Forget Luck - It Takes Work and Belief
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Lesson 44
From: Joe
(1) - It has been a great week here at CPA Review for FREE
(www.CPAreviewforFREE.com).
---First, the number of our visitors last week was 9.7 percent higher
than in any of our previous 59 weeks. That is a lot of growth in just
one week.
---Second, we crossed over 5 million page views. I am so pleased by the
number of people who are using our questions and answers to pass the CPA
Exam. I went back and checked and the very first week we were in
business we had 1,920 page views. Now, we have averaged nearly 85,000
page views per week for our entire time in existence. We could not have
achieved that type of success without you guys spreading the word.
Thanks!!!!
---Third, we got a whole bunch of wonderful emails from you folks. Here
are just a couple. As I always say: if these folks can do it, so can
you!!! They did not do a single thing that you cannot do. As you read
these emails, picture yourself writing them. It is always great to have
a real sense of what success is going to feel like. You want to have
that taste of success.
From DC: I just found out that I passed FAR with a score of 94! You
were one of the first people that I wanted to tell because I owe it in
large part to you. In studying for it, I used CPA Review for Free (which
was so helpful!). I also took "big name CPA Review program"
(mainly because my company paid for it), but I still found that your
questions hit more areas or explained them in a better way, and
definitely would not have been as prepared without them. Your weekly
emails are so great, especially when I don't think I can study anymore.
I'm taking Audit on Monday, so hopefully that goes as well!
From US: I am very very happy to inform you that I cleared Regulation
exam with an 84 score. Thanks a trillion to CPAReviewforfree for the
wonderful guidance I got. This time, as I was busy with my office work,
I did not find much time to work online. Hence, I paid for your pdf
print version and got the whole set of questions printed. I read them
while flying to the US from Mumbai. On reaching the US, for the 3 days
before the exam, I went through each and every question of
CPAReviewforfree very carefully. On the actual exam, the MCQs were very
tough - testing our basic understanding of the concepts - and I spent a
good amount of time on them. I was left with just 50 minutes to
complete the simulations. I hurried through them and the last
communication question was answered in under 5 minutes. I was worried
and felt helpless at the end of the exam. Honestly, I kept my fingers
crossed as to the result as the MCQs were tough and I had not done full
justice to the
simulation questions. I still got a score of 84! That shows that I had
done very well in the MCQ! That could not have happened without
CPAReviewforfree.com. Once again, thanks a lot.
From KH: Wanted to pass on some news I just got back about the CPA
exam. So far I have taken BEC and REG and I just found out that I passed
both! I felt okay with BEC, but I left REG feeling very unsure,
especially with the simulations. As you can expect, I was incredibly
relieved to see my score tonight. I got an 86 in BEC and a 95 in REG
(never would have predicted that) - now I am thinking that I could have
studied a few less hours and spent some time enjoying the July 4th
weekend. I am taking FAR on Saturday and AUD on the 28th. These scores
have given me a lot more motivation to push through this last week and a
half. As always, thank you for all of your help, especially through
cpareviewforfree. Your emails always serve as inspiration, and the
explanations to questions on your website are very informative.
Okay, such notes should inspire everyone to work just a bit harder and
knock out that exam. They did it-so can you.
(2) - One of my all-time favorite quotes comes from Thomas Jefferson
(although I have seen it attributed to other folks - I'm not 100 percent
sure who actually said it first):
"I'm a great believer in luck, and I find the harder I work, the more I
have of it."
The harder I work; the luckier I get. How could anything seem more
true?
I started my fall classes Monday (yesterday) here at the University of
Richmond. I have 64 students, 62 of whom are new to my classes.
Students really do want to do well but they often seem bewildered by how
to achieve success in class.
I want to do well; I'm just not sure how is a constant comment.
Students often seem to believe that there is some secret ingredient for
success. If they only were lucky enough to know that secret, they would
be at the top of the class.
Therefore, my goal in our first meeting is to convince them that
everyone can do well (even in Intermediate Accounting II). If I cannot
convince them that they can do well, I may well have lost them for the
semester. "I've taught this class for nearly 40 years. I'm convinced
that you and everyone else in this room can make an A if you do a few
relatively simple things. You need to put in a reasonable amount of
time, you need to focus on your goal, you need to prepare/study, you
need to practice what we go over, and you need consistency."
And, then, I stop and ask "Okay, who doesn't have one or more of those
five? Speak up now.
reasonable time,
focus,
preparation,
practice, and
consistency."
Not surprisingly, every student knows they really do have those five-all
of them. It is now their job to make use of them. I never tell them
that they have to be brilliant. That's not even interesting to me.
There are not many brilliant people in the world and I'm not too sure
how truly successful they are.
I just need those five. The things you need for success are in your own
hands.
Those five--reasonable time, focus, preparation, practice, and
consistency-are what it really takes. But you start losing points
really fast if you let one (or more) of those get away from you. If you
start cutting corners, the points begin to fall. If you start taking
things for granted, you lose ground.
In my classes, I want everyone to make an A which means I want everyone
to have all five.
In CPAreviewforFREE, I want everyone to pass the exam which means I want
everyone to have all five.
Do you have those five? Sure, you certainly have the potential to do
all five. There is nothing standing in your way to having all five.
Forget luck - if you will give me those five things, and then use CPA
Review for FREE in the manner that I suggest, I believe you can pass and
you can do so for absolutely no money at all.
(3) - Remember that you can always unsubscribe from these email lessons
at any time you wish just by scrolling to the bottom of any lesson and
clicking on the unsubscribe button. We have over 8,000 subscribers and
we love having you but, when you are ready to go, feel free to
unsubscribe.
(4) - A lot of people take the CPA Exam at the end of August. If you
know someone, other than yourself, who is getting ready to take the
exam, call them up or send them an email and wish them luck. It is
easy to get very self-absorbed as you study to pass the CPA Exam. But
life always works better if you open your eyes and notice the needs of
others and try to help them out. Call someone this evening and tell
them "I know you are getting ready for the CPA Exam. You've worked
hard; I just know you'll be successful."
That will make that person feel better and it will make you feel better
also.
(5) - Speaking of luck (I must be in a mood to point up that you don't
need luck, you just need to utilize the talents you have).
A few weeks back I went to see the relatively new Harry Potter movie.
(For those of you who don't know, Harry Potter is a boy wizard who goes
to school at a wizard school). There was one scene that I found very
interesting. Harry has a friend who plays on a sports team and plays
rather poorly. He gets depressed about it and plays worse. He is so
nervous about doing well that he gets all tight and does poorly in the
first couple of games. We've probably all felt that way.
Harry has a vial of Liquid Luck (remember, he is a boy wizard). Right
before the big sports match of the season, Harry pretends to pour the
liquid luck into a glass that his friend is about to drink. The friend
thinks he has consumed the liquid luck. The friend immediately goes out
and plays the match of a lifetime. He is the star of the game and
helps his team win. He goes from being a poor player to being a star.
He is convinced that he has been lucky because of the potion. His
success was all because of Liquid Luck.
But, of course, Harry Potter had fooled him. He had NOT really poured
the liquid luck into the glass. The friend just thought he had.
So, luck had absolutely nothing to do with his success. Once, he
believed in himself then that belief drove him to succeed. Simple
concept.
This is just a quick comment. I am not going to beat this to death. If
you believe in yourself, you have the chance to leap tall buildings with
a single bound. However, if you truly have doubts, if you don't really
believe in yourself, your challenge is going to be so much harder. It
is hard to win if you think you will lose.
Let's do a quick test. And, you have to tell the truth. If I were to
look you in the eyes and ask "on a scale of 1 to 10, how confident are
you that you are going to pass the CPA Exam by this time next year?"
what would you answer? Would you say that you are very confident-a 9 or
a 10? Or, would you say that you are full of fear and trepidation and
are closer to a 2 or 3?
How can you improve your odds? Improve that number.
This just may be the advice that you can use to add some serious points
to your CPA Exam score. How can you raise your self-confidence level by
JUST ONE POINT? Just that change in self-confidence will help
amazingly. That could be so very important to you. If you are a 5, how
could you become a six?
Well, you don't get more confident by wishing it so. I'm sorry; it
doesn't work that way. If you are setting there, saying "geez, I really
do want to have more self-confidence" that is nice but it probably
doesn't add a point.
You get more confident by doing stuff. You get more into the rhythm,
you see how things tie together.
The more you work; the stronger you get. If you really want more
confidence, go back to my previous list of the Big Five:
reasonable time,
focus,
preparation,
practice, and
consistency
Now, pick one of these five, and for the next week, work hard to get
better at doing that one thing. Spend more time each day or work more
days in the week or whenever you practice do 10 percent more questions
than you used to do. Pick one of these five and get better at it this
week.
At the end of just one week, if you have managed to get better at one of
those Big Five, I would be willing to bet that your confidence level
will be higher. Okay, you won't go from a 1 to a 10. But, in just one
week, by working on that one thing and getting better at it, you can
(and will) go up in confidence.
And, as Harry Potter's friend discovered, just adding some confidence,
really does make all the difference in the world.
(6) - Time to Practice: Let's see how you do on a couple of practice
problems.
FAR
A company's income statement shows salary expense for the current year
of $400,000. The company also reported salary payable of $13,000 as of
the beginning of the year but $28,000 at the end. If the company uses
the direct method of reporting operating activity cash flows, what is
reported in connection with this salary?
A - An addition of $15,000 to net income
B - A subtraction of $15,000 from net income
C - Salary paid to employees of $415,000.
D - Salary paid to employees of $385,000
Answer is D
If the company uses the indirect method, net income is adjusted for
changes in operational assets and liabilities such as the salary
payable. Since the liability went up, the company paid less and the
answer would be A because of the cash savings. However, if (as is the
case here) the company uses the direct method, the actual amount of cash
paid or collected is shown. The expense was $400,000 but the related
liability went up by $15,000. Thus, less was actually paid. The
company only paid cash to its employees during the year of $385,000.
Regulation
Vikontra Corporation is having financial difficulties and is not paying
its bills as they come due. The company owes Jack Winslow $11,000. He
wants to push the company into Chapter7 bankruptcy by filing an
involuntary petition. Which of the following is true?
A-If Vikontra has less than 12 creditors, then Jack Winslow alone can
force the company into bankruptcy by filing an involuntary petition.
B-If Vikontra has 12 or more creditors, then Jack Winslow alone can
force the company into bankruptcy by filing an involuntary petition.
C-If Vikontra has less than 12 creditors, then Jack Winslow alone can
force the company into bankruptcy but the debt must be larger.
D-If Vikontra has 12 or more creditors, then Jack Winslow alone can
force the company into bankruptcy but the debt must be larger.
Answer is C
If there are less than 12 creditors (Answers A and C), then only one
creditor needs to sign the petition but that person must have a debt of
$13,475. If there are 12 or more creditors (Answers B and D), then
three creditors must sign but, again, the total of those debts must be
at least $13,475. The $13,475 figure goes up slightly every three
years, the next time in 2010. Notice, though, that the exact amount of
that standard is not relevant to this question. The speculation is that
the CPA Exam avoids asking questions that will change as the numbers
change over time.
Auditing & Attestation
The CPA firm of Terry & Francona is auditing the financial statements of
Fenway International Corporation. Fenway owns a number of unique
investments where the market value is difficult to determine. The CPA
firm hires a specialist in investment analysis to help determine the
market value of these assets. Which of the following statements is
true?
A-This investment analyst must be independent of the client company.
B-The hiring of this analyst means that the firm must provide a
qualified audit opinion.
C-The hiring of this analyst means that the firm must add an extra
paragraph to the end of the audit report to alert readers to the work of
the specialist.
D-The firm must assess the qualifications of the specialist as part of
the audit process.
Answer is D
The CPA firm is required to ensure that the specialist is truly capable
of making the assessments that are being asked. The qualifications must
be assessed carefully. If the analyst is not independent, the CPA firm
can still make use of the information provided by the specialist but
should consider carefully the impact of the relationship with the client
in making that assessment. Finally, use of a specialist is a normal
audit technique and does not require any change in the audit report.
However, the CPA firm does have the right to make mention that a
specialist was used if that information is viewed as helpful.
BEC
Able, Baker, and Cannon are partners. Able gets 70 percent of the
profits and losses and has a capital balance of $100,000. Baker gets 20
percent of the profits and losses and has a capital balance of $60,000.
Cannon gets 10 percent of the profits and losses and has a capital
balance of $10,000. The partnership has $170,000 in assets but no
liabilities. The partnership is being liquidated. Assets of $70,000
are sold for $40,000 in cash. Which of the partners gets this
available cash?
A - Able gets $28,000, Baker gets $8,000, and Cannon gets $4,000
B - Able gets $13,333, Baker gets $13,333, and Cannon gets $13,334
C - Able gets $6,667 and Baker gets $33,333
D - Able gets $20,000 and Baker gets $20,000
Answer is C
The actual sale of these assets created a $30,000 loss ($70,000 less
$40,000). That loss is assigned 70 percent to Able ($21,000
bringing the capital down to $79,000), 20 percent to Baker ($6,000
bringing the capital down to $54,000), and 10 percent to Cannon ($3,000
bringing the capital down to $7,000). To decide what to do with the
available cash, the partnership must assume that the remaining $100,000
in assets ($170,000 less $70,000) are a total loss. In that case, this
$100,000 anticipated loss is assigned 70 percent to Able ($70,000
bringing the capital down to $9,000), 20 percent to Baker ($20,000
bringing the capital down to $34,000), and 10 percent to Cannon ($10,000
bringing the capital down to a negative $3,000). Then, finally, the
remaining negative $3,000 balance in Cannon's capital must be divided
between Able and Baker based on their relative profit and loss ratios or
70/90 of the $3,000 to Able or $2,333 and 20/90 of the $3,000 to Baker
or $667. This
final allocation reduces Able's capital from $9,000 to $6,667 and
Baker's capital from $34,000 to $33,333. That is how the available cash
is distributed.
And, now a final quote from Thomas Jefferson that really does, in my
mind, apply to all of you folks taking the CPA Exam in the final few
days of August:
"Nothing gives one person so much advantage over another as to remain
always cool and unruffled under all circumstances."
Joe Hoyle
Co-Founder
CPA Review for FREE
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