You Cannot Beat FREE FREE FREE

Home Runs Just Take Preparation

From: Joe

(a)-Greetings from Richmond, Virginia, where we actually had a little snow Tuesday morning. It looked beautiful and did not freeze on the road-the best of all situations.

(b) -All of us here at www.CPAreviewforFREE.com are celebrating. After a few short weeks in business, we will be going over one million (1,000,000!!!) page views in the next day or two. With no marketing, we have hit a million page views. The Internet is wonderful. Thanks to everyone who has passed our URL along to CPA candidates and college accounting students. On to a billion!!!!


(1)-Let me make a personal suggestion. A lot of times when people are preparing for the CPA Exam, they become somewhat self-centered. You have to devote so much time and energy to preparing that it is easy to only think about what you are going through.

It is not a bad idea to break out of that cocoon.

If you know someone else who is preparing for the exam or someone else who is facing a real challenge in the near future or someone else who is simply struggling in some way, take a moment and call them or send them an email or a card and tell them "I know you can do it. I understand that the challenges are tough, but I'm cheering for you. I know you are a winner and you are going to come out ahead."

We get so wrapped up in our own struggles some time that we forget about the needs of those other people who are around us. Yeah, it is great to have everyone cheering you on; it is almost addictive to have people pushing you to succeed. But, even if you are busy studying for the CPA Exam, there has to be a free moment where you can encourage someone else.

For today, you be the one who provides the encouragement. I think you will feel a whole lot better about your own challenges if you reach out to boost the spirits of someone else. If you want more energy and hope in your own life, give a push and a word of hope to someone else.


(2)-A good friend of mine sent me an email on Sunday wanting to meet for lunch this past Monday. We met and he told me that he had reached the point where he really needed to pass the CPA Exam because of his job. He immediately started the litany that I hear so often "I know it is going to cost me a lot of money but I need lots of material and lots of structure and lots of help." I sometimes think that candidates are hoping to pass based on the number of pounds of material they buy or the number of hours of class they sleep through. It was almost as if he were telling me: "surely, if I buy enough and waste enough money, I will pass that exam."

Before the exam became computerized, it was only offered two times per year and every candidate had to make the very best of that opportunity. There was no Spring Training to help you get a sense of where you were in your ability to pass.

Now, however, you can take each part four times per year.
--Why spend any money until you know you have to????
I'll repeat that:
--Why spend any money until you know you have to????

Here's what I told my friend (this is a true story-we were having turkey sandwiches at Stuffy's Deli on Libbie Avenue about 2 miles from the University of Richmond campus).

--Pick your favorite part of the exam.
--Schedule to take that part in the first week of January.
--Go to the "resources" section of CPAreviewforFREE and read all of that information.
--Start answering questions on CPAreviewforFREE. Answer 15-20 questions per day, five or six days per week. You'll probably have to spend 60-90 minutes each time.
--Never guess at an answer (guess on the exam but not when you are learning the material).
--Keep a pad of paper beside of the computer. Whenever you miss a question, write down 10 words (no more) that will help you get the question right the next time.
--Try to have every question on the site done 10 days before you are to take the exam.
--Use the last 10 days to review your notes and the topical areas where you missed the most questions.
--As soon as you finish the first exam, schedule the second one for the third week in February and do the process over again.

When the scores come out,
--if you made below 60, you may well need a more formal review program. You may have to spend the money.
--if you made between 60-65, you might need a program but I think I'd give CPAreviewforFREE one more push in April to save the money. You are close.
--if you made between 65-74, you should be able to pass with more strong push using CPAreviewforFREE. Save your money. You are very close; do the process again but focus more carefully on the ones you miss.
--if you made 75 or above, take all the money you just saved and book a nice vacation.

Why not try CPAreviewforFREE first before you spend all that money? I think my mother would have said "what kind of person wouldn't try free first before spending a whole bunch of money?"


(3)-If you need to unsubscribe, always remember that you merely need to scroll to the bottom of this email and click on the appropriate link. We love having you with us. We love talking with you about the CPA Exam and success. However, if you need to leave us, just click and your name will be removed.

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(4)-Back when I was a kid, one of my favorite baseball players was Roger Maris. He was the guy who broke Babe Ruth's home run record by hitting 61 home runs in 1961. What I liked about him was that he was not the biggest guy or the strongest guy or the fastest guy or the most talented guy. But he broke the record. He was the one who did it. Athletes always seemed to be giants compared to "normal" people but Maris just seemed like a normal guy. Everyone wanted to break Ruth's record but it was the "normal" guy who first did it.

Maris is dead now but I read a magazine article about him a few years back and they had this great quote from him: "You hit home runs not by chance but by preparation." As an educator, I wish I could write that line across the forehead of my students. I am not sure what happens in the education system but students do not equate preparation with academic success. I am giving an intermediate accounting test on Friday on pensions, deferred taxes, and compensatory stock options. I guarantee that the people who make the highest grades will be the people who have prepared the most since the previous test. It's almost automatic.

Knowing that, you would think the students would have competitions to see who could prepare the most. Instead, they have a tendency to look for shortcuts; they have a tendency to procrastinate; they have a tendency to wait for miracles. Miracles don't often happen (especially not in intermediate accounting or the CPA Exam). Preparation is the key to academic success.

As I have said many times before, I've been in CPA Review since 1980 and I've never met anyone who couldn't pass the CPA Exam. It is easier than most people think. However, I have encountered people who seemed incapable of preparing. They were the ones who struggled. They always had to mow the grass first or pay their bills. They had to get their desk clear and their problems solved and then (and only then) they were going to prepare.

Trust me, the small chores in life can eat up 100 percent of your time. It is not the difficulty of the CPA Exam that keeps you from passing but the small chores that keep you from proper preparation.

Make preparing for the CPA Exam and absolute top-of-the-list priority in your life and you are half way to success. If it is anything but one of your truly highest priorities, passing quickly becomes impossible.


(5) - Here are a few practice questions just for you.


Regulation

John Doe gambles during the year and has gambling winnings of $13,000. In addition, he also has gambling losses of $15,000. How is this reported for federal income tax purposes?

A - The $13,000 is taxable income and $13,000 is a miscellaneous itemized deduction.
B - The $13,000 and $15,000 are netted and a $2,000 loss is reported under miscellaneous income.
C - The $13,000 is taxable income and the $15,000 is an itemized deduction.
D - The $13,000 is taxable income and the amount of the $15,000 in excess of 2 percent of John Doe's adjusted gross income is a miscellaneous itemized deduction.

Answer is A

Tax winnings are included as taxable income on a federal income tax return. The losses can be deducted as a miscellaneous itemized deduction but only up to the amount of the winnings. Therefore, although $15,000 was lost, only the first $13,000 can be taken because that is the amount of the taxpayer's winnings.


Financial Accounting & Reporting

On January 1, Year One, the Waxman Company issues 10,000 stock options to its president. Stock can be bought for $25 per share but only if the president works with the company for four years. She then has two additional years in which to exercise the options. The price of the stock is $29 on January 1 but climbs to $37 on December 31, Year One. A computer pricing model values the option at $8 on January 1, Year One, and at $16 on December 31, Year One. If this is a compensatory stock option, what expense should the company recognize for Year One?

A - Zero
B - $10,000
C - $20,000
D - $40,000

Answer is C

The value of compensatory stock options is determined on the grant date by a computer pricing model such as Black-Scholes. That total expense is then allocated over the years which the person must work to earn the options. The value of the options on the grant date is $8 times 10,000 or $80,000. The person must work for four years so the expense is $20,000 each year.


Auditing & Attestation

An independent CPA is assessing the level of control risk present at a company that is currently being audited. This company has an internal audit department and the independent CPA is evaluating the objectivity of that department. Which of the following is a sign that the department has proper objectivity?

A - The size of the department has grown from 7 people to 19 over the last three years.
B - In order to be promoted within this department, the employee must have become a CPA.
C - The head of the department meets privately with the chair of the board of directors each quarter.
D - The head of the department had seven years of experience with an international accounting firm before taking this position with the company.

Answer is C

The independent CPA is interested in both the competence and objectivity of the internal audit department because of the key function that it plays in the company. Answers A, B, and D all relate to competence. These relate to the question: Is there evidence that the people doing the work are capable of doing it properly? Objectivity concerns the internal auditor's independence so that the department can do the work that is necessary. That is usually shown by having a direct line of communication to an authority figure outside of management (usually the board of directors or the audit committee of the board of directors).


BEC

A company uses computer processing to calculate and print out employee paychecks each period. The company is worried that data will be entered into the system incorrectly so that one or more paychecks will be overstated as a means of stealing money from the company. Which of the following is most likely to detect such fraud?

A - Control totals are calculated for significant figures.
B - All paychecks must be hand delivered to the employee by a paymaster.
C - A system is devised so that employees who are overpaid can file a form to reimburse the company.
D - Checks that are not picked up by an employee are given to a person in authority to uncover the reason

Answer is A

Companies worry that numbers such as hours worked or pay rates will be increased in a scheme so that employees can steal money. For example, if 50 hours is entered rather than 40 hours for an employee, that person will get 25 percent more than has been earned. Thus, company officials determine control figures before computations are made and then verify those totals after the computations are made to ensure that no unauthorized changes have been made. Answers B and D are important controls but they are verifying that paychecks are written to actual employees rather than that the amounts have not been manipulated.


Have a great week - as we all move toward Thanksgiving, take a moment to count your blessings. The list will be longer than you might expect.