Accounting IICategory: Objective Test
60-minute test administered during the NLC.
Objective Test Competencies: Financial Statements; Corporate Accounting; Ratios and Analysis; Accounts Receivable and Payable; Budgeting and Cash Flow; Cost Accounting/Manufacturing; Purchases and Sales; Journalizing and Posting; Income Tax; Payroll; Inventory; Plant Assets and Depreciation; Departmentalized Accounting; Ethics; Partnerships
Skills: The accurate keeping of financial records is a vital ongoing activity in all types of businesses. This event provides recognition for FBLA members who have demonstrated an understanding of and skill in accounting principles and procedures as applied to sole proprietorships, partnerships, and corporations.
Objective Test Guidelines
- No materials may be brought to the testing site.
- Electronic devices must be turned off and out of sight.
- No calculators may be brought into the testing site; calculators will be provided.
- Bring a writing instrument.
The general event guidelines below are applicable to all national competitive events. Please review and follow these guidelines when competing at the national level. When competing at the state level, check the state guidelines since they may differ.
- Dues: Competitors must have paid FBLA national and state dues by 11:59 p.m. Eastern Time on March 1 of the current school year.
- NLC Registration: Participants must be registered for the NLC and pay the national conference registration fee in order to participate in competitive events.
- Deadlines: The state chair, or designee, must register each state competitor on the official online entry forms by 11:59 p.m. Eastern Time on the second Friday in May.
- Each state may submit four (4) entries in all events except LifeSmarts, Virtual Business Finance Challenge, and Virtual Business Management Challenge.
- Each competitor can only compete in one (1) individual/ team event and one (1) chapter event.
- Each competitor must compete in all parts of an event for award eligibility.
- A team shall consist of two or three members. Exceptions are Parliamentary Procedure which must be a team of four or five members, and LifeSmarts which must be a team of two members.
Competitors are not permitted to compete in an event more than once at the NLC unless one of the following circumstances applies:
- Modified Events: A competitor may compete in the same event when the event is modified. Note, if the only modification is a name change, competitors may not compete in the renamed event.
- Team Events: One (1) competitor of the team may have competed in the same event at one (1) previous NLC; however, they may not compete more than twice in the event at the national level.
- Chapter Events: Competitors may compete in a chapter event more than once (American Enterprise Project, Community Service Project, and Partnership with Business Project).
- Individual Entry: A competitor who competed as an individual entry in a team event at the national level may compete in the same event a second time as part of a team, but not a second time as an individual.
- Parliamentary Procedure: Two (2) competitors of the team may have competed in this event at a previous NLC; however, they may not compete more than twice at the national level.
- Pilot Event: Competition in a pilot event does not disqualify a competitor from competing in the same event if it becomes an official competitive event. The participant may compete in another event as well as a pilot event.
- Objective Tests: Ties are broken by comparing the correct number of answers to the last 10 questions on the exam. If a tie remains, the competitor who completed the test in a shorter amount of time will place higher. If this does not break the tie, answers to the last 20 questions will be reviewed and determine the winner.
- Objective and Production Tests: The production test scores will be used to break a tie.
- Objective Tests and Performances: The objective test score will be used to break a tie based on the tie-breaking criteria of objective tests.
- Reports/Projects and Performances: The report/project scores will be used to break a tie.
- Performances: Judges must break ties and all judges’ decisions are final.
- State chair/adviser must register all competitors for NLC competitive events online by 11:59 p.m. Eastern Time on the second Friday in May.
- All prejudged components (reports, websites, projects, statement of assurance) must be received by 11:59 p.m. Eastern Time on the second Friday in May.
- All prejudged projects and reports must be submitted electronically.
- All Statements of Assurance must be submitted online.
- All production tests must be received at FBLA-PBL by 11:59 p.m. Eastern Time on the third Friday in May.
- All production tests must be uploaded online.
- State chair/adviser may make name changes only (no additional entries) by 11:59 p.m. Eastern Time on the first Friday in June. Competitor drops are the only changes allowed after this date and onsite.
The number of competitors will determine the number of winners. The maximum number of winners for each competitive event is 10. Only one (1) award is given to the schools competing in chapter events (American Enterprise Project, Community Service Project, Local Chapter Annual Business Report, and Partnership with Business Project).
Certain events may allow the use of additional materials. Please refer to event guidelines.
Americans with Disabilities Act (ADA)
FBLA‑PBL meets the criteria specified in the Americans with Disabilities Act for all participants who submit a special needs form.
Recording of Presentations
No unauthorized audio or video recording devices will be allowed in any competitive event. Participants in the performance events should be aware the national association reserves the right to record any performance for use in study or training materials.
- All objective tests are completed online and consist of 100 multiple choice questions.
- Ask your teachers to share with you the different textbooks they use as resources. Look over the end-of-chapter summary and the glossary words.
- For events such as Agribusiness, Business Calculations, Economics, etc. find other teachers in the school who can give you possible resources to study.
- Avoid talking to others as you enter the room.
- Instructions for online testing will be given to you when you sit down at a computer.
- The calculator function on the computer will be provided for your use. You may not use your own calculator.
- If the equipment doesn’t work, raise your hand until help comes. Review these test-taking tips.
Sample Practice Materials
- Bean Counter's Bookkeeping & Accounting Quizzes, Games, and Lectures
- Principles of Accounting
- UCD Accounting Glossary
- FBLA Financial Literacy Initiative
2. Prepare a trial balance, a worksheet (8 and 10 columns), and an adjusted trial balance.
3. Prepare and interpret an income statement.
4. Prepare and interpret a balance sheet that reports the financial condition of the entity.
5. Prepare a statement of Owner’s Equity/Partner’s Equity/Retained Earnings.
6. Explain the purposes of each financial statement and describe the way they articulate with each other.
7. Analyze the effects of revenue on financial statements.
8. Use manual and computerized accounting systems for preparing financial statements and evaluating the effect of changes..
9. Determine acceptable levels of financial performance to be used as a basis for management decisions.
10. Define terminology and classifications necessary for financial statements.
2. Identify and describe the different classes of stock and explain the rights afforded each class of stock.
3. Journalize transactions: capital stock issuance, organization costs, stock subscriptions, and dividend declaration and payment to stockholders.
4. Determine stockholders equity and earnings per share and prepare a statement of stockholders’ equity for a corporation.
5. Determine stockholders equity and earnings per share and prepare a statement of stockholders’ equity for a corporation.
6. Perform all of the functions of the closing process, journalize and post the closing entries, prepare the postclosing trial balance, and prepare all of the appropriate financial statements and reports for a corporation.
7. Apply appropriate accounting techniques for the formation, allocation, and distribution of earnings and dissolution of corporations.
8. Describe the purposes of the revenue, expense, and drawing accounts and illustrate the effects on capital/owner’s or stockholder’s equity.
9. Describe the different levels of liability and taxation for Subchapter S Corporations and Limited Liability Corporations.
10. Analyze the information derived from the corporate financial statements.
2. Analyze and describe how a change in an independent variable can produce a change in a dependent variable.
3. Calculate financial strength analysis by determining current ratio of assets to liabilities, acid-test ratio, debt ratio, working capital, equity ratio, and equity and earnings per share.
4. Apply differential analysis to make decisions such as buying or making a product; leasing or buying an asset; discontinuing a department, plant, or product; replacing or repairing equipment; or offering discounted prices on special orders.
2. Analyze and journalize purchases of merchandise on account; demonstrate knowledge of net purchases; post to proper ledger accounts; and prove subsidiary ledger by preparing a schedule of accounts payable.
3. Record transactions and journalize entries to write off uncollectible accounts using the direct write-off and allowance method.
4. Prepare adjustments using aging accounts receivable, percentage of sales, and percentage of accounts receivable methods.
5. Explain the purpose of notes payable and notes receivable and calculate, record transactions, and journalize interest and payment of notes payable and receivable.
6. Prepare adjusting and reversing entries for prepaid and accrued expenses and unearned and accrued revenue.
2. Prepare master and flexible budgets and describe how they are each used.
3. Compare the projected budgeted amounts with the actual amounts through preparation of a performance report.
4. Use cost-volume-profit and contribution margin analysis to plan operations.
5. Prepare budget analysis using spreadsheet software.
6. Calculate and prepare cash flow statements.
7. Determine cash flows from operating activities, investing activities, and financing activities.
2. Interpret and explain costs and accounts that are unique to the manufacturing process.
3. Calculate manufacturing cost of finished goods by determining cost of direct materials, labor, and factory overhead.
4. Prepare a schedule of cost of goods manufactured and explain its relationship to the income statement.
5. Journalize entries that summarize cost records at the end of the fiscal year.
6. Use various allocation methods to allocate overhead and indirect costs.
7. Explain the difference between variable, mixed, and fixed costs.
8. Compute break-even and cost-revenue analysis values and understand how to interpret the results.
9. Prepare a materials ledger and a finished goods ledger for a manufacturing business.
10. Apply appropriate software to prepare and maintain cost accounting records.
2. Differentiate between cost of sales and general operating expenses.
3. Compare and contrast transactions recorded as assets versus expenses, such as supplies inventory/supplies expense.
4. Calculate sales dollars and sales units required to earn a set amount of net income.
5. Calculate the contribution margin rate, breakeven point, sales dollars, and units required to earn a planned amount of net income.
6. Describe the effects of changes in sales volume, unit costs, and unit sales prices on net income.
7. Calculate the cost of goods sold for a specified period.
8. Calculate amount due with given terms of sales, sales tax, discounts, etc.
9. Calculate cash discounts/trade discounts with given terms of sale, shipping, etc.
10. Identify the difference between debit and credit memorandums.
2. Analyze and journalize purchases and sales on account.
3. Analyze and journalize transactions for the return of merchandise and post to the appropriate ledger accounts.
4. Journalize and post the adjusting and closing entries for a business.
5. Record business transactions in the general journal and the special journals using appropriate correction methods.
6. Post business transactions to the general and subsidiary ledger accounts and prove their accuracy.
7. Journalize business transactions using multicolumn journals.
8. Journalize adjustments of prepaid (deferred) expenses as assets or expenses, of prepaid (deferred) revenue as liabilities or income, and of accrued expenses and accrued revenue.
9. Prove and rule journals.
10. Prepare a post-closing trial balance.
11. Journalize entries in a voucher system.
2. Identify differences between pretax financial income and taxable income.
3. Identify special issues related to deferred income taxes, explain the effect of various tax rates on deferred income taxes, and describe their presentation in financial statements.
4. Differentiate between taxation at personal and business levels, including tax-planning strategies.
5. Calculate federal income tax expense, record the adjustment, and complete the corporate worksheet.
6. Identify the basic differences between Generally Accepted Accounting Principles (GAAP) and tax law.
7. Distinguish between tax avoidance and tax evasion.
8. Evaluate accrual methods, inventory methods, and depreciation options to determine tax effects.
9. Analyze current business decisions to determine the impact on taxes.
2. Calculate and journalize deductions including federal income tax, social security tax, Medicare tax, state income tax, and other deductions to determine net pay.
3. Calculate and journalize employer’s payroll taxes (e.g., social security, Medicare, federal unemployment, state unemployment) and employee benefits paid by the employer.
4. Prepare payroll checks and vouchers.
5. Record payroll earnings and deductions in a payroll register.
6. Maintain employee earnings record.
7. Complete federal and state employment tax forms such as W-4, W-2, quarterly reports, and unemployment tax forms.
2. Determine the value of inventory using various costing methods, such as LIFO, FIFO, or Weighted Average method.
3. Estimate the cost of inventory using the retail and the gross profit methods.
4. Calculate and analyze merchandise turnover ratio.
5. Determine costs of obsolete inventory and/or materials.
2. Calculate and journalize annual and partial-year depreciation for plant assets using straight line, sum-of-the-year’s digits, declining balance, production unit, MACRS, and depletion of natural resources.
3. Record disposition of plant assets through buying, selling, or trading.
4. Explain, compare, and analyze various depreciation methods and their effect on the value of assets.
5. Identify property, plant, and equipment assets; and record their initial costs.
2. Analyze and journalize departmental purchases/cash payments and sales/cash receipts in special journals and posts to ledgers.
3. Create a departmental statement of gross profit, financial statements, and end-of-period work.
4. Prepare and maintain payroll records for a departmentalized business.
5. Journalize and post adjusting and closing entries for a departmentalized business.
6. Apply appropriate software to maintain departmentalized records.
2. Explain the importance of ethical business decisions.
3. Adhere to financial laws and regulations and to established company rules, regulations, and policies.
4. Utilize security measures to minimize loss and to create trust (e.g., maintain data security, develop strategies to protect data).
2. Create financial statements for partnerships including end-of-fiscal-period worksheet, income statement, distribution of net income statement/owner’s equity statement, balance sheet, adjusting and closing entries, and post-closing trial balance.
3. Apply appropriate accounting techniques for the formation, allocation, and distribution of earnings and dissolution of a partnership.
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