CPA Core 1 — Financial Accounting and Reporting Quick Review

Last revised: June 25, 2026

Independent Quick Review for CPA Canada CPA Core 1 financial accounting and reporting preparation, with high-yield decision rules and common traps.

CPA Core 1 Quick Review

This independent quick review is for candidates preparing for CPA Canada CPA Canada PEP Core 1 - Financial Accounting and Reporting (CPA Core 1). Use it to refresh high-yield financial reporting concepts before moving into topic drills, mock exams, and detailed explanations from an independent question bank.

The Core 1 mindset is not “recite the standard.” It is:

Identify the financial reporting issue.
Determine the applicable reporting framework.
Apply the criteria to case facts.
Quantify the impact where possible.
Conclude with the required accounting treatment, disclosure, or both.
Tie the recommendation back to users, materiality, covenants, bonus plans, financing needs, or other case objectives.

For real exam preparation, always use your current CPA Canada module materials and the applicable CPA Canada Handbook guidance as your authority. This page is independent review support, not an official CPA Canada publication.

Fast Case-Response Framework

Use a repeatable structure for each issue. Candidates often lose marks because they know the standard but do not organize the answer.

Step	What to Do	Common Mistake
1. State the issue	“The issue is whether revenue should be recognized before year-end.”	Writing a generic paragraph with no case-specific issue.
2. Identify framework	IFRS, ASPE, ASNPO, or other basis if provided.	Applying IFRS logic when the case says ASPE, or ignoring a policy choice.
3. Give criteria	Summarize the relevant recognition/measurement criteria.	Copying a checklist without analysis.
4. Apply facts	Match each key fact to the criteria.	Saying “criteria met” without explaining why.
5. Quantify	Calculate adjustment, carrying value, profit impact, ratio impact, or disclosure amount.	Discussing an issue qualitatively when numbers are available.
6. Conclude	Recognize, derecognize, capitalize, expense, disclose, reclassify, or no adjustment.	Ending with “management should consider.”
7. Communicate impact	Link to users, covenants, bonuses, taxes, financing, or valuation.	Ignoring why the issue matters in the case.

Strong Mini-Template

For most financial reporting issues, use this template:

Issue: What accounting treatment is in question?
Criteria: What must be true under the relevant framework?
Analysis: Which facts support or fail the criteria?
Quantification: What is the dollar impact?
Conclusion: What entry, adjustment, presentation, or disclosure is required?
User impact: How does this affect decisions, ratios, covenants, financing, or management compensation?

Reporting Framework Decision Points

Core 1 financial reporting cases commonly require you to distinguish between frameworks and not over-apply one set of rules to another.

Area	IFRS Emphasis	ASPE Emphasis	Candidate Trap
Users	Often broader external capital-market focus.	Often owner-manager, lender, private company focus.	Ignoring the actual users described in the case.
Revenue	Five-step control model under IFRS 15.	Criteria-based approach under ASPE, with different language and policy context.	Forcing IFRS 15 terminology into an ASPE case without adapting.
Leases	Lessees generally recognize right-of-use asset and lease liability, subject to exemptions.	Lessee classification as capital or operating lease.	Treating all ASPE leases like IFRS leases.
PPE	Cost model or revaluation model if elected.	Generally cost-based.	Revaluing assets in ASPE without support.
Development costs	Capitalize only when criteria are met.	Policy choices may matter; apply the case’s policy and criteria.	Capitalizing research or early-stage uncertainty.
Impairment	Recoverable amount model; reversals may be possible except for goodwill.	Different recoverability and measurement approach; reversals are more limited.	Using one impairment model for both frameworks.
Income taxes	Deferred tax approach.	Taxes payable or future income taxes method may be a policy choice.	Creating deferred taxes when the entity uses taxes payable method.
Financial instruments	Classification and measurement can be complex.	Often simpler, with important fair value and amortized cost distinctions.	Ignoring transaction costs and impairment.
Subsidiaries/investments	Consolidation, equity method, or financial instrument treatment depends on control/influence.	Policy choices may be available for certain investments.	Not first deciding whether control or significant influence exists.

High-Yield Financial Reporting Issue Map

Topic	Key Decision	Typical Case Evidence	Common Trap
Revenue	Has performance occurred, and how much should be recognized?	Deposits, delivery terms, installation, returns, warranties, bundles.	Recognizing cash receipts as revenue automatically.
Inventory	Is inventory measured at the lower of cost and NRV?	Obsolete goods, selling price declines, storage costs, freight, consignment.	Including selling costs or abnormal waste in inventory cost.
PPE	Capitalize or expense? Depreciate? Impair?	Repairs, upgrades, installation, idle assets, component parts.	Capitalizing training, advertising, or routine maintenance.
Intangibles/R&D	Does the asset meet recognition criteria?	Research stage, development stage, patents, internally generated brands.	Capitalizing uncertain research costs.
Leases	Lease or service? Finance/capital or operating? ROU liability?	Term, renewal options, ownership transfer, embedded assets, payments.	Missing embedded leases in service contracts.
Impairment	Is carrying value recoverable?	Losses, market decline, damaged asset, underperformance.	Waiting for a sale before recognizing impairment.
Provisions	Present obligation? Probable/likely? Measurable?	Lawsuits, warranties, guarantees, restructuring plans.	Accruing for vague intentions rather than obligations.
Financial instruments	Classification, measurement, impairment, presentation.	Loans, receivables, investments, derivatives, covenants.	Ignoring collectability of receivables.
Investments	Control, significant influence, or passive investment?	Ownership %, board seats, veto rights, management influence.	Using ownership percentage alone.
Income taxes	Current vs deferred/future tax effect.	Temporary differences, losses, tax reassessment, policy choice.	Tax-effecting every accounting adjustment mechanically.
Subsequent events	Adjusting or non-adjusting?	Settlement after year-end, bankruptcy, fire, sale of inventory.	Using hindsight for events that arose after year-end.
Related parties	Recognition, measurement, and disclosure.	Owner loans, family entities, non-market terms.	Treating related-party terms as arm’s length.
Going concern	Is there material uncertainty?	Covenant breaches, losses, refinancing failure, liquidity pressure.	Only discussing disclosure, not classification and measurement impacts.
Accounting changes	Policy, estimate, or error?	Depreciation change, inventory method change, prior error.	Retrospective treatment for an estimate change.

Revenue Recognition Quick Review

Revenue is one of the highest-yield Core 1 areas because it combines criteria, judgment, quantitative adjustment, and user impact.

IFRS Revenue Model

For IFRS cases, organize revenue using the five-step model:

Step	Review Question	Watch For
1. Identify contract	Is there an approved arrangement with enforceable rights and obligations?	Side agreements, cancellation clauses, collectability concerns.
2. Identify performance obligations	Are there distinct goods or services?	Bundled products, installation, maintenance, loyalty points, warranties.
3. Determine transaction price	What consideration is expected?	Discounts, rebates, refunds, variable consideration, financing component.
4. Allocate price	Allocate based on relative stand-alone selling prices.	Free items are often not “free” for accounting purposes.
5. Recognize revenue	Recognize when or as control transfers.	Shipment terms, customer acceptance, milestones, bill-and-hold.

ASPE Revenue Reminders

For ASPE cases, use the framework and terminology expected under ASPE rather than automatically defaulting to IFRS 15. Focus on whether:

Performance has been achieved.
The amount is measurable.
Collection is reasonably assured.
Risks and rewards or service performance have transferred, depending on the transaction.
The method chosen is consistent with the entity’s accounting policy and the facts.

Revenue Traps

Situation	Likely Accounting Focus
Customer pays a deposit	Liability until revenue criteria are met.
Product shipped but customer acceptance is substantive	Delay revenue until acceptance if acceptance affects transfer/performance.
Installation is significant	May be separate obligation or may delay recognition.
Warranty included	Distinguish assurance warranty from service-type warranty.
Right of return	Estimate returns and refund liability/asset if framework requires.
Consignment	Revenue generally not recognized by consignor until sale to end customer.
Bill-and-hold	Requires strong evidence that control transferred and customer requested arrangement.
Loyalty points	Allocate part of consideration to future benefit if material.
Principal vs agent	Gross revenue if principal; net commission if agent.
Long-term service contract	Consider percentage/progress recognition if performance occurs over time and can be measured.

Inventory

Inventory issues are often quick marks if you remember what belongs in cost and when to write down inventory.

Question	Quick Rule
What costs are included?	Purchase price, import duties, freight-in, conversion costs, and directly attributable costs to bring inventory to location and condition for sale.
What costs are excluded?	Selling costs, abnormal waste, most storage unrelated to production, administrative overhead not directly attributable, advertising.
Measurement?	Lower of cost and net realizable value.
Cost flow?	FIFO or weighted average are common; do not use LIFO unless the applicable framework permits it.
Obsolete or damaged goods?	Write down to NRV when NRV is below cost.
NRV recovers later?	Consider reversal if the applicable inventory standard permits or requires it.
Consigned goods?	Inventory remains with consignor until sold by consignee.

Inventory Candidate Mistakes

Treating purchase commitments as inventory before control/title passes.
Forgetting freight-in is different from freight-out.
Ignoring obsolete inventory when gross margin looks overstated.
Recording inventory based on physical possession when goods are consigned.
Not adjusting cost of sales when inventory is written down.

PPE, Betterments, and Depreciation

Capitalize vs Expense

Capitalize costs when they create or enhance a future economic benefit and are directly attributable to getting the asset ready for intended use.

Cost Type	Usual Treatment
Purchase price	Capitalize.
Delivery and installation	Capitalize if directly attributable.
Site preparation	Capitalize if necessary for intended use.
Testing before ready for use	Often capitalize if directly attributable, subject to framework specifics.
Training staff	Usually expense.
Advertising launch	Expense.
Routine maintenance	Expense.
Major replacement or betterment	Capitalize if it enhances service potential or extends useful life; derecognize replaced component if applicable.
Repairs after damage	Usually expense unless they improve the asset beyond original condition.

Depreciation Reminders

Depreciation begins when the asset is available for use, not necessarily when revenue starts.
Useful life, residual value, and depreciation method should reflect expected consumption of benefits.
Componentization may be required or appropriate when parts have materially different useful lives.
A change in useful life or residual value is usually an accounting estimate change and is treated prospectively.
Idle assets are generally still depreciated unless classified differently under the applicable framework.

PPE Traps

Capitalizing costs after the asset is ready for use without a betterment.
Forgetting to remove the carrying value of a replaced part.
Ignoring impairment indicators after operational underperformance.
Using tax depreciation instead of accounting depreciation.
Treating all repairs as capital because they are large.

Intangibles, Research, and Development

Intangibles require careful separation of research, development, purchased assets, and internally generated items.

Item	Typical Treatment
Purchased patent or licence	Capitalize if identifiable, controlled, and measurable.
Internally generated brand or customer list	Usually expense; recognition criteria are difficult to meet.
Research phase	Expense.
Development phase	Capitalize only if the applicable criteria are met.
Website or software development	Analyze stage, control, future benefit, and direct costs.
Legal defense of an existing patent	Consider whether it maintains or enhances future benefits.
Training and promotional launch	Expense.

Development Cost Criteria — What to Look For

A development asset generally needs evidence of:

Technical feasibility.
Intention to complete and use or sell.
Ability to use or sell.
Probable future economic benefits.
Adequate technical, financial, and other resources.
Reliable measurement of costs.

Candidate trap: if the product is still uncertain, experimental, or market demand is unproven, capitalization is risky.

Impairment

Impairment is a common “hidden” issue when the case describes losses, market changes, damaged assets, idle capacity, or poor performance.

Step	IFRS-Oriented Thinking	ASPE-Oriented Thinking
Identify indicator	Internal or external indicators; some assets require periodic testing.	Events or changes in circumstances may indicate non-recoverability.
Determine level	Asset or cash-generating unit.	Asset or asset group, depending on recoverability.
Test	Compare carrying value with recoverable amount.	Recoverability and measurement follow ASPE-specific model.
Measure loss	Carrying amount above recoverable amount.	Write down based on applicable ASPE measurement.
Reversal	Some reversals permitted, but not goodwill.	Reversals are more restricted; know the asset type.

Common Impairment Indicators

Recurring operating losses.
Major customer loss.
Physical damage.
Technological obsolescence.
Significant decline in market value.
Regulatory or economic changes.
Asset idle or plans to dispose.
Cash flows worse than budget.

Impairment Traps

Ignoring impairment because management expects a future turnaround without support.
Testing impairment after recording a sale instead of at year-end.
Using undiscounted and discounted cash flows interchangeably without framework support.
Forgetting to update depreciation after an impairment loss.
Treating inventory impairment like PPE impairment.

Leases

The first decision is whether the arrangement contains a lease. Look for control over an identified asset.

Question	Why It Matters
Is there an identified asset?	A lease requires a specified or implicitly specified asset.
Can the supplier substitute the asset?	A substantive substitution right may mean no identified asset.
Does the customer control use?	Customer must direct use and obtain economic benefits.
Are there non-lease components?	Service components may need separate accounting.
Are renewal options reasonably certain?	Affects lease term and measurement.
Is there a purchase option or ownership transfer?	Affects classification/measurement.

IFRS Lessee Reminder

Under IFRS, lessees generally recognize:

Right-of-use asset.
Lease liability.
Depreciation of the right-of-use asset.
Interest on the lease liability.

Remember exemptions may apply, but do not assume them unless the facts support them.

ASPE Lessee Reminder

Under ASPE, determine whether the lease is capital or operating by assessing whether substantially all benefits and risks of ownership transfer to the lessee.

Common indicators include:

Transfer of ownership.
Bargain purchase option.
Lease term covering a major part of economic life.
Present value of minimum lease payments representing substantially all fair value.
Specialized asset with limited alternative use.

Lease Traps

Ignoring embedded leases in service contracts.
Using the wrong discount rate.
Forgetting lease incentives.
Treating refundable deposits as expense.
Missing restoration or asset retirement obligations.
Failing to separate lease and non-lease components when material.

Financial Instruments

Financial instruments appear through receivables, loans, investments, convertible debt, derivatives, guarantees, and covenant issues.

Area	Review Focus
Initial recognition	Usually at fair value, with transaction cost treatment depending on classification.
Subsequent measurement	Amortized cost, fair value through profit or loss, or other category depending on framework.
Transaction costs	Expense for fair value categories; include in carrying amount for amortized cost categories when required.
Receivables	Assess collectability and impairment.
Debt	Consider current vs non-current classification, covenants, refinancing, modification.
Equity investments	Determine fair value availability and classification.
Compound instruments	Separate liability and equity components if required.
Derivatives	Often fair value; do not ignore just because no cash changed hands at inception.

Financial Instrument Traps

Recording a loan at face value when it was issued off-market or with related-party terms.
Forgetting to accrue interest using the effective interest method where applicable.
Ignoring expected or incurred credit losses on receivables, depending on framework.
Treating all investments as long-term strategic investments without assessing intent and control.
Missing debt covenant breaches that affect classification and disclosure.

Investments, Control, and Business Combinations

Before choosing the accounting method, decide what the investor has.

Relationship	Indicators	Typical Accounting Direction
Passive investment	No significant influence or control.	Financial instrument accounting.
Significant influence	Board representation, policy participation, material transactions, interchange of management, ownership evidence.	Equity method or policy choice depending on framework.
Joint control	Contractual sharing of control.	Joint arrangement guidance or applicable ASPE treatment.
Control	Power over relevant activities, exposure to returns, ability to affect returns.	Consolidation, unless framework-specific exception or policy choice applies.

Business Combination Basics

Use acquisition method logic:

Identify the acquirer.
Determine acquisition date.
Measure consideration transferred.
Recognize identifiable assets acquired and liabilities assumed, generally at fair value.
Recognize goodwill or gain on bargain purchase if applicable.
Expense acquisition-related costs unless the framework requires otherwise for specific issuance costs.

Goodwill formula:

Goodwill = consideration transferred + non-controlling interest + fair value of previously held interest - fair value of identifiable net assets acquired

Consolidation Adjustments to Remember

Eliminate parent’s investment in subsidiary against subsidiary equity.
Recognize fair value adjustments from acquisition.
Eliminate intercompany receivables and payables.
Eliminate intercompany sales and purchases.
Remove unrealized profit in ending inventory.
Remove unrealized gains on intercompany PPE transfers and adjust depreciation.
Eliminate intercompany dividends.
Allocate profit and net assets to non-controlling interest if applicable.

Investment Traps

Assuming ownership percentage alone determines control.
Missing potential voting rights or contractual rights.
Failing to distinguish asset acquisition from business combination.
Forgetting tax effects of fair value adjustments if required.
Not eliminating intercompany profit in ending inventory.

Provisions, Contingencies, Warranties, and Guarantees

The core question: should the entity recognize, disclose, or do nothing?

Situation	Likely Response
Present obligation from past event, outflow probable/likely, amount estimable	Recognize provision/liability.
Possible obligation or not reliably measurable	Disclose if material, depending on likelihood.
Remote likelihood	Usually no recognition and often no disclosure.
Contingent asset	Do not recognize until realization is sufficiently certain under the framework.
Warranty obligation	Recognize estimated warranty cost when related revenue is recognized if obligation exists.
Lawsuit	Assess legal advice, probability, estimate, and subsequent settlement evidence.
Restructuring	Need more than a general plan; look for obligation and valid expectation.

Provision Traps

Accruing for future operating losses without a present obligation.
Treating management intent as an obligation.
Ignoring a range of possible outcomes.
Forgetting to discount if the time value of money is material and required.
Missing disclosure when recognition is not appropriate.

Income Taxes

Income tax issues are often tied to other financial reporting adjustments.

Area	Quick Review
Current tax	Based on taxable income for the period.
Deferred/future tax	Arises from temporary differences between accounting carrying amounts and tax bases.
Permanent differences	Affect effective tax rate but do not reverse.
Tax losses	Consider recognition only if future taxable profit support exists.
ASPE policy choice	Taxes payable method may avoid future income tax recognition if selected.
IFRS	Deferred tax approach is generally required.
Rate	Use enacted or substantively enacted rates when required by the framework.

Common Temporary Differences

Accounting depreciation vs tax depreciation.
Warranty accruals deductible when paid.
Unearned revenue taxed when received.
Impairment losses not immediately deductible.
Capitalized development costs with different tax treatment.
Fair value adjustments in business combinations.

Income Tax Traps

Applying deferred tax when the company uses taxes payable method under ASPE.
Treating permanent differences as deferred tax items.
Ignoring valuation support for deferred tax assets.
Forgetting tax effects of accounting adjustments when the case asks for net income impact.
Assuming the tax return treatment determines financial statement treatment.

Accounting Policies, Estimates, Errors, and Subsequent Events

Issue	Treatment	Example
Change in accounting policy	Usually retrospective unless impracticable or specific guidance applies.	Changing inventory cost formula.
Change in accounting estimate	Prospective.	Revising useful life or bad debt estimate.
Prior-period error	Correct retrospectively if material.	Inventory count error from last year.
Adjusting subsequent event	Adjust if it provides evidence of conditions existing at year-end.	Customer bankruptcy after year-end confirming receivable impairment.
Non-adjusting subsequent event	Disclose if material but do not adjust if condition arose after year-end.	Fire after year-end destroying facility.

Subsequent Event Decision Rule

Ask: Did the underlying condition exist at the reporting date?

Yes: likely adjusting.
No: likely non-adjusting disclosure if material.
Unclear: use case evidence and explain judgment.

Common Traps

Treating every later event as an adjusting event.
Ignoring subsequent settlement of a lawsuit that confirms year-end obligation.
Adjusting for a new event that arose after year-end.
Calling an error an estimate change to avoid restatement.
Applying retrospective treatment to depreciation useful-life changes.

Related-party issues matter because transactions may not reflect market terms.

Review Area	What to Consider
Identification	Owners, family members, controlled entities, key management, related companies.
Measurement	Determine whether exchange amount or carrying amount is appropriate under the applicable framework.
Substance	Assess whether the transaction is genuine, commercial, and properly authorized.
Disclosure	Nature of relationship, transaction amounts, balances, terms, and measurement basis.
Financial statement impact	Loans, rent, management fees, asset transfers, guarantees, forgiveness of debt.

Assuming stated price equals fair value.
Missing below-market loans to shareholders or related companies.
Ignoring disclosure because the transaction was recorded.
Treating owner withdrawals as expenses.
Not considering classification between receivable, loan, dividend, salary, or distribution.

Going Concern, Classification, and Disclosure

Going concern is not just a note. It can affect classification, measurement, and user interpretation.

Indicator	Possible Reporting Impact
Recurring losses	Going concern disclosure, impairment review, covenant concerns.
Negative cash flows	Liquidity disclosure and classification issues.
Loan covenant breach	Debt may become current unless waiver/refinancing facts support otherwise.
Loss of major customer	Impairment, revenue forecast, going concern uncertainty.
Refinancing uncertainty	Disclosure and current/non-current classification.
Plans to liquidate	Different basis of accounting may be required if going concern inappropriate.

Classification Traps

Leaving debt as long-term after a year-end covenant breach without support.
Ignoring waivers, refinancing terms, or lender rights.
Classifying restricted cash as ordinary cash without analysis.
Overlooking current portion of long-term debt.
Treating preferred shares as equity without assessing substance.

Statement of Cash Flows

Cash flow questions often test classification and non-cash adjustments.

Item	Common Classification Focus
Cash received from customers	Operating.
Cash paid to suppliers/employees	Operating.
Purchase of PPE	Investing.
Proceeds from sale of equipment	Investing.
Borrowing proceeds	Financing.
Principal repayment of debt	Financing.
Dividends paid	Follow framework and policy.
Interest paid/received	Follow framework and policy.
Non-cash acquisition	Disclose separately; do not include as cash flow.

Indirect Method Reminders

Start with net income, then adjust for:

Non-cash expenses such as depreciation and impairment.
Gains/losses on investing or financing items.
Changes in working capital.
Non-cash revenue or expense accruals.

Cash Flow Traps

Including non-cash lease recognition as a cash outflow.
Treating equipment purchase on credit as investing cash flow.
Forgetting that gains are removed from operating cash flow under indirect method.
Mixing up interest classification without considering framework and policy.
Ignoring restricted cash disclosure.

Ratios and Financial Statement Analysis

Core 1 responses often require explaining how an accounting adjustment changes user decisions.

Ratio/Metric	Formula	What It Signals
Current ratio	Current assets / current liabilities	Short-term liquidity.
Quick ratio	Quick assets / current liabilities	Liquidity excluding inventory.
Debt-to-equity	Total debt / equity	Leverage and covenant pressure.
Gross margin	Gross profit / revenue	Pricing, cost control, inventory issues.
Profit margin	Net income / revenue	Overall profitability.
Return on assets	Net income / average assets	Asset productivity.
Inventory turnover	Cost of sales / average inventory	Inventory movement and obsolescence.
Days sales outstanding	Average A/R / credit sales × 365	Collection speed.
Interest coverage	Income before interest and tax / interest expense	Ability to service debt.

Analysis Traps

Calculating ratios correctly but not interpreting them.
Ignoring the impact of proposed adjustments on covenants.
Using year-end balances when average balances are more meaningful and available.
Comparing ratios without considering business changes.
Treating one-time gains as sustainable performance.

Not-for-Profit Reporting Reminders, If Tested in Your Materials

If your Core 1 preparation includes not-for-profit scenarios, focus on restrictions and revenue recognition.

Area	Review Focus
Restricted contributions	Determine deferral method or restricted fund method if applicable.
Endowments	Usually maintained permanently; investment income depends on restrictions.
Contributed materials/services	Recognize only when criteria are met and fair value can be reasonably estimated.
Fund accounting	Track restricted, unrestricted, capital, and endowment resources if used.
Tangible capital assets	Determine capitalization policy, amortization, and contributed asset treatment.
Disclosure	Restrictions, related parties, commitments, and fund balances are often important.

Common trap: recognizing restricted donations as unrestricted revenue when the donor imposed a clear external restriction.

Common Core 1 Candidate Mistakes

Use this list as a final check before moving to practice questions.

No conclusion. Always finish each issue with the required treatment.
No quantification. If numbers are available, calculate the adjustment.
Wrong framework. Do not apply IFRS when the case specifies ASPE.
Generic criteria dump. Criteria must be tied to case facts.
Cash equals revenue error. Cash received may be a deposit, liability, financing, or restricted contribution.
Capitalization bias. Large cost does not automatically mean asset.
Ignoring disclosures. Some issues require disclosure even when no recognition is made.
Missing user impact. Explain why the adjustment matters to lenders, owners, investors, or management.
Weak materiality analysis. Consider both quantitative and qualitative materiality.
Confusing estimate and error. Estimate changes are usually prospective; errors may require restatement.
Over-auditing the case. If the ask is financial reporting, focus on accounting treatment, not audit procedures.
Not prioritizing. Address material, case-relevant issues first.

High-Yield Journal Entry Patterns

You do not always need a journal entry, but entries can clarify your conclusion.

Issue	Entry Pattern
Unearned revenue correction	Dr Revenue; Cr Unearned revenue.
Revenue earned from prior deposit	Dr Unearned revenue; Cr Revenue.
Inventory write-down	Dr Inventory write-down/COGS; Cr Inventory.
Capitalize PPE wrongly expensed	Dr PPE; Cr Expense.
Expense cost wrongly capitalized	Dr Expense; Cr PPE/intangible.
Record depreciation	Dr Depreciation expense; Cr Accumulated depreciation.
Impair asset	Dr Impairment loss; Cr Asset/accumulated impairment.
Recognize provision	Dr Expense; Cr Provision/liability.
Write off bad receivable	Dr Bad debt expense/allowance; Cr Accounts receivable.
Accrue interest	Dr Interest expense; Cr Interest payable.
Reclass current debt	Dr Long-term debt; Cr Current portion of debt, if presentation entry is used.

Candidate trap: entries must reflect the correction needed, not merely the original transaction.

Quick Final Review Checklist

Before you begin topic drills or a mock exam, make sure you can answer these quickly:

Can I identify the reporting framework from the case?
Can I distinguish recognition, measurement, presentation, and disclosure issues?
Can I explain revenue timing for deposits, bundled contracts, returns, warranties, and consignment?
Can I separate capital costs from repairs, training, advertising, and maintenance?
Can I identify impairment indicators and apply the correct framework logic?
Can I distinguish IFRS and ASPE lease treatment?
Can I classify investments based on control, significant influence, or passive ownership?
Can I decide whether a lawsuit or warranty should be accrued or disclosed?
Can I treat subsequent events as adjusting or non-adjusting?
Can I quantify the financial statement impact and explain user consequences?
Can I write a concise conclusion for each issue?

How to Turn This Review Into Practice

Use this Quick Review as a bridge into independent companion practice:

Pick your weakest three areas from the tables above.
Complete targeted topic drills using original practice questions.
Review detailed explanations and compare your reasoning to the model logic.
Add missed issues to an error log: framework, criteria, facts, quantification, conclusion, or disclosure.
Reattempt similar questions until you can identify the issue and conclude quickly.
Finish with timed mixed sets or mock exams to practise prioritization and communication.

Next step: choose one high-yield topic—revenue, leases, impairment, or provisions—and complete a focused question bank drill with detailed explanations before moving to a timed mixed practice set.

Study Plan