Seven multiple-choice question study tips I wish someone told me before the CPA PEP Core 2 accounting exam

AS YOU'RE gearing up for the CPA program's Core 2 module exam, you may be anxious about the multiple-choice questions (MCQs). After all, Core 2 MCQs test mostly on Management Accounting (MA) technical competency, which every student in the CPA program will tell you is tough to understand.

I remember when I wrote my Core 2 exam, I was breezing through the first few MCQs, only to hit a question that completely threw me off. That’s when I realized that you can’t just “wing it,” you need a real strategy. In this article, I’ll share seven study tips I wish someone told me before I took my Core 2 exam.

Core 2 Module Blueprint

Core 2 is the second module in the CPA Canada Professional Education Program (PEP). It’s technical-heavy and unforgiving. While the pass rate for Core 2 is higher than Core 1, you’ll hear your peers say that Core 2 is much harder. From my experience as a CPA exam tutor, I believe it’s due to the MA competency, since most students have never worked in the sector. This means it’s hard for many to grasp concepts like below:

• Break-even point (BEP)
• Relevant costing
• Constrained resource decisions
• Cost-volume-profit (CVP) analysis
• Transfer pricing
• Activity-based costing (ABC)
• Budgeting

You may recall a few of these topics from your university, but Core 2 will add scenario twists and time pressure, making you feel like you never really learned them. Below is the Core 2 Module Blueprint, which provides the weightings of MCQs:

Weighting image courtesy: Gevorg Grigoryan, CPA.

This shows that 50-70% of the MCQs are on MA, so out of 75 MCQs on the exam, you can expect MA on up to 50.

Tip #1: Time management is key.

My first tip is to get a hold of your time budget. The Core 2 exam is four hours, broken down to one hour on the case-portion and three hours on the MCQs. In reality, most students don’t spend one hour on the case, it can be up to 1.5 to two hours. Unfortunately this leaves little time on the MCQs. I suggest starting with the case portion first, with a strict one-hour time limit, then move to MCQs. I know it may not be realistic but try your best. With the three hours remaining, you’ll have about two-and-a-half minutes per MCQ.

Here’s an exam process to follow: The exam starts at 9 a.m. Aim to finish the case-portion around 10 a.m. and make a note of that time. Once you’re done, switch to solving the MCQs and write with big letters in your rough note: “Started MCQs at 10.” When you’re one hour into MCQs, check how far you’ve advanced. You should have solved about 25 MCQs. If you’re behind, speed up. If you’re ahead, take more time to think through them. I did this when I wrote my Core 2 exam and it helped me catch myself when I was spending too much time in one area.

This strategy is effective, but not every MCQ is created equal. Some take 10 seconds, others 10 minutes. This leads me to the next tip.

Tip #2: Flag and move on.

Like in chess, we have to make sacrifices. I’m not saying you should skip everything, just those lengthy, time-consuming ones that cost you easy marks. For example, when you get a question that’s totally new to you, or you can’t solve within two minutes of starting, you should flag it and move on. This helps to get easier points from subsequent questions. You would be surprised how often another question gives you a hint to help you solve the earlier one.

At the end of the exam, go back and re-attempt those tough MCQs. Make sure all MCQs are answered, don’t leave anything blank and take guesses at the end if you need to.

Tip #3: Know what’s tested.

I’ve shown you the Core 2 Exam Blueprint and you know that MA is our top priority. Notice that Strategy and Governance (S&G), Finance and Financial Reporting are also tested. I suggest studying the key topics from S&G and Finance, but don’t spend a lot of time on Financial Reporting. This is a very small component of Core 2 MCQs and you’ll remember most of it from your Core 1 module anyways.

Tip #4: Strategic exam approach.

One of the best ways to solve MCQs efficiently is to approach them the right way. Here are my exam writing tips:

Eliminate wrong answers first. When in doubt, start by striking out the options that are definitely wrong. Exam authors prefer to come up with one correct answer and one obviously wrong one, while the others are filler. Start by cutting those fillers out first, helping you improve your chances of choosing the right one.

Start with the choices. Read the A, B, C, D, E choices first, then read the question. Sometimes looking at the answer, before reading the question, helps you understand the frame.

Watch for keywords. Words like "NOT," "EXCEPT," and "MOST," are easy to miss. Highlight those words with your mouse to avoid misreading the question.

Read backwards. Start with the last sentence of the question (what they’re actually asking), then go back and read the full thing. This helps you stay focused while reading the question scenario.

Tip #5: It's okay to second-guess yourself.

Everyone has heard the advice to "trust your gut" and not second-guess yourself on exam MCQs. Research suggests that this is not true. Studies have shown that students who change their answers on MCQs tend to switch from incorrect to correct choices. This means your first answer isn't always the most accurate and it’s okay to second-guess yourself, up to a reasonable extent. Here’s how to do it smartly: Select the answer you believe is correct and move forward.

At the end of the exam, review your answers and feel free to make changes if you identify a better option. Don’t over-analyze or second-guess every answer, but be open to adjusting when something looks off.

Tip #6: Practise smart, not just hard.

You should certainly practise as many MCQs as you can. You’ll find some are easy to grasp, while others need more time and repetition. For example, performance measurement and Balanced Scorecard topics are straightforward, but process costing or joint product costing are tougher. To help us focus on our weak areas, I suggest creating a “tough MCQs” list and revisit those weak spots regularly. This way you don’t spend excessive time on topics you already know.

Tip #7: Debrief all the time.

Debriefing isn’t just for CPA cases, it works for MCQs too. Every time you practise MCQs, ask why you got it wrong. What was your thought process? What changes can you make next time? For the ones you got right, again ask yourself whether it was just a lucky guess or did you really know the answer. It’s important that you go back and understand the “why.” Also, debrief small sets of five to 10 MCQs at a time, as opposed to dozens of MCQs, so that you remember your reasoning while it’s fresh in your mind.

Conclusion

Multiple-choice questions might seem simpler than CPA Canada's accounting case studies, but they’re a lot more technical. If you want to pass the Core 2 exam without running out of time, then having a smart MCQ strategy is key. This means, during your studies and the exam, you need to understand the concepts and approach them strategically.

If you practice smart, debrief often, and don’t let one question affect your flow, you’ll be on your way to passing Core 2 and getting closer to the Common Final Exam (CFE). And on your way to becoming a chartered professional accountant.

Gevorg Grigoryan, CPA, is an instructor, mentor and coach to students in the CPA program. Visit Gevorg CPA to learn more and subscribe to Gevorg’s YouTube channel to access CPA program videos. Title image courtesy Gevorg Grigoryan, CPA. The content of this article is intended to provide the author's personal opinion only. Students are responsible for their own study guidance and should seek out multiple sources.