Go further when everyone expects you to give up

May 19, 2010

CPA Review for FREE
www.CPAreviewforFREE.com

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

98 Weeks of Operation and 11,841,449 Page Views (without a penny spent
on marketing)

Lesson 70

From: Joe


(a) - I know you have heard this before but I am always thrilled to say
it: last week was the busiest week in the history of
www.CPAreviewforFREE.com. The number of individuals who used CPA
Review for FREE was 13.7 percent higher than in any previous week in our
history. Our goal is to have 100 percent (not 98 or 99 but 100
percent) of the people who take the CPA Exam use our website. And, why
not? We have high quality questions and answers available for free.
I'm surprised that we don't have 100 percent already. There must be a
few candidates out there who simply do not fully grasp the concept of
FREE.


(b) - You can help. We get a zillion emails thanking us for our
website and we love getting each one. Brightens up my day every time.
However, you can help us in one very easy way: forward this email to
anyone whom you know who is thinking about taking the CPA Exam. The
message is a simple one: www.CPAreviewforFREE.com has 2,100 excellent
questions and answers covering the entire CPA Exam and they are all
available for free. The person you forward this to may well write back
and thank you profusely. The only candidates who don't use
www.CPAreviewforFREE.com are the ones who do not yet know that it is
available.


(c) - I posted the following message on our Facebook page yesterday. I
am always looking for questions that you can work in order to add
points. These are for Auditing and Attestation candidates. In
fact, I took one of these questions and adapted it below in our practice
section.

"CPA Exam candidates are always looking for more, good questions to
practice on and learn from. The March 2010, Journal of Accountancy has
10 excellent internal control questions and answers. That's a tough
topic for every candidate and these looked good. You can find them at
www.journalofaccountancy.com/Issues/2010/Mar/20092240. They are free and
you can add points - what more can you ask for?"


(1) - A friend of mine at the University of Richmond and I were chatting
last week about Mother Theresa and how she was able to accomplish so
much in her lifetime. She was in a situation where you would have
expected her to get little or nothing done but yet she practically moved
the entire world. And, she did it day after day over a long and
glorious lifetime. We complain about the difficulty of studying for a
few hours each day for a few months so we can pass an exam. She worked
tirelessly for decades to eradicate poverty, hunger, and disease.

The friend later shared with me this quote from Mother Theresa:

"Beyond any success there is another obstacle.
As long as you're alive, feel alive!
If you miss what you used to do, do it again.
Do not get lost in photos yellowed with time.
Go further when everyone expects you to give up.
Do not let your strength erode.
Instead of pity, demand respect.
When you cannot run any more, sprint.
When you can't sprint, walk.
When you can't walk, use a cane.
Most important thing is to never stop!"

I like all of this but especially the line "Go further when everyone
expects you to give up." I sometimes think we have become a
generation that is always quitting so we can go look for something more
interesting to do. We get so busy trying to do everything that is
fun in life that we have no time to do anything that requires real
effort and a sense of accomplishment. You must decide what you really
want to accomplish and then you must fight to do that and not let
yourself get distracted.

Once you make a decision as to what you want to do with your life, you
cannot let tiredness or distractions turn you aside.

When I talk with candidates about the CPA Exam, my first question is
always: "How seriously do you want to pass? Is this just a silly
fantasy or do you seriously want to pass?" And the answers are always
impressive "I would give my right arm to pass the CPA exam." "I want
this more than life itself." "I have dreamed about this for years."

And, then, very quickly, some of them get so easily discouraged. "I
missed a few questions and I want to give up." "I failed when I took
the first part so I quit." "I cannot seem to understand leases and
I'm just not capable of ever learning this stuff."

Or, some of them get so easily distracted. "I couldn't miss my
favorite television program." "I had to continue playing on my local
soccer team." "I couldn't stop my dance class." "I just couldn't
quit drinking beer on Friday and Saturday nights."

I once had a friend tell me: the reason we are not more successful is
that we let short term fun keep us from our long-term ambitions.

I cannot promise you success but no one promised Mother Theresa success.
I cannot promise you that it will be easy but no one promised Mother
Theresa that it would be easy.
I cannot promise you that there won't be setbacks along the way but no
one promised Mother Theresa that there would not be setbacks.

But I can promise you that no one ever succeeded at something like the
CPA Exam if they let themselves get easily discouraged or distracted.
The race does not go to the speedy; the race goes to the one who is
persistent and keeps running.


(2) - Always remember that you have the right to unsubscribe from these
free email lessons. To do so, just scroll to the bottom and click on
the link that indicates "unsubscribe." Love having you; please stay as
long as you wish. But you can remove your name at any time you want.


(3) - Last year, at about this time, I was asked to give a speech. I
was told that I could talk about anything I wanted. Always an
interesting quandary - talk about whatever you wish? I thought long
and hard about what I really wanted to say to the audience and I finally
decided to talk about a quote that I liked from the legendary basketball
player, Michael Jordan: "If you run into a wall, don't turn around and
give up. Figure out how to climb it, go through it, or work around it."

The point I wanted to make to those listening was that this is what life
is all about. You run into a wall and you have a choice. You can
give up and go home or you can work to figure out how to keep pushing
forward. We all face walls in our lives. What we are, what we
become, how we live our lives depends on what we do after we hit one of
those walls.

I know lots of people who hit walls and just lie down and quit. The
wall doesn't have to be too big or too strong. If they hit a wall, that
does them in. They are just overwhelmed by the walls they face in
life. To me, that is so sad because it is the walls that provide the
challenges that make life interesting.

Other people never fuss; they spend their time getting around those
walls. Sometimes over, sometimes around, sometimes through, sometimes
under. There are different ways to get around walls. If one doesn't
work, try another. You can let the walls of life defeat you or you
can look at them as a puzzle to be solved. "I want to move past this
problem. What is the easiest, best, and most efficient method of
continuing to make progress so that I could move forward toward my
goal?"

As you study for the CPA Exam, there are going to be countless walls.
That's life. Your job requires a lot of hours. Your kids have soccer
practice to attend. Your mother-in-law is coming to live with you. I
could list thousands of walls. Some people will just look at those
walls and quit. Hang their heads in defeat. Others will step back and
work to get their minds around the problem: "surely, I can figure this
out so that I can keep heading toward my goal."

You will not find one single successful person in this life who has not
had to get beyond some very high walls. When next a wall pops up in
front of you, I want you to be the person who takes up the challenge and
slams right through (or over or under or around) that wall.

(If you want to see the actual speech that I gave about those walls, you
can watch it at www.youtube.com/watch?v=LjwHxVbZq1o However, you might
want to skip the opening 10 minutes of introduction.)


(4) - A little practice. Someone wrote in and asked if getting 80
percent of the questions right was good. My answer is that this is not
important. The important thing is to always be adding points. Don't
spend two seconds of your time worrying about where you are at. Spend
100 percent of your time figuring out how to add points, one at a time
because, inevitably, you'll get to 75.

Become obsessed about adding points.


Auditing and Attestation

A CPA firm is beginning the audit of Panasian Corporation. One of the
staff auditors has been assigned to gain and then document her
understanding of the internal controls designed to be in place in the
company's payroll system. At the end of the day, the staff
auditor has created a series of flowcharts, questionnaires, and
narrative descriptions based on the understanding she has obtained.
Which of the following is correct?
A. The questionnaire approach is preferred.
B. The flowchart approach is preferred.
C. She was correct in using all three of these techniques to
fulfill this assignment.
D. She only needed to use one of these techniques.


Answer is D.

The auditor's goal was to establish her understanding of the design of
the controls that were supposed to be in place in this payroll system.
All three of these techniques (questionnaire, flowchart, or narrative)
can accomplish this purpose successfully. Therefore, only one is
necessary although sometimes the techniques are grouped together if the
system is particularly complex.


Financial Accounting

The Walmsley Corporation spent $320,000 on rent during the current year.
However, the company's accountant realized that prepaid rent which was
$17,000 on the first day of the year was $25,000 on the last day. In
addition, in connection with another rental property, rent payable was
$19,000 on the first day of the year but had dropped to $5,000 by the
last day. If the company wants to report rent expense according
to accrual accounting, what amount should be recognized?
A. $298,000
B. $314,000
C. $326,000
D. $342,000


Answer is A

The easiest way to switch a cash number of an accrual accounting number
is to make a single journal entry for the entire year. Here, during
that period, cash went down $320,000 (a credit), the asset prepaid rent
went up $8,000 (a debit) and the liability rent payable went down
$14,000 (another debit). To make this entry balance, you need a
$298,000 debit ($320,000 less $8,000 and $14,000). That missing
balancing figure is the rent expense to be recognized according to
accrual accounting.


Regulation

Jack Biggerstaff files his Year One federal income tax return on March
9, Year Two. Sometime later, he realizes that he accidentally omitted
a large charitable contribution and he wants to file an amended return
to increase his itemized deductions. When must he file this return in
order for it to be acceptable?
A. Before April 16, Year Two.
B. Before January 1, Year Three
C. Before March 10, Year Five
D. Before April 16, Year Five


Answer is D

An individual must file an amended income tax return by three years from
the due date of the return. The Year One return is due on April 15,
Year Two so the amended return must be filed before April 16, Year Five
to meet this three-year deadline. However, if the taxpayer filed the
original return after the due date (with an extension, for example), the
term is three years from the date of filing.


BEC

What is the acid-test ratio?
A. Total liabilities divided by total equity
B. Cash, accounts receivable, and short-term investments
divided by current liabilities
C. Cash divided by liabilities due within 60 days.
D. Cash divided by liabilities due within 90 days.

Answer is B

According to Investopedia, the acid-test ratio is: "A stringent test
that indicates whether a firm has enough short-term assets to cover its
immediate liabilities without selling inventory." It is determined by
taking cash, accounts receivable, and short-term investments and divided
that total by the amount of the company's current liabilities.



The most important thing is to never stop!



Joe Hoyle
Co-Founder
CPAreviewforFREE