Thursday, April 8, 2010

Keep Pushing

Try us FIRST before you spend your hard-earned money.

April 7, 2010

CPA Review for FREE
www.CPAreviewforFREE.com

2,100 FREE CPA Review Questions and Answers Available for YOU

92 Weeks of Operation and 10,393,997 Page Views (without a penny spent on marketing)

Lesson 67

From: Joe


(a) – We are always delighted to welcome accountants from around the world to our website. We have 2,100 questions and answers available and they are free to anyone and everyone around the world. Look at a map and find Richmond, Virginia, and that is where they came from. Last week (for the countries outside of the US), we got the most visitors from South Korea, Canada, Philippines, India, and Japan in that order. Interestingly, if you take the top ten countries and simply rank them by how long the average person works on our site, the top four are Egypt, Jamaica, United States, and Canada. The average visitor from Egypt stays on the site for 28:10 minutes which barely edges out Jamaica (27:12 minutes).

Welcome to all!!!!


(b) – If you would like to read my new Financial Accounting textbook, the online version is absolutely free (great price).

Go to www.flatworldknowledge.com
Click on “Catalogue”
Click on “Business and Economics”
Click on “Financial Accounting”

And you are ready to read any and all of the 17 chapters.


(1) – Nice notes, recently received:

From HN: Thank you so much for providing us with thousands of free CPA exam questions!!!!! Your questions and explanations rock and are much better than those generic questions from the big name pricey review courses. I just wanted to let you know I have passed BEC (78) and FAR (81) by using your website. I work full time so I found myself having a hard time studying after a long day of work. CPAReviewForFree works very well for me. It makes my study easier, more interesting and more productive. All I need to do is to login and start answering questions. Just like you said, the goal is to add points. I love it!!! I am going to take REG and AUD. For some reason I am a little bit worry about passing auditing... I guess we will find out in a few months. I just wanted to share my happiness with you.


From OO: I just found out I have passed the CPA exam. I don't believe I could have passed Audit, BEC and my nemesis FAR without the questions from your website. I purchased the questions so that I could review them when I wasn't at my computer.


From JD: Please accept my biggest THANK YOU. I have cleared my third section of CPA - REG. I got my result today and it was great. The First Thanks goes to you who has given me inner strength and motivation to study and shown me how to plan my study so that I can achieve my desired goal. The Second Thanks goes for the very helpful questions and answers which provide an in-depth knowledge of the required subject and relieves our tension about not getting passing marks in the toughest exams. I regularly read your emails and thoroughly do all your questions. I passed my first three exams - BEC, FAR, and REG. The fourth and remaining is AUDIT which I am planning in May 2010. Your regular emails really help me pass.


(2) – I was out of town this past week-end. I went to a religious service with members of my family. The speaker was excellent. Toward the end of his remarks, he called out in a loud voice: “be full of hope; be full of joy.” I loved the feeling.

So, not surprisingly, I sat there thinking what I would call out to all of you guys who get these email lessons. What would I exhort you to do if I could stand in front of you?

--Be full of confidence!!! (It is hard to be great if you don’t believe in yourself.)
--Be full of courage!!! (Times are not always great. It is so easy when life goes well. It is much more difficult to push forward when things are not going great.
--Be full of compassion!!! (Humans [and I include myself in this] can be very self-centered. One of the hardest things in life is to feel the pain that others feel.)
--Be full of energy!!! (I think most energy is just a state of mind. If you think tired, you will be tired. If you think energized, you will be energized.)
--Be full of assistance!!! (Take time every day to help others – it is always a sad day if you do not help another person.)
--Be full of perseverance!!! (In life, the race usually goes to the guy who keeps pushing; the guy who won’t give up; the guy who stays on course until the job gets done.)
--Be full of calmness!!! (We live in a hyperactive world but it is hard to do well if you are constantly running around mentally and physically.)
--Be full of knowledge!!! (You need to know yourself and know what you really want in life. I believe that one of the things that can hold us back in life is that we don’t know what we really want and then we do not understand why we don’t push forward more aggressively. You’ve got to really want something deeply before you have the courage and energy to go get it. Know what you truly want in life.)
--Be full of friendship!!! (We all gain energy from being a friend. However, you’ve got to be brave enough to go find those friends. They don’t necessarily come looking for you.)

Yeah – there are a lot of things you can be. But it is very easy to get into a rut and have a life full of nothing but television and beer. That may sound good in a television commercial but it really is lacking in true satisfaction. Don’t let that happen to you – kick yourself out of the rut. Figure out what you want and then go get it!!


(3) – You are always allowed to unsubscribe from these email lessons at any time you wish. I typically send out a new lesson every 7-14 days. If you want to continue to get them, that is great. We love having you. However, if you ever want to unsubscribe, just scroll to the bottom of any lesson and click on the unsubscribe button.


(4) – Like everyone else on the planet, I get a lot of email stuff forwarded to me. 99.9 percent of it I delete. Just not interested and don’t have the time to think about it. However, this morning a friend from Chicago sent me a little essay from a woman who has a family but also is a long-distance runner. She was talking about pushing herself to train. For some reason, I actually read the essay and there were a couple of paragraphs that really spoke to me. I loved the way she was able to change her own way of thinking. That is something I think you and I can both do. Our attitude is not carved in stone. We do have the ability to change the way we look at life and that is what she did.

Here are the two paragraphs that made me stop and think.
“I was chugging up a hill saying to myself, I have to get up this hill. I have to finish this workout. And then all of a sudden, a few people came to mind, some sick, others struggling, and I thought about how much they would love to have the opportunity to tackle this hill. I bet they wouldn't think they had to. In the clarity of thinking that comes with adversity, they would likely say they got to run up this hill. I wondered what might happen if I started to think that way.

“I decided to try it. Instead of thinking or saying, ‘I have to finish this project’ or ‘I have to pick up my kids,’ I stopped myself and tweaked my language: I get to work on this assignment. I get to pick up my children from school. I get to help them with homework. I get to buy groceries and make dinner for my family. I get to do speed work. I get to take Luke to football practice. . . . At first it felt forced and silly, but after a few days, it became natural. I felt freer, more thoughtful, and more aware of why I do what I do. Perhaps I had become so encumbered with my to-dos that I forgot to be thankful for the opportunity to do them. I realized that it's possible to have a reawakening about the beauty in our lives, to understand that we are so damn lucky to be healthy, to have people to love and the ability to care for them.”

My favorite line in all of this is “Perhaps I had become so encumbered with my to-dos that I forgot to be thankful for the opportunity to do them.” Isn’t that easy for all of us to do? It is just easier to whine and moan than to feel grateful for what we are able to do and accomplish.

So, the next time you are fussing about the fact that you “have to study for the CPA Exam” do realize that there are a lot of people in this world that would view that as a privilege, a wonderful opportunity, a great chance to prove themselves. Maybe you can work on your own vocabulary a bit. Doesn’t it feel just a little bit better to say that you “get the chance to study for the CPA Exam” or that you “have the opportunity of studying for the CPA Exam.”

If you are going to do the work anyway, why be a negative person about it? Why not view it as a real chance to show what you can do? Make it seem as positive as possible.

If you view studying as a negative, it will become a real negative.
Don’t let that happen.


(5) – Practice Practice Practice

You “get the chance” to add some points


FAR

A company has a defined benefit pension plan that has a service cost for the current year of $110,000, funding of $90,000, interest on the projected benefit obligation of $50,000, and earnings on the plan assets of $30,000. In addition, a contractual provision was changed at the beginning of the year and the resulting prior service cost was $80,000 because the projected benefit obligation increased. Amortization of that prior service cost was $20,000 for this year. What amount of pension expense should be reported for the year?

A - $70,000
B - $150,000
C - $230,000
D - $240,000


Answer is B

Pension expense is made up of components. There are usually three but can be as many as five. Here there are four. Service cost ($110,000) and interest on the projected benefit obligation ($50,000) make the expense go up. The earnings on plan assets ($30,000) makes the expense go down. Amortization of the prior service cost ($20,000) makes the expense go up if the prior service cost is a loss and makes it go down if the prior service cost is a gain. Here, the projected benefit obligation increased so the prior service cost is a loss. Thus, the expense is $110,000 + $50,000 - $30,000 + $20,000 or $150,000. The fifth component is the amortization of any net gain or net loss and there are no gains or losses mentioned here. Funding and the change created by the prior service cost do not impact the pension expense.


Regulation

On a corporate income tax return, Schedule M-1 and Schedule M-2 must be completed. What is the purpose of these two schedules?

A – Schedule M-1 reports the composition of gross profit and Schedule M-2 reports the distribution of dividends.
B – Schedule M-1 reconciles book income to taxable income and Schedule M-2 reconciles beginning retained earnings to ending retained earnings.
C – Schedule M-1 reconciles income inside of the US with income outside of the US and Schedule M-2 reconciles taxable income to nontaxable income.
D – Schedule M-1 reports payments to the members of the board of directors and Schedule M-2 reports payments to independent contractors not viewed as employees.


Answer B

Schedule M-1 is used to show how a company reconciles the net income that it reports to the public with the taxable income reported to the IRS. Schedule M-2 reports the net income, dividends, and prior period adjustments that has allowed the company to move its beginning retained earnings balance to the ending figure.


BEC

A company buys product XR43 for $3.20 per pound although the standard price is only $3.05 per pound. The company uses this product to manufacture widgets. It is supposed to take two pounds of XR43 to produce a widget. The company created 5,000 widgets this year and the material usage variance was $1,220 unfavorable. How many pounds of product XR43 did the company actually use this year?

A – 10,200
B – 10,400
C – 10,500
D – 10,600


Answer is B

The company should have used 10,000 pounds of XR43 (5,000 widgets times two pounds of material for each one produced). The usage variance is unfavorable indicating that additional pounds were used. A usage variance is measured at the standard price so that no price variance is included. The $1,220 variance was based on a standard price of $3.05 per pound. That indicates 400 extra pounds were used ($1,220 variance/$3.05 standard price per pound). The extra amount means that 10,400 pounds rather than the standard of 10,000 were used in making widgets. That extra amount created the variance that was reported by the company.


Auditing

In auditing, what is known as the “yellow book?”

A – Standards of attestation engagements issued by the AICPA.
B – Generally accepted government auditing standards issued by the Comptroller General of the US
C – Professional and ethical standards for audit engagements issued by the Securities and Exchange Commission.
D – Federal securities regulations issued by the American Bar Association.


Answer is B

The website of the Government Accountability Office (GAO), in discussing the “yellow book,” makes the following statement: “on July 27, 2007, the Comptroller General of the United States issued the 2007 revision of Government Auditing Standards, which supersedes the 2003 revision and updates the January 2007 revision. The July 2007 version contains the January 2007 revision to the standards and updates the quality control and peer review sections in chapter 3.”


Be full of hope!!!!
Be full of joy!!!!

Joe Hoyle
President

www.CPAreviewforFREE.com