The Possibility of Having a Dream Come True

The Possibility of Having a Dream Come True

70 Weeks of Operation and 6,681,873 Page Views (without a penny spent on marketing)

Lesson 52

From: Joe

(1) – We crossed 6.6 million page views this past week and we are nearing our first major goal of averaging 100,000 page views per week. Considering that we had 1,920 page views in our first week of operation (and that we have spent absolutely nothing to date on marketing), that is quite a growth curve. Thanks for your continued help. We may not always say it but we always think it and hope you know how much we appreciate your willingness to aid our growth by passing along information about our site.


(2) – Our survey question last week was: What percentage of the multiple-choice questions on each part of the CPA Exam are actually graded and included in arriving at a grade? The survey results showed:
--80 percent – chosen by 36 percent of the respondents
--90 percent – chosen by 27 percent of the respondents
--75 percent – chosen by 21 percent of the respondents
--100 percent – chosen by 15 percent of the respondents

Good job: The answer is 80 percent. On all four of the sections, 20 percent of the multiple-choice questions are included solely so that the examiners can determine if they are statistically valid. If they prove to be valid, they will later be entered into the exam for real. But, at first, they are just being tested for future use. And, no, you cannot tell which ones count and which ones do not count.

However, I always tell candidates (and I think it is frequently true) that if you get a few questions that seem rather bizarre, they are probably the ones being tested so do not get too upset if you don’t know the answers. Those do not affect your grade.

Our next survey on the CPA Exam is in the upper left hand corner of this page.
Read it and give us your best guess for the answer. The more you know about the CPA Exam, the better off you are.


(3) – Always enjoy passing along emails that I get from our “customers” (is a person a customer if they don’t have to pay anything?):

FROM AE: Your efforts have been a great help to me! I have used your website along with a big name review course to help me pass the other three sections and plan to use it to help me prepare for FAR. And by-the-way, you're right about there not being many out there who are willing to truly help others pass the CPA exam. Rather there are many out there who are willing to take our money and then they want more if we're unable to complete their course in the allotted time...very frustrating!! Also, thank you for the encouraging e-mails. They have helped keep me going!


(4) – And, always remember: if you want to unsubscribe, it is easy. Go to the end of the email lesson and there is always a link that will allow you to unsubscribe.


(5) – I was talking with one of my students yesterday about a book she had read. She mentioned one of her favorite quotes from the book: “It’s the possibility of having a dream come true that makes life interesting.”

A lot of people talk with me about the CPA Exam. They always tend to ask the same questions:
--“What good is this going to do me?”
--“What if I fail?”
--“Is it really as much work as I’ve heard?”
--“How will I ever find time to do the studying?”

Those are very important questions and I always try to answer them as best as I can. But, they all miss a very essential point. Life is just more interesting if you are doing things that push you to be better. Life is more fun if you are willing to take up challenges. Life is more exciting if you risk a little bit. Life is just better all around if you have dreams that are pushing you forward. Even alone those are great reasons for taking the CPA Exam.

I know a lot of people who live wonderfully ho-hum lives.
--They never take any risks so they never have to worry about failure.
--They never try to squeeze in any adventure but, at the end of the day, their grass is mown and the dishes are washed.

Is that what you live for: mown grass and washed dishes? Is that what will be carved on your tombstone: “the grass was always mown; the dishes were always clean.”

Surely, there is more excitement to life than avoiding challenges. Surely, there is more fun than getting your bills paid at the same time every week.

You need a dream!! Yes, YOU do. Something that, when things get really quiet, you can think about and get your blood pumping. The book the student read was right: It is the mere possibility of having a dream come true that makes life interesting. That possibility gives us a reason to get up in the morning and a reason not to give up when the going gets tough.

I know for a lot of you, passing the CPA Exam is your current dream. You’ve probably heard about the CPA Exam since you were a sophomore in college and you’ve always wondered whether you could do the work necessary to pass.

It is a great time to start turning that dream into a reality.

It is time for the possibility of that dream to help make your life interesting again.

And, you cannot even use the old excuse: “I simply cannot afford to take a review course.” Yeah, up until 70 weeks ago, that was a genuine excuse. CPA Exam review courses have always been expensive (and often poorly organized and taught). They often provided more of an obstacle than a help.

Now, of course, www.CPAreviewforFREE.com offers you 2,100 great questions and well written answers. Hundreds of folks, just like you, have passed this way. So, can you.

It is time to stop making excuses. Excuses are easy. Excuses are cheap. It’s time to put away those excuses and shoot for a real dream. It is time to make life interesting again.

I know it will be hard work but you can do it. And, we are delighted to be here to help.


(6) – Speaking of former students, I joined Facebook some months ago. To date, I have not sent out any messages of my own but I do get to keep up with some of my former students. Yesterday (yeah, yesterday was a busy day for me), one of my former students posted the following quote from Booker T. Washington: “Success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome.”

It seems to me that we spend too much worrying about whether we have achieved success. Oh sure, I guess we would all like to be someone like Bill Gates and have billions upon billions of dollars. But, at the end of the day, you should judge yourself by how far you have come and the obstacles you have conquered.

If there were no problems in life, success would be easy. But, in truth, there are problems. Some problems are minor and easy to get beyond but a lot of problems are truly serious and provide a real mountain for us to climb.

I have had students make 99. I have been pleased for them but they were often very bright people with a great education. I’m still pleased but those are not my favorite “success stories.”

I have also had students who have worked even harder and made just 75 but I was even more pleased for them because I knew the obstacles they had to overcome.

--I have seen people battle through sickness to take the CPA Exam.
--I have seen people have emergency appendectomies a few days before the exam and still pass.
--I have had people who were fired from their jobs two days before the exam and still managed to get back up and go in there and do well.
--I have had people whose spouses have left them right before the exam but who fought back and still took it and did fine.
--I have had people who have dealt with the death of a loved one right before the exam and still went in and gave it their best shots.
--I have had people have car wrecks on the way to the exam but still managed to get there and make 75s.

There are obstacles out there – you have to be ready to push through them.

Yeah, life can really throw obstacles at you. Win, lose, or draw, I’m always most proud of those people who don’t let those obstacles defeat them. They fought back despite overwhelming problems.

Those are the real winners. Those are the people that I really respect.


(7) – As always, time for a bit of practice. And, as usual, my FAR question comes from my intermediate accounting II course for tomorrow.

FAR

A company has a defined benefit pension plan with a projected benefit obligation of $4 million. On January 1, Year One, the plan is amended so that employees can begin to draw benefits at the age of 63 instead of 65. As a result, the projected benefit obligation goes up from $4 million to $4.7 million. The $700,000 jump is referred to as a prior service cost. Which of the following is true about the reporting of the prior service cost?

A – It is expensed immediately.
B – It is never expensed unless it becomes bigger than 10 percent of the projected benefit obligation.
C – It is placed into stockholders’ equity on January 1, Year One, and then systemically moved into pension expense over time.
D – The prior service cost is either recorded as a prior period adjustment or is charged to expense immediately depending on the type of change.


Answer is C

There is no immediate expense effect that comes from a prior service cost. Instead, the entire $700,000 is recorded within “accumulated other comprehensive income” which is a category within stockholders’ equity on the balance sheet. Over time, this amount is moved systematically from stockholders’ equity to pension expense which is reported on the income statement.


BEC

Dr. Jekyl and Dr. Kildare are two dentists who run a practice together as partners. Dr. Jekyl invested $300,000 to start the business while Dr. Kildare only invested $100,000. Dr. Jekyl works 20 hours per week for the business whereas Dr. Kildare works 40 hours per week. Dr. Jekyl charges $80 per hour for his dental services while Dr. Kildare charges $120 per hour for her dental services. In the first year of operation, the business made a profit of $200,000. No agreement has been established as to the allocation of income to the partners. What is the most likely allocation?

A - $150,000 to Jekyl and $50,000 to Kildare
B - $100,000 to Jekyl and $100,000 to Kildare
C - $66,667 to Jekyl and $133,333 to Kildare
D - $80,000 to Jekyl and $120,000 to Kildare


Answer is B

Partners have every right to allocate income in any way they see fit. Such systems often involve capital investments, amount of work each period, or their level of expertise. However, if no agreement is made, everyone should be uncomfortable trying to guess at the intent of the parties involved. Therefore, without an agreement, income is allocated evenly between the partners. If there is an agreement as to profits but no mention of losses, the agreement used for profits is assumed to apply to losses.


Regulation

What form must most private not-for-profit organizations file annually with the federal government as a result of their tax-exempt status?

A – Form 1065
B – Form 8-K
C – Form 990
D – Form 1120 NFP


Answer is C

The information form that a not-for-profit organization files with the government is the Form 990. A copy can be found at the following website to indicate the type of information that the organization must provide: www.irs.gov/pub/irs-pdf/f990.pdf


Auditing & Attestation

Which of the following sentences is found in the opening paragraph of an unqualified audit report?

A – An audit includes examining on a test basis evidence supporting the amounts and disclosures in the financial statements.
B – These financial statements are the responsibility of the company’s management.
C – We believe that our audit provides a reasonable basis for our opinion.
D – An audit includes assessing the accounting principles used and significant estimates made by management.


Answer is B

The opening or introductory paragraph indicates which financial statements were audited and the general responsibility of the management (for the financial statements) and the independent auditors. The other three statements in this question come from the second (or scope) paragraph which seeks to describe the general idea of an audit so that the reader will be aware of the level of activity that has been performed.


Have a great week – if you are moving close to taking a part of the exam, then remember that your responsibility is to work each day to add one or two points. Keep your goals reasonable and that is, I believe, a very reasonable goal.

If you need a study break and want to see something that I found both beautiful and amazing, go to:

www.youtube.com/watch?v=518XP8prwZo

It won’t add any points to your CPA Exam score but I still think it is worth 8 minutes and 33 seconds of your time.