Financial Accounting

Understanding the Accounting Flexible Core Requirement

The role of accounting is the accumulation, analysis, and presentation of relevant financial data of an enterprise to serve the needs of decision makers. The provision of multiple purpose information to serve the needs of interested parties outside a firm’s management is referred to as financial accounting. The provision of information for internal decision making is referred to as managerial accounting. The objective of the core requirement in accounting is to teach the basic concepts, standards, and practices of financial reporting, leading to the ability to read and understand published financial statements and depending on the course chosen, provide some of the rudiments of managerial accounting.

 

Three Basic Options for Fulfilling the Accounting Requirement

1. Waive accounting altogether, either by credential or exam.

2. Place into Accelerated Financial Accounting (ACCT 612) either by credential or exam. Students in ACCT 612 are presumed to understand the following concepts:

  •  the recording of economic transactions in the accounting records (i.e., bookkeeping);
  •  the basic financial statements which summarize a firm’s economic transactions (the balance sheet, the income statement and the statement of cash flows);
  • the fundamental concepts needed to prepare and understand published financial statements (e.g., use of accrual accounting);
  • how to construct the basic financial statements from transactions information and how to recreate the transactions by looking at the financial statements;
  • how to use the indirect method to construct the cash flow statement from balance sheet, cash receipt, and supplemental information; and
  • how to use accounting statements and disclosures to reconstruct the underlying economic events in which the firm participated.

3. Take one of the full semester courses (ACCT 611: Financial Accounting or ACCT 613: Financial and Managerial Accounting).

A common misinterpretation of the waiver by credential criteria is that students must know accounting at the CPA level in order to waive the accounting core requirement. In fact, many students who do not meet the above criteria may be well qualified to waive the core requirement, or at least to place into ACCT 612. However, because it is difficult to objectively measure preparation from transcript materials, the department relies on waiver and placement exams when a student’s credentials do not unambiguously meet the criteria. NOTE: If you place into ACCT 612, you must enroll in this course in your first semester.

Waiver and Placement Process

Waiver By Credentials

Waiving the Accounting Core Requirement By Credentials

Waiver of the accounting core requirement without taking the waiver exam is only granted on the basis of credentials where there is no question about a student’s background. Waiving of the accounting core requirement without the exam is allowed only for the following persons:

Individuals holding one of two professional certifications in accounting: certified public accountant (CPA) or chartered accountant (CA) AND who have practiced as an auditor within the prior five years.

Placing into ACCT 612 by Credential

Placement into ACCT 612 without taking the placement exam is only granted on the basis of credentials where there is no question about a student’s background. Placement into ACCT 612 without the exam is allowed only for (1) individuals who, within the last five years, have taken introductory AND intermediate financial accounting (note that intermediate accounting is not managerial accounting, but is an advanced financial accounting course) with a grade of B or better in both courses within the last five years or (2) Wharton undergraduates who, within the last five years, received a grade of B or better in Accounting 101. Students placing into ACCT 612 by credential are not required to take ACCT 604, which takes place before Pre-Term, but it is recommended for those who feel they need a refresher given that the instructor will presume that students know the basic accounting concepts discussed above prior to the beginning of the course. NOTE: If you place into ACCT 612, you must enroll in this course in your first semester.

Documenting Your Credentials

Students interested in either placing into ACCT 612 by credential or waiving the accounting core requirement by credential must complete the Waiver Evaluation Module indicating that s/he satisfies the criteria to waive or place by credential.

Work Credentials: Persons holding professional certification (CPA or CA) have to submit a copy of their certification and submit a resume or a copy of their application which includes their recent work history.

Academic Credentials: You must highlight/annotate the courses to be considered for waiver by credential on your uploaded transcript, as well as provide supporting documentation (syllabi, textbook information, etc.) for your request to be considered. Failure to do so will result in your request being declined.

Waiver By Exam

About the Exams

Placement Exam –  Students with some prior coursework in accounting are encouraged to sit for the placement exam. ACCT 604 is offered beforehand as a refresher of basic financial accounting concepts in preparation for the exam. NOTE: If you place into ACCT 612, you must enroll in this course in your first semester.

Waiver Exam –  Students with extensive work experience or prior coursework in accounting are encouraged to take the full waiver exam. ACCT 608 is offered beforehand as a refresher of graduate-level financial concepts in preparation for the exam. If a student sits for the waiver exam, but does not pass it, it is still possible to be placed in ACCT 612 with a sufficiently high score.

The Waiver and Placement Exam selects from financial accounting topics covered throughout ACCT 611/612/613. The exams will be “closed book,”“closed notes,” and similar in form and content to past ACCT 611/613 and ACCT 612 exams. Copies of past ACCT exams are included in the Waiver Exam Guide.

Exam Preparation

The following optional prep courses are offered online prior to Pre-Term and will help you prepare for the waiver and placement exam, as well as the fall semester. Courses are slated to open in mid-July.

ACCT 604: Financial Accounting - Placement Prep Course

Upon completion of this course, the student should be prepared to take the placement exam. This is not a class for individuals who have no prior exposure to financial accounting. Rather, it is a class for students with prior training in financial accounting, but who have been unable to place by credentials into the half semester financial accounting course, ACCT 612. Students who have placed into ACCT 612 by credentials who feel a need of a refresher can also take ACCT 604 as knowledge of all material covered in this course will be presumed in ACCT 612. ACCT 604 will briefly review the concepts underlying preparation of the balance sheet and the income statement. The course will also emphasize the preparation of the statement of cash flows as well as the interpretation of these statements using actual annual reports, and the reconstruction of the underlying economic events that affected these annual reports. It is presumed that the student taking this course has previously studied all of this material or had significant exposure to financial statements.

ACCT 608: Financial Accounting – Waiver Prep Course

Upon completion of this review course, the student should be prepared to take the waiver exam. It is designed for students who have had substantial prior exposure to financial accounting but were not able to waive by credentials. It is presumed that the student enrolled in ACCT 608 has previously studied all of the financial accounting topics covered in ACCT 611/612/613. See the syllabi for these courses for more details, but these topics include provisions for uncollectible accounts, LIFO-FIFO inventories, leases, and deferred income taxes. The course will review these topics and more, emphasizing their implications for analyzing and interpreting financial statements.