Don't Limit Yourself
From: Joe
(a) - It snowed in Richmond this morning, about an inch. Did not stick to the road but it clung heavily to every tree limb. I drove out at around 7 and the white snow filling the dark woods was lovely. Even when you are buried deep in preparing for the CPA Exam, it is good idea to notice the beauty around you. Makes the whole experience much easier. All work and no play is never a perfect strategy.
(1) - I usually don't watch the Super Bowl. It is a lot of time spent watching other people. But, for some reason, I did pay attention to the game on Sunday. I saw two teams who really seemed to enjoy the challenge of the battle. They kept slugging until the very end. Great effort is something that should always be prized and both teams put out a great effort.
You will probably never play in the Super Bowl (although I have had, at least one former student play in a Super Bowl). However, there are a few times in life when you have your own chance to put out a great effort.
The CPA Exam is one of those times.
Passing the CPA Exam requires a great effort. You need to put in about 60-90 hours per part and that is never easy to do. You need to put in time almost every day. You need to stay focused. You need to be efficient and make progress. But, if you put in that great effort, you will never regret it.
When the players left the field on Sunday, they could all say "we did it; we gave it our very best." What more can you ask from yourself? When you are faced with a real challenge, that kind of statement is something special.
That is what I want from you on the CPA Exam. When you leave the testing center, I want you to smile and say "I did it; I gave it my very best!!!"
(2) - In operating a live CPA Exam Review program, I had the great pleasure of working with 300-500 people per year who were getting ready for the big challenge. When you work with so many people, you start to notice habits. One that was very prevalent was the tendency to start off from the very beginning with an excuse:
---"Hi, my name is X and I don't do well on tests."
---"Hi, I'm X and I get really nervous during exams."
---"I'm X and I seem to make an incredible number of careless errors."
My response was always the same to such personal apologies: "DON'T BE SO NEGATIVE ABOUT YOURSELF." I could never see any advantages in making people think you were going to fail. How does that help? It is like giving yourself an excuse to fail.
Do you have such negative habits?
Are you letting your own habits limit what you can accomplish?
As you talk about the CPA Exam with others, listen to what you have to say. Why is it so important to have excuses? Why not start out with
"My name is X and I'm going to give it my best shot."
"I'm X and I realize that this is a challenge but I like challenges and I'm looking forward to this one."
"Hi, I'm X and if I put in the time, I can lick this thing."
Don't give yourself an excuse for failure.
Don't give yourself a reason not to try.
Don't give yourself a pass so you can avoid putting in a good effort.
So, here is an exercise that I want you to consider over the next week. Pay close attention to what you tell your friends and family about the CPA Exam. If I were to then ask them how you talk about the exam, what would they tell me?
--Would they say that you are upbeat and optimistic or that you always expect the worse?
--Would they say that you make good things happen or that you seem to have no control over your own life?
--Would they say that you seem to think of yourself as a winner or a loser?
--Would that say that you were pushing toward victory or sliding toward defeat?
Okay, you don't have to be a cheerleader for yourself if that is not your style. However, I see no reason why you should define yourself and your battle with the CPA Exam in a negative way. That just limits who you can be. That just puts you in a box and says "you are stuck."
I don't believe that. I believe that, with work and patience and thought, you can achieve what you want to achieve.
Don't put limits on yourself. There is nothing in your DNA that means that you cannot stay calm and focused and do a good job on the CPA Exam. People just like YOU pass that exam every day. They prepare, they learn, they pass. If they can do it, so can you. You don't have to be Superman. You don't have to leap tall buildings with a single bound. You just have to put in a reasonable amount of time and effort. And, you can do that.
(3) - Here is another nice email that we received recently.
"Just want to say thank you for all that you do. Your CPA review site is FREE and your encouraging words are PRICELESS. Yesterday I took my first part (BEC) of the CPA exam. It was very hard for me. Just thinking that I'll have to do it at least 3 more times made me want to quit. I was thinking that I don't have to do it and maybe don't have to be a CPA. Just being an accountant will do. After reading your e-mail I knew what I need to do - I need to change my attitude and face the challenges. Your interpretation of the president's words gave me a boost of energy and desire to 'give my all to the difficult task.'"
(4) - We send out email lessons like this one about every 7-10 days. If you ever want to UNSUBCRIBE, just scroll to the bottom of any lesson and click on the appropriate link.
We are delighted to have you with us but you always have the right to unsubscribe.
Thanks as always to everyone who has passed along information about www.CPAreviewforFREE.com. We have now had over 1.6 million page views since we started operations. Our goal is to help 100 percent of the CPA Exam candidates to get the points they need in order to pass this exam. 100 PERCENT!! We want to help everyone-not just the rich or the well-employed.
With your help, we can make it!!! Thanks!!!
(5) - In case you have not really tried CPA Review for FREE yet, let me make the following suggestion. Put your money back in your pocket. Then, use us for one part of the exam and see how you do. We think you will be very pleased and you will have saved thousands of dollars. It makes no sense to pay for a program (especially a mediocre program) and then realize that we can get you the points you need to pass for FREE.
Here is one way that we recommend using CPA Review for FREE.
(1) - Make sure that you are qualified to take the CPA Exam. Start the process by going to www.nasba.org and review the requirements of your state. It is probably going to take a month or so for the state to review your application so get the process going.
(2) - Pick the part of the exam that you like the most. It is always easier to get started with a part you like. I am personally a big fan of starting with Financial Accounting.
(3) - Once you get your official Notice to Schedule, schedule to take that part of the exam in roughly 40 days. There is absolutely no reason to study for six months. Let's get started and get it done. Pick a day in about 6 weeks and reserve your seat. Having a date set will get you fired up to do the work.
(4)-Go to www.CPAreviewforFREE.com and read all the information under "resources." It is all important so read it all.
(5)-Start answering at least 15-18 questions per day. It is probably a good idea to go one topic at a time. Make a list of the categories and check them off as you go. Seeing the progress will make you feel good. Work six days per week. Take off one day each week completely and get some real rest and relaxation. Try to average at least 90 minutes per day the rest of the week.
(6)-Do 15 minutes or so of exercise each day to keep the blood pumping. You will feel better and you will do better.
(7)-Never guess at answers when you study. On the exam, you need to guess but not when you are preparing.
(8)-Never worry about how many questions you are getting right or wrong. That is a distraction that does not help one bit. The only thing you want to worry about is getting better.
(9)-If you get a question correct, move on. Don't sit and congratulate yourself.
(10)-If you miss a question, read the answer carefully and find the step you missed and figure out what you missed in that step. Write down 10 words or less to help you get the question/step right the next time you see it. Don't spend time writing pages-keep it to 10 words. You want to improve the odds that you can get the question right the next time. Reading the answer for missed questions may be the single most important thing you do in this process.
(11)-Keep a list of "three-second questions." Those are the very basics-questions that you should be able to read, count to three, and give an answer off the top of your head. Having the basics down is so very vital to learning. "How is interest expense computed?" "Interest expense is the book value of the debt times the effective or yield rate." "How is the amount of cash interest to be paid on a debt computed?" "Cash interest is the face value of the debt times the stated rate of interest." Those are three second questions.
(12)-Never forget that you only need to get 75 points to pass. You are not seeking perfection. Because of the grading system, 75 points does not even mean 75 percent of the questions.
(13)-Once a week, walk back through your three-second questions. You just want to keep the basics fresh in your mind.
(14)-When you get to the final 7-10 days, start going methodically back through your 10 word notes. You want to work on increasing the number of questions that you can answer. That is your only real goal.
(15)-When you get to the final 7-10 days, start answering questions at www.CPAreviewforFREE.com in random mode. You want to get used to seeing questions move quickly from one topic to the next.
(16)-When you get to the final 7-10 days, go to www.cpa-exam.org and go through the tutorial and sample tests. Read everything and just get a feel for how the questions (both multiple choice and simulations) are presented. Don't worry about trying to figure out answers.
(17)-Make sure you read all of the information that came with your Notice to Schedule. They try to explain everything to you in advance to make the testing experience less stressful. Read this material carefully.
(18)-Make sure you know the location of the testing center. Estimate how long the drive will take and what time you need to get there comfortably. You want to avoid any and all stress. You want 100 percent of your energy focused on getting points.
(19)-On the night before the exam, eat normally and get a typical amount of sleep. You will think more clearly during the exam if nothing has upset the normal rhythm of your life. You want to be loose but focused. I am totally against losing sleep to study on the night before the exam. Sleepy people do not pass the CPA Exam.
(20)-During the exam, watch your time very closely. You want to finish with about 10 seconds left. Don't waste time but don't get too rushed.
(21)-If you do not know a question, eliminate as many answers as possible and take a guess. Do not let a tough question get you rattled. Don't spend time on a question that you really do not know. No one is seeking perfection from you.
(22)-- When you leave the testing center, smile and say "I did it; I gave it my very best!!!"
(6)-One more email from one of our "customers."
"I just found this web-site last night and I have already done some questions. At first I was skeptical about it. I thought, 'CPA review for free, how can that be? Maybe there are errors in the questions and answers.' But having read one of the articles on the site and seen the name of the co-founder Joe Hoyle, I am now convinced and feel very fortunate to have found this site. I have used lectures delivered by Mr. Hoyle (in another program) and have found his lectures very easy to understand and follow. I think this is a wonderful resource for CPA students and I wish to say many thanks to Mr. Hoyle and others for creating this."
(7)-Okay, time for some practice questions. Let's see if we can add a point with a bit of practice.
Financial Accounting and Reporting
The Hathaway Company buys land on January 1, Year One for $300,000. The company agrees to pay $6,000 in interest each December 31 for five years and then the entire $300,000. A reasonable interest rate is 10 percent. The present value of $1 in five years at a 10 percent annual rate is .62. The present value of a five-year ordinary annuity of $1 at a 10 percent annual rate is 3.89. Later, Hathaway holds surplus cash and on July 1, Year Two, agrees to pay off the remaining liability for exactly $310,000. What loss is recognized by Hathaway on the extinguishment of the debt? (round all computations to the nearest dollar).
A - $74,512
B - $76,922
C - $80,435
D - $82,867
Answer is A.
The interest of $6,000 per year was not a reasonable rate so that the debt must be recorded at its present value of $209,340. That is $300,000 times .62 ($186,000) plus $6,000 times 3.89 ($23,340). In Year One, the interest expense is 10 percent times the book value of $209,340 or $20,934. Because only $6,000 was paid this period, the remaining $14,934 has to be compounded or added to the book value of the liability. That raises the book value from $209,340 to $224,274. The interest expense for the next six months (until date of payment) is $11,214. That is $224,274 times 10 percent times 6/12 year. Payment for half year of interest is $3,000 (which is assumed to be included in the $310,000) so an extra interest of $8,214 is recognized ($11,214 less $3,000). Since it was not paid as interest, it is also compounded bringing the book value from $224,274 up to $232,488 as of the date of the final payment. Of the $310,000, $3,000 pays off the cash interest for the first
six months so the other $307,000 is paid on the debt. That creates a loss to be recognized of $74,512 ($307,000 less $232,488).
Auditing and Attestation
An auditor is analyzing documents creating by a client company in connection with the purchase of a large warehouse. In studying the ten-year loan that was taken out to pay for the acquisition, the auditor discovers that the company must maintain a current ratio of at least 2 to 1 or the debt can be immediately called by the bank. The current ratio is well over 2 to 1. What impact does this have on the auditor's investigation of the financial statements?
A - The loan must be recorded as a current liability rather than as a noncurrent liability.
B - The requirement impacts the capitalized cost of the warehouse.
C - The requirement impacts the book value reported for the liability.
D - The requirement must be disclosed in the notes to the financial statements.
Answer is D.
Because the requirement has been met to date, there is no change in any reported balances. However, the presentation of the financial statements is still in question because the information about the loan covenant must be properly disclosed. Because of the requirement, the auditor is concerned with the presentation and disclosure assertion in connection with the financial statements.
Regulation
The Andrews Company makes sales on credit of $400,000 in Year One and $500,000 in Year Two and recognizes those amounts for income tax purposes. The company believes that 2 percent of all credit sales will prove to be worthless. In Year One, $3,000 in accounts are judged to be completely worthless along with another $12,000 in Year Two. What is reported by the company as its bad debt expense for income tax purposes?
A - $8,000 in Year One and $10,000 in Year Two
B - $3,000 in Year One and $12,000 in Year Two
C - $3,000 in Year One and $10,000 in Year Two
D - $8,000 in Year One and $12,000 in Year Two
Answer is B.
For income tax purposes, bad debts cannot be anticipated. They can only be deducted when they prove to be worthless and only if they were recognized as income at the time of sale.
BEC
Which of the following measures the average change over time in the selling prices received by domestic producers for their output?
A - Producer price index
B - The US index of domestic production.
C - The inflation index for domestic production.
D - The sales index for domestic output of durable goods
Answer is A
According to the Department of Labor Statistics, "the Producer Price Index (PPI) program measures the average change over time in the selling prices received by domestic producers for their output. The prices included in the PPI are from the first commercial transaction for many products and some services."
Have a great week. Keep focused and adding points. If you do that, there is nothing that can keep you from passing the CPA Exam.
Joe Hoyle
Co-Founder
No comments:
Post a Comment