foundations of ACCOUNTING

Foundations of Accounting challenges members to demonstrate their understanding of fundamental accounting principles through an objective test. This event introduces key concepts such as the accounting cycle and financial statements, encouraging members to build a strong foundation in the field.

Event Overview

Division: Collegiate
Event Type: Individual
Event Category: Objective Test, 100-multiple choice questions (breakdown of question by competencies below)
Objective Test Time: 50 minutes

Educational Alignment

Items Competitor Must Provide: Sharpened Pencil, Computer, Photo Identification, Attire that meets the FBLA Dress Code

Items FBLA Must Provide: Test login information

This event is intended for students who are early in their collegiate academic journey and just beginning their study of accounting. Only members who have completed no more than six credit hours on a semester schedule (or the equivalent number of quarter hours) of college-level accounting coursework by May 1, 2027, are eligible to compete.

 Competencies

·         Nature of Accounting
·         Standards and Compliance
·         The Accounting Cycle
·         Financial Statements
·         Managerial Accounting
·         Career Opportunities
Test questions are based on the knowledge areas and objectives outlined for this event. Detailed objectives can be found in the study guide included in these guidelines.

State

Eligibility

·         FBLA membership dues are paid by 11:59 pm Eastern Time on February 1st of the current program year.

·         Members must be registered for the SLC and pay the state conference registration fee in order to participate in competitive events.

·         Members must stay within the official FBLA housing block of the official FBLA hotel to be eligible to compete.

·         Each chapter may submit six students in this event.

·         On the state level, each member can compete in up to three different events in the following combinations: three objective tests OR two objective tests and one presentation OR two objective tests and one production or one objective test and two production OR one objective test, one presentation, and one production. Students may enter the Christopher Heider, Rob Kelleher, Who’s Who event, and one Chapter event (Community Service, State of the Chapter) in addition to their above chosen events.

·         Picture identification (physical or digital: driver’s license, passport, state-issued identification, or school-issued identification) matching the conference nametag is required when checking in for competitive events.

·         If competitors are late for an objective test, they may be either disqualified or permitted to begin late with no extension of the time as scheduled. This is up to the discretion of the proctor.

·         Participants must adhere to the Florida FBLA dress code established by the Florida Board of Directors or they will not be permitted to participate in the competitive event.

Recognition

·         The number of competitors will determine the number of winners. The maximum number of winners for each competitive event on the state level is 4.

Event Administration

·         This event is an objective test administered prior to the SLC. Advisers will be sent information regarding testing requirements.

·         No reference or study materials may be brought to the testing site.

·         No calculators may be brought into the testing site; online calculators will be provided through the testing software.

Tie Breaker

·         Ties are broken by comparing the correct number of answers to the last 10 questions on the test. If a tie remains, answers to the last 20 questions on the test will be reviewed to determine the winner. If a tie remains, the competitor who completed the test in a shorter amount of time will place higher.

Americans with Disabilities Act (ADA)

·         FBLA complies with the Americans with Disabilities Act (ADA) by providing reasonable accommodations for competitors. Accommodation requests must be submitted through the conference registration system by the official registration deadline. All requests will be reviewed, and additional documentation may be required to determine eligibility and appropriate support.

Penalty Points

·         Competitors may be disqualified if they violate the Competitive Event Guidelines or the Honor Code.

Electronic Devices

·        Unless a pre-approved accommodation is in place, all cell phones, smart watches, and headphones must be turned off and put away before competition begins. Any visibility of these devices will be considered a violation of the Honor Code.

National

If competing at the National level, be sure to see the National guidelines at https://www.fbla.org/collegiate/competitive-events/


Study Guide: Knowledge Areas and Objectives

This study guide outlines the skills and knowledge assessed for this event. Objectives followed by a two-letter, three-digit code in parentheses are aligned to the National Business Administration Standards from MBA Research and Curriculum Center. Some objectives reference MBA Research’s Learning Activity Packages (LAPs), which are instructional resources with readings, activities, and assessments available exclusively to teacher advisers. For more information, visit MBAResearch.org/FBLA. 

Important Notice Regarding Test Preparation 

MBA Research materials are not required to study for or prepare for FBLA competitive event tests. MBA Research provides curriculum and instructional resources directly to teachers and does not administer or manage individual student testing or competition participation. 

Note for members and parents: All questions related to tests, study materials, scores, or competition guidelines should be directed to the local FBLA adviser. Only teacher advisers should contact MBA Research directly. 

Nature of Accounting (15 test items)  

  1. Describe the need for financial information (FI:579, LAP-FI-579) (CS)  

  2. Explain the concept of accounting (FI:085, LAP-FI-085) (CS)  

  3. Discuss the role of ethics in accounting (FI:351, LAP-FI-351) (SP)   

  4. Explain the use of technology in accounting (FI:352) (SP)  

  5. Explain legal considerations for accounting (FI:353) (SP)  

  Standards and Compliance (15 test items)  

  1. Explain the nature of accounting standards (PD:158) (CS)  

  2. Explain financial disclosure regulations and policies (BL:153) (SP)  

  3. Discuss the roles and responsibilities of accounting-standards-setting bodies (i.e., SEC, FASB, IASB, GASB) (PD:295) (SP)  

  4. Discuss the levels and types of external financial reporting (PD:340) (SP)  

  5. Explain the purpose of internal accounting controls (FI:343, LAP-FI-343) (SP)  

  6. Explain the nature of audits and assurance engagements (FI:344) (SP)  

  The Accounting Cycle (35 test items)  

  1. Discuss the nature of the accounting cycle (FI:342) (CS)  

  2. Distinguish among types of business transactions (FI:673) (CS)  

  3. Distinguish among types of business documentation (FI:674) (CS)  

  4. Demonstrate the effects of transactions on the accounting equation (FI:378) (CS)  

  5. Prepare a chart of accounts (FI:379) (CS)  

  6. Explain the nature of special journals (FI:407) (CS)  

  7. Journalize business transactions (FI:381) (CS)  

  8. Post journal entries to general ledger accounts (FI:382) (CS)  

  9. Prepare a trial balance (FI:383) (CS)  

  10. Journalize and post adjusting entries (FI:384) (CS)  

  11. Journalize and post closing entries (FI:385) (CS)  

  12. Prepare a post-closing trial balance (FI:386) (CS)  

  13. Identify and correct accounting errors (FI:675) (SP)  

  14. Prepare worksheets (FI:387) (SP)  

Financial Statements (20 test items)  

  1. Discuss the nature of annual reports (FI:388) (SP)  

  2. Analyze transactions and accounts (e.g., purchase, sales, sales returns and allowances, uncollectible accounts, depreciation, debt) (FI:449) (SP)  

  3. Prepare cash flow statements (FI:092) (MN)  

  4. Prepare income statements (FI:149) (MN)  

  5. Prepare statements of changes to equity (FI:392) (MN)  

  6. Prepare balance sheets (FI:393) (MN)  

  7. Calculate financial ratios (FI:097) (MN)  

Interpret financial statements (FI:102) (MN)  

Managerial Accounting (5 test items)  

  1. Describe marginal analysis techniques and applications (FI:659) (SP)  

  2. Explain the nature of managerial accounting (FI:660) (SP)  

Discuss the use of variance analysis in managerial accounting (FI:661) (SP)  

Career Opportunities (10 test items)  

  1. Identify career opportunities in accounting (PD:337) (SP)  

2. Explain the roles and responsibilities of accounting professionals (PD:338) (SP)  

3. Discuss professional designations for accountants (e.g., CPA, CMA, CIA, CFE, etc.) (PD:168) (SP)  

4. Describe the services of professional organizations in accounting (PD:339) (SP)