing
Time per MCQ~2.4 minutes
Time per TBS~17 minutes
MCQ Testlets2 testlets × 25 questions
TBS Testlets3 testlets (varies by section)
Testlet Progression
Testlet 1: MCQs→Testlet 2: MCQs→Break (Optional)→Testlets 3-5: TBSs
Content Blueprint
| Area | Content | Weighting |
|---|---|---|
| I | Financial Reporting | 30-40% |
| II | Select Balance Sheet Accounts | 30-40% |
| III | Select Transactions | 25-35% |
Key Topics Tested
- General purpose financial statements for various entity types
- Cash, receivables, inventory, property/plant/equipment
- Investments, intangibles, liabilities, and equity
- Revenue recognition and income taxes
- Fair value measurement and leases
- Business combinations and consolidated statements
- Government and nonprofit accounting
- Accounting changes and contingencies
Study Tips for FAR
- 1Focus on understanding how transactions impact financial statements — you cannot memorize your way through FAR
- 2Allocate more time to complex topics like pensions, leases, and consolidations
- 3Master governmental and nonprofit accounting — often overlooked in college coursework
- 4Time management: ~2.08 minutes per MCQ, ~18 minutes per TBS
- 5Use practice exams to build stamina for the 4-hour test
Best Courses for FAR
Top-rated CPA review courses for mastering Financial Accounting and Reporting
FAR Frequently Asked Questions
FAR has the lowest pass rate (43%) but "hardest" depends on your background. If you have a strong accounting foundation, FAR may feel manageable. The volume of content and conceptual depth make it challenging for most candidates.
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