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184 Weeks of Operation and 31,519,050 Page Views (an average of over 171,000 page views each and every week for nearly 3 ½ years)
Lesson 110
184 Weeks of Operation and 31,519,050 Page Views (an average of over 171,000 page views each and every week for nearly 3 ½ years)
Lesson 110
From: Joe
(1) – For the Greater Good: Here is our Facebook
post from yesterday Monday, a day that is celebrated in the U.S. as
Martin Luther King, Jr. Day. Good words to ponder in this time when so
many people seem to be out for themselves. "Life's most persistent
and urgent question is: What are you doing for others?" Martin Luther
King, Jr.
(2) – A Big Thank You to Our Users: In a post on
Facebook on Tuesday, I mentioned that our website traffic so far in 2012
is up 37.6 percent from this time last year. That’s a very
significant jump and it simply would never have happened without you
folks out there passing along information about our website.
We don’t have the money to advertise or to hire sales reps or to travel
around the country. That’s why those other programs cost so much;
they have to spend a fortune just to convince everyone that their
materials are absolutely necessary. They are in the “convincing”
business. They want your money and they have to spend a lot to talk
you into handing over that hard-earned money. We
take a different approach; we depend on you to read our questions and
answers and then tell others. We are in the “passing the exam”
business. Thanks to all of you guys for passing along the good word –
you are the best. That’s the best advertising.
(3) – Push Yourself to Answer More Questions: I’m
always interested in how many questions people answer on our website.
We get statistics by country (well, for the top 10 countries) about
usage each week. We assume that one page view is the equivalent of one
question read and answered (and hopefully one more point added). For
last week, I looked to see which countries in the top 10 had the most
page views (most questions answered) per visit. Here are the top
few. So, the next time you are on our site, stay on and answer a few
more questions so your country can move up on this list. Don’t get in a
big hurry to shut down and quit – keep working questions and reading
answers as long as you possibly can:
--United States – last week, the average visitor hit 25.73 pages
--South Korea – 19.29 page views
--Canada – 17.35 page views
--Jamaica – 16.27 page views
--Japan – 15.29 page views
--Philippines – 14.97 page views
(4) – Free Samples of Extra Help Available: We
always want to do as much as we possibly can to help everyone add points
and pass the CPA Exam. We are very well known around the world for
our free database of 2,200 questions and answers. But, we also have
super review products that we sell at a modest price to support our site. We recently added samples
of the type of content you can expect from us. I don’t think you can
find better products and I certainly don’t think you can find review
materials at a more reasonable price. There’s a recession going on.
Don’t throw your money away needlessly. You are a college grad; be a
wise shopper.
(5) – The Importance of Being Positive To Pass the Exam: When
I was growing up, Art Linkletter was a very well-known celebrity who
had a daily television show where he talked to interesting people.
(Perhaps you could say that he was the Oprah Winfrey of the 1950s and
1960s.) He was especially popular because he would interview
children. Linkletter came over on television as just the nicest,
kindest person. I always thought it was neat that a person could
become famous simply by being nice.
I once read something he wrote about how he worked: “I was always
a positive thinker, by nature, by inclination, and by practice. So,
while I’ve had some disasters, like everybody else, and I mean
everybody, I say ‘What are we going to do to make it better next time?’
and next time it’s better!”
I deal with about 80 very bright college students per semester.
These are intelligent young people who should be thinking about what
they can do to make the world a better place. I would estimate that
the number of truly positive thinkers that I meet each semester is about
10-25 percent. It is a wonderful characteristic to have but it is not
as prevalent as I would hope. I would love to see the number of
positive thinkers in this world increase (and increase immediately).
When it comes to the CPA Exam, I think positive thinking is ever so
helpful. I’m convinced that if you separated all of the candidates
into “positive thinker” and “not positive thinker” categories, the
positive thinkers would pass the CPA Exam twice as often as the others.
No doubt in my mind. Being a positive thinker just gives you the
energy to get up and do what needs to be done. Too many people are
negative. You know the sound: “I can’t do it because . . . .” and
then they provide a litany of reasons why they will come up short. If
you give yourself an excuse to fail, it becomes so much easier to
fail.
I have a rule in my office at campus: “never tell me negative
things about yourself because it doesn’t do you or me any good.” I
want to build my students into positive people and letting them dwell on
the negative is useless.
Do you really want to pass the CPA Exam? Of course, there is no
doubt about that. Are you willing to do what it takes to get that
passing score? I have people every day assure me “tell me what to do
and I’ll do it.”
Okay, if you are serious – here’s some great advice. Work on
becoming a more positive person. That will help and possibly help a
lot. For many things in life, you’ve got a choice between two
responses to the bad things that occasionally happen:
--Gosh, I screwed up because I am truly stupid and careless and dumb and I’ll never do better.
or
--What are we going to do to make it better next time?
Don’t wallow in negativity. That provides no benefit. Figure
out what you want to do better and then shoot for it. That’s doesn’t
guarantee that you’ll make it. There are no real guarantees in life.
But it does give you a much, much better chance.
Here’s an exercise that I want you to try over the next few days.
Become more self-aware. Pay attention to what you say and think.
When you talk and think, do you sound positive or do you sound
negative? The first step in getting more positive is to get a better
understanding of your internal attitude at the present time. When you
talk about yourself, when you think about yourself, listen to what you
say as if you were an outsider. Do you sound like a “can do” person or
a “never going to happen” person.
Then, whenever you find yourself being negative, stop yourself and
start over. This time, be more positive. Learn to listen and then,
if your attitude is negative, stop and change it. You are not a
machine; you are capable of change. You are a human being who can make
changes. If you work to become a more positive person, it will help
you greatly in achieving your goal of passing the CPA Exam.
(6) – Let’s do some practice and add some points.
FAR
At the end of Year One, the CJS Company has a portion of its
organization that qualifies as a separate operating segment. This
year this operating segment has operating income of $800,000. This
operating segment meets all of the criteria for being “held for sale.”
The segment is likely to be sold within the next year at a gain. On
CJS’s income statement for Year One, how is this segment reported.
A. Revenues are reported as revenues and expenses are reported as expenses.
B. The $800,000 operating income is reported as an “other gain or loss.”
C. The $800,000 operating income is reported at the bottom of the income statement under discontinued operations.
D. The $800,000 operating income is reported at the bottom of the income statement as an extraordinary item.
Answer is C
Because the portion of the reporting company qualifies as an
operating segment that also meets the rules for held for sale, the
operating income is dropped to the bottom of the income statement and
disclosed as a discontinued operation. If the sale has actually
occurred, the gain or the loss on the sale is also included here. If
the sale has not occurred, only an impairment loss expected from the
sale is recognized currently. That impairment loss is the amount by
which the net book value of the operating segment exceeds fair value
less any anticipated cost to sale.
Auditing
The auditor is examining the financial statements for Zeller
Corporation and discovers that the inventory turnover for the current
year was much higher than that of the previous year. Which of the
following is a potential reason for this change that would not concern
the auditor as to whether a material misstatement might have occurred?
A. The company placed a large order for inventory near the end
of the year but the delivery got delayed until the following year
because of a strike by truck drivers.
B. Inventory sales were made near the end of the year and
recorded as FOB shipping point when they were really FOB destination.
C. Near the end of the year, the company started capitalizing inventory costs that had previously been expensed.
D. Goods were shipped out on consignment but recorded as sales
Answer is A
Inventory turnover is the cost of goods sold for the year divided
by average (or ending) inventory. An increase in inventory turnover
is caused by cost of goods sold increasing or inventory decreasing.
If an expected order was not received by the end of the year, inventory
levels would be below the normal level. And, since there is a
legitimate reason for this drop, it meets the criteria here. An
incorrect FOB point is a mistake that would need to be investigated.
Capitalizing a cost causes the inventory balance to increase rather than
decrease. Recording consignment shipments as sales would cause the
noted problem here (high cost of goods sold and low inventory) but that
is mistake that would be investigated by the auditor.
Regulation
The CPA firm of Zoubek and Scheyer audits the Showton
Corporation. The IRS has asked to review the working papers of that
engagement in connection with an ongoing investigation. Should the CPA
firm provide those working papers?
A. Yes, in all cases
B. Yes, if there is a lawful subpoena
C. No, in all cases
D. No, even if the client provides consent
Answer is B
A CPA firm cannot provide working papers to an outside party
because of the confidentiality between the auditor and the client.
However, exceptions do exist if there is an enforceable subpoena or if
the client provides consent for the conveyance.
BEC
Albert Brooks has recently joined the Board of Directors of the
Chapel Corporation. Mr. Brooks is curious about the actions that the
board of directors can take. Which of the following actions can a
Board of Directors normally not take?
A. Declare a cash dividend on both preferred and common stock.
B. Fire the president
C. Modify the articles of incorporation filed with the state
D. Reduce the pay rate of the chief financial officer
Answer is C
The Board of Directors oversees the work of the management team and
also helps in policy and strategy decisions. Therefore, A, B, and D
all fall under normal duties of the Board. However, changes in the
articles of incorporation can literally change the nature of the
corporation, a responsibility that is reserved to the stockholders as a
group.
Have a great week – work hard and do lots.
Joe Hoyle
President and CoFounder
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