The content outline for the AAT Test appears below.  If you do not feel comfortable with your basic financial and/or managerial accounting knowlege, you might consider purchasing and reading through one or both of the following study guides:

Financial Accounting

 Managerial Accounting 


Content Outline:

I. Financial Accounting

A. Basic Financial Statements

1. Income Statement and Retained Earnings/Stockholder’s Equity

a. Revenues

b. Expenses

c. Net income

d. Prior period adjustments

e. Multi-Step Income Statement for merchandise

2. Balance Sheet

a. Assets

- Current, Property, Plant & Equipment LT investments, intangibles

b. Liabilities

- Current

- Long term

c. Owners’ Equity/Stockholders Equity

- Corporation

- Other legal forms – Partnership, LLC, non-profit, sole proprietorship

3. Statement of Cash Flows

4. Interim Financial Statements

B. Underlying Assumptions and Principles

1. Realization

2. Conservatism

3. Going Concern

4. Monetary Unit

5. Cost Principle

6. Entity

7. Time period

8. Consistency

9. Full disclosure

C. Income Determination

1. Cash versus accrual basis

2. Revenue recognition principle

a. At the point of sale/when earned

3. Expense recognition

             a. Matching Principle

D. Processing Accounting Information

1. The Accounting cycle (including adjusting entries)

2. Journals and ledgers

3. Fundamental principles of internal control

E. Assets and Equities

1. Assets

a. Cash

(1) Nature and composition

(2) Petty Cash

(3) Bank reconciliations

b. Short-term investments ( including valuation at lower of cost or market)

c. Receivables

(1) Allowance for uncollectable accounts

(2) Notes receivable

d. Prepaid expenses

e. Inventories

(1) FIFO

(2) LIFO

                              (3) Average cost

(4) Lower of cost or market

(5) Inventory systems



f. Property, Plant and Equipment; Natural Resources

(1) Acquisition cost

(2) Costs subsequent to acquisition

(3) Depreciation

--Straight line

--Double declining balance

--Units of activity

g. Intangible Assets

(1) Valuation

(2) Amortization

2. Liabilities

a. Current liabilities

b. Bonds payable (including amortization of premium and discount)

c. Notes payable

d. Contingencies

e. Installment loans

3. Owners’ Equity/Stockholders Equity

a. Corporations

(1) Common stock and stock splits

(2) Other contributed capital

(3) Retained earnings

(4) Treasury stock

(5) Dividends

                                  --Declaration date

                                  --Date of record

                                  --Payment Date

    --Cash Dividends

   --Stock Dividends

b. Partnerships and proprietorships

F. Analysis of Financial Statements

1. Profitability Measures (e.g., EPS and ROI)

2. Liquidity Measures (e.g., current ratio)

3. Solvency Measures (e.g., debt-equity ratio)

II. Managerial Accounting

A. Cost Terminology and Concepts

1. Variable vs. Fixed Cost

2. Unit vs. Total Cost

3. Direct vs. Indirect Costs

4. Product vs. Period Costs

5. Variable vs. Absorption Costing

6. Controllable vs. Non-controllable

7. Production costs

a. Direct Material

b. Direct Labor

c. Factory overhead

8. Sunk costs

9. Inventory

                         a. Materials

                         b. Work in process

                         c. Finished goods

10. Contribution approach

11. Opportunity costs

12. Relevant costs

13. Costs of Goods Manufactured

B. Centralization vs. Decentralization

1. Responsibility accounting

2. Cost Centers

3. Profit Centers

4. Investment Centers

5. Segment Reporting

6. Internal Service Departments

C. Allocation of Factory Overhead

1. Bases

2. Applying to work in process

D. Capital Budgeting

1. Analysis Techniques

a. Payback period

b. Accounting rate of return

c. Discounted cash flows

(1) Net present value

(2) Internal rate of return

E. Analytical Tools

1. Cost/Volume/Profit

a. Assumptions

b. Graphic solution

(1) Break-even graphs

(2) Profit volume chart

c. Formulas (e.g. ROI)

F. Job Order Cost

1. Characteristics

2. Cost Flow

G. Process Costs

1. Characteristics

2. Cost Flow

H. Standard Costs and Analysis of Variances

1. Standard Setting

a. Capacity levels

(1) Ideal

(2) Attainable

2. Types and Analysis of Variances

a. Material

b. Labor

c. Overhead

(1) Variable

(2) Fixed

3. Disposition of Variances




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