Over 2,100 FREE CPA Review Questions and Answers Available for YOU
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Lesson 86
From: Joe
(1) – Happy Holidays to each and every one of you from all of us here at CPAreviewforFREE. I hope 2010 has been great for you and that 2011 will be even better. You only live once – make it a life of joy with a willingness to help others.
One of our proudest accomplishments here at www.CPAreviewforFREE.com is that we have visitors to our site from all over the world. Last week alone, visitors from 97 different countries used our site to add points to their CPA Exam scores. Isn’t that neat! I know the world is just full of bad news where people cannot seem to get along but, at CPAreviewforFREE, we want to do our part to help all people, all the way around the globe.
Last week, as always, a majority of our traffic came from the US but the next biggest locations outside of the US were Canada, United Arab Emirates, India, Japan, and Philippines. We love being able to touch so many people in so many places.
Welcome to all of you wherever you may live!!!!!
**
And, we just passed two milestones this week: 20 million page views since we first started and 12 million page views in 2010 alone. I only have one thing to say: WOW!!!
(2) – As I mentioned in my last email, we are working feverishly to adapt our site to the January 2011 CPA Exam. If you want to see what is going to be on the new exam, go to www.cpa-exam.org and click on “CSOs/SSOs effective January 1, 2011.”
In the last few days, we have
--added Business Structures (Corporations, Partnerships, and LLCs) to our Regulation subscription service.
--added International Financial Reporting Standards (IFRS) to our FAR subscription service.
--added SEC material and accounting for trusts to our FAR subscription service.
--updated our subscription study guide for FAR and Regulation (remember, each subscription service is only $15 per month).
--got ready to expand the number of task-based simulations that are available in our subscription service.
--started finishing up the subscription services for BEC and Auditing.
(3) – As always, I am delighted to get emails from so many of you. Thanks for writing.
From WBS: “I wanted to say a HUGE thanks for all of your support. I used your materials to pass both FAR and REG, and I am now DONE with the exam! Initially, I was using CPA Review for Free as a supplement to the "expensive review course". As I became familiar with your format, it did not take long before your materials became my primary source of study. I graduated with my accounting degree in 1999, so, needless to say, I felt like I was way behind the power curve in preparing for the exam. Your materials provided a great pathway for an old guy like me to gain the confidence I needed to pass the exam. You are providing a great service, and I wanted to be sure to let you know of my deep gratitude for your tireless efforts to help us all succeed. I am referring as many people as possible to your website.”
From NI: “After 6 years of trying to pass the CPA exam, I am so happy to let you know that I have completed the exam. It seems like yesterday when I wrote my goal out for 2010. My main professional goal was to pass the CPA exam by the end of 2010. I promised to study 1 1/2 hours every day except Sundays and do as much of your multiple choice questions as I could. Thank you so much for all your encouraging emails and believing in me. You are such a great teacher, motivator and a fabulous person. Thank you for always picking me up and letting me know that I could always make it better the next day. I praise God for your gifts and please keep being the light that you are. Nothing beats hard work, a positive attitude while studying and your encouraging emails. Thank you, Thanks you and Thank you. This has been the best Christmas Gift for me and my family.”
From NJ: “Hi Joe! I don't know if you may remember me but I emailed you once regarding a question on equivalent units in BEC. I just wanted to say that I just saw my score and passed BEC on my first attempt! All the practice questions you offered on your website were incontrovertibly the best practice aides!! Thank you so much for continually pushing so many of us with your cheerful emails I absolutely love reading them! Happy holidays and onto the next stage now!”
From GH: “I have just registered on your cpa review for free website. What a great way to keep being a "good samaritan". I enjoyed your "last lecture" on YouTube - it was the best hour I've spent in a long time. Also, I have your text book on advanced accounting (9e). I never made the connection until tonight. I am a 50 year old studying for the CPA. I am in my own transition. God Bless you for your inspiration.”
From RK: “Good morning Joe! I just received my advisory score for REG and I passed with an 86%! Thank you so much for all your help! The study tips, the free questions, the encouragement - all that you do has been wonderful. Thank you, thank you! I have now passed all 4 parts. It's a great Christmas present!”
(4) – One day recently, Good Morning America, which is a television show on one of the major networks, challenged its viewers to come up with three words that conveyed a message about themselves. I thought that was a fascinating exercise – what three words would you use to describe your feelings/personality?
I stopped and did some reflection – what three words best describe Joe Hoyle?
It is not a bad exercise – can you boil down who you are to just three words, three words that really capture the very essence of being you.
For me, it was “Make It Happen.” I must admit that I love that phrase and what it conveys.
--To an extent, it reminds me that what we accomplish, what we become in life, is up to us. We are not pawns in the hands of fate but we are capable of creating our own destiny. Going back to my favorite lines from Shakespeare: “The fault, dear Brutus, is not in our stars, But in ourselves, that we are underlings.”
--Being willing to work hard is more important than money or talent or smarts or family connections or anything else. Yeah, there is always some limit to what you can accomplish purely by yourself. But there is not much of a limit. If you truly know what you want, you have the ability to make it happen.
What three words would you use to describe yourself?
“Gave Up, Quit”
“Needed A Nap”
“Everyone’s Against Me”
“Television’s More Important”
“Never Had Time”
“Will Work Tomorrow”
“Everything Distracts Me”
Some of these are funny but the truth is that we all know people who seem to have such mottos.
What was YOUR 3-word motto for 2010?
More importantly
What is going to be YOUR 3 word motto for 2011?
There is not much we can still do about 2010 but there are a million things you can accomplish in 2011.
Make It Happen!!!
PS – I challenged our friends on our Facebook page to give me their three word motto for 2011 – I’d love to hear yours if you are on Facebook.
(5) – We have to say the following legally: You can always unsubscribe from these email lessons that I write and mail out about every 7-14 days. Just scroll to the bottom of this email (or any email from us) and click on the link and you’ll immediately be removed. Cross my heart.
Now, we don’t have to say the following legally: We are delighted to have you with us. Please feel free to stay on as long as you like. Don’t hesitate to tell your friends and neighbors. Mention us to strangers you meet on the street. Leave anonymous notes in people’s mailboxes to tell them to subscribe. Since we spend nothing for advertising, we are like Blanche DuBois in A Street Car Named Desire in that we “always depend on the kindness of strangers.” Thanks for helping us spread the word.
(6) – We always get a lot of nice compliments around here about being Good Samaritans but you can be one too. Don’t leave that work up to us. Over this holiday season, make it a special point to be a Good Samaritan at least one time. Think how much better the world would be if we all did that just one time in the new few weeks.
A few days ago, my wife and elder daughter went through the drive-in at the local Arby’s to get a couple of sandwiches for their lunch. When they pulled up to the window to pay, they were informed that the person in the previous car (who had now driven away) had paid for their meal as a Christmas gesture. It was a neat gift from one anonymous person to another. Yeah, it cost a few bucks but it really made my wife smile. It was the essence of a pure gift with nothing expected in return. And, my wife will never know who the person was. Just some stranger who wanted to make her day better.
You don’t have to buy someone’s lunch but such gestures are what makes us all proud to be human beings. Don’t leave it to someone else – YOU do it.
(7) – In studying for the CPA Exam, it is always easy to get discouraged. There are many study days when you just miss an awful lot of questions. It is easy to feel lost and hopeless. Sometimes it feels like you are so far behind that you are never going to catch up.
Okay, I don’t follow either of these teams but I do know that the Eagles played the Giants in NFL football on Sunday. With 7 minutes and 30 seconds left in the game, the Giants were ahead by 31 to 10. I do know that in pro football being 21 points behind with 7 ½ minutes to play means that you might as well give up and start heading to the locker room. You just cannot score 21 points with that little time left. The game is lost so give up and quit and don’t get hurt.
Apparently, someone forgot to tell the Eagles because they managed to score four touchdowns in the last 7 ½ minutes and actually won the game by seven points. They scored 28 points in the final 7 ½ minutes. When all looked lost, they came back and won.
They could have folded their tents but they didn’t do that. All of a sudden things started turning their way and they began to make good things happen.
Too often, in studying for the CPA Exam, people get into a “I can’t possibly win this so I’m going to give up” mentality. They keep studying but the energy has drained completely out of them. They simply start expecting to lose.
When you expect to lose, it takes the edge off your work. No one ever puts out a 100 percent effort when they expect to get beaten.
I’m here to pass along yet another three word message – NEVER GIVE UP. There are times when things look bleak but no one gets anywhere in life by giving up. Some of the most exciting victories come when you get strong at the end and pull out a win that looked like a certain loss.
I know some of you have struggled with the CPA Exam in the past. But that was in the past. That was 2010. Forget about it. The exam you are going to see is the 2011 CPA Exam. There is no reason why you cannot pass the CPA Exam in 2011.
Keep Adding Points (yes, another 3 word message – they are everywhere).
As long as you keep adding points, you are going to get to 75 and you are going to pass that CPA Exam. Make it happen in 2011. Make this the year where you kick your career into high gear by passing the CPA Exam.
And, let us at www.CPAreviewforFREE.com help you in that quest.
(8) – Time to practice!!! Here are four questions – you should have one goal: when I see these questions again, I’ll be able to get them right.
FAR
Which of the following is filed with the SEC as an annual report to provide a comprehensive picture of a company’s performance, including aud¬ited financial statements?
A – Form 8-K
B – Form 10-K
C – Form 10-Q
D – Form S-1
Answer is B
The Form 8-K is filed with the SEC to provide information about material events that affect the company, such as mergers and acquisitions, changes in directors or CEO, other major changes in operations or status, changes in auditors, etc. The Form 10-K is the annual report filed with the SEC and includes sections such as a description of the business, risk factors, properties, legal proceedings, and submission of matters to a vote of security holders. The Form 10-Q is the quarterly report filed with the SEC. The Form S-1 is the common form filed in connection with the registration of new securities.
BEC
Wikipedia describes which of the following as “that element of a project that keeps it on-track, on-time and within budget?”
A – Project control
B – Project proposal management
C – Projection completion entitlement
D – Projection completion assurance (or PCA)
Answer is A
In the performance of a project, the ongoing comparison that measures actual progress to planned progress to serve as a control feature for every aspect of the job is known as project control.
Auditing and Attestation.
A CPA is auditing the financial statements of Yolandin Corporation. The CPA is concerned as to whether the accounts receivable being reported represent all of the amounts owed to the entity at the balance sheet date. Which of the following is the CPA most likely to perform to provide evidence about this concern?
A – Trace a sample of the balances reported as of the balance sheet date back to their source documentation.
B – Examine the list of receivables at the end of the year for especially large balances.
C – Examine the sales reported for the first few days of the subsequent period to ensure that each was recorded in the correct period.
D – Trace a sample of cash collections received prior to the end of the year to be sure that the proper balances were reduced.
Answer is C
The CPA is worried that some accounts receivable have been omitted at the balance sheet date so that the reported balance does not represent all of the amounts that are owed to the company. Answer A is a test of balances that have already been reported. Answer B is a test of balances that are reported. Answer D is a test to make sure balances have been properly removed. The only test that looks at the possible omission of accounts receivable is answer C. Sales reported shortly after the end of the year and recorded at that time might have actually taken place prior to the end of the year and were omitted from the reporting for that year. There are several reasons that might have taken place – often it is that the creation of the documents takes a few days to occur and be recorded so the event takes place in one year but is not recorded until the next.
Regulation
James and Madelyn Hogswealth discover an error in a previous year’s federal income tax return. They file an amended return and receive a refund of $1,933 plus an additional $17 as interest for a total amount of $1,950. In the year in which they receive this money, how does it impact their federal income tax return?
A – There is no impact on their current income tax return because the money related to an earlier year.
B - $17 increase in taxable income
C - $1,933 increase in taxable income
D - $1,950 increase in taxable income
Answer is B
Federal income taxes paid or received (as refunds) have no impact on a person’s federal taxable income. However, interest received on such a refund is viewed as taxable income and must be reported.
Stay warm.
Stay safe.
Do good work.
Joe Hoyle
President and Co-Founder
CPAreviewforFREE
Wednesday, December 22, 2010
Monday, December 6, 2010
Set a Goal and Make it Happen
Over 2,100 FREE CPA Review Questions and Answers Available for YOU
126 Weeks of Operation and 19,645,481 Page Views (without a penny spent on marketing)
Lesson 85
From: Joe
(a) – We should go over 20 million page views in the next few days – WOW!!!!
(1) – The 2010 CPA Exam is officially over and we are going to use the next few weeks to switch everything on our site over to the 2011 CPA Exam. Here are some of the changes we want you to notice.
--We have added a bunch of IFRS multiple-choice questions for FAR in our free question and answer database. Probably the 2011 change that has been the most talked about is the addition of some IFRS questions in FAR. We have tried to pick out the questions that we believe are most likely to be used to test IFRS. You can do those questions (right now) at www.CPAreviewforFREE.com.
--As I type, we are in the process of moving our free Business Structure questions and answers from BEC to REG. The examiners decided that those subject areas (corporations and partnerships) were better suited under Regulation.
--We have added a whole bunch of free Corporate Governance questions and answers to our BEC database. The examiners moved Business Structure to REG and replaced it in BEC with Corporate Governance. Those questions and answers are now ready to go.
--In our subscription services for FAR and REG, we have removed all of the old-style simulations and replaced them with brand new task-based simulation questions and answers. We will soon have 10 or so task-based simulations in each of the subscription areas. On the CPA Exam, instead of having two very long simulations that include both research and written communications, each part of the CPA Exam (except BEC) will have 6-7 shorter task-based simulations. Research will still be tested here but the written communications questions will all move to BEC.
--In our subscription services for FAR and REG, we have updated our study programs to incorporate the changes that are being made.
Okay, that is the progress at the moment. We have more to do and I’ll give you that information in my next email less.
Our goal is quite simple: we want to do whatever is necessary to be the biggest CPA Exam Review program in the country by the end of 2011.
(2) – That is our goal for 2011. What is your goal for 2011? Where do you want to be one year from today? As I sometimes tell my students, you don’t need a map if you don’t know where you want to go. Life doesn’t happen as you want it by chance. What would you like to accomplish over the next year?
Hopefully, one of your goals is to get the CPA Exam passed, done, and out of your life.
--Whether you went to a big school or a tiny one, that is a reasonable goal. It just takes work.
--Whether you made a 4.0 in college or just barely passed, that is still a reasonable goal. It just takes work.
--Whether you were the smartest student in your class or the one who just squeaked by, that is still a reasonable goal. It just takes work.
Success doesn’t come by accident.
How soon do you want to pass the CPA Exam? What is reasonable?
Which part do you want to pass next?
How much time is it going to take?
What study materials will you use (hopefully, www.CPAreviewforFREE.com)?
The country (and I suppose the world) seem to be in a rut right now. It needs more people like you to get up and start accomplishing something. The world doesn’t get stronger by having its best and brightest people sit around and whine about our problems. It gets stronger by doing. Figure out what you want to do over the next 365 days and get on with the journey. If you know where you want to go, you can make it happen.
(3) – As always, we love the mail we get.
From KS: Just received my final CPA exam grade--passed FAR with a score of 91. I used your pay content almost exclusively for preparation. I had the XXXX review series, but it was overkill, and the book was way too thick to possibly get through (since I am also working full-time, am married and have two children). So thanks! Your review materials are spot on and prepared me well. I will keep spreading the word about your site!
From JK: I just wanted to say thank you for all of the information on your site! I found out this week that I passed FAR with an 83 after studying with the subscription review slides and free questions on your site. It is such a great resource and I have been using the site instead of doing a review program. Many people at work are surprised when I say I'm not going to a review class, but I really believe that your site is helpful in passing the test. Thank you again.
From Z: Just wanted to let you know that I passed FAR!! Got my scores in today. I made exactly what was needed to pass, a 75. I wanted to take a moment of your time to thank you for your encouraging emails and suggestions. I applied several of your techniques. I actually wrote out on a piece of paper that “every question I do gets me closer to a 75” and that has helped a lot. It truly worked out!
From NW: Before I unsubscribe, I want to thank you for your site – it helped me pass the CPA exam! Every time when I had trouble figuring out a concept, I checked out your site and learned the concept from a different perspective. I LOVED your thorough explanations, much better than the XXXX. I also enjoyed your encouraging periodic newsletters/e-mails. Those fun and positive messages kept me on track! Thank you SO very much!
From OP: Just a word to say thanks so much for your help in passing the CPA exam. I received notice that I passed the 4th part this week, but now I must retake REG in Jan 2011 because the 18 months time limit passed and I lost credit for REG that I initially took and passed in 01/09. Anyway, I am very thankful for all your timeless efforts to help old guys like myself to achieve their desires to excel. I am 58 now and began this endeavor around August 2008. After passing this last "hurdle" and fulfilling my experience requirement, I will launch my "new" career as a CPA!
Now--Picture your email right here – that’s what I want – to hear from YOU about how you used www.CPAreviewforFREE.com and passed that exam!!
(4) – My semester has just ended and I am in the middle of final exams. Last week one of the students came to me because she was disappointed with her grade. She had worked very hard throughout the semester but her test grades were not as good as she hoped they would be. She wanted some advice on how she could do better on the final exam.
I eventually wrote her a note with some advice. I thought that advice might be helpful to you even though you are not taking a final exam in “Introduction to Financial Accounting.”
To my student:
On a test, there are typically one (or more) out of several possible reasons for missing a question.
The first is that you don't read the question very well and don't even know what is being asked or the information that is available. You never get a good handle on the question. In the helter skelter of a test, students often start to "guess" at what the question wants before they have finished the first sentence. They are so pumped up that they want to get on with the job of answering the question before they even read the question. They'll often come back and say "I don't know how I could possibly have missed that. I knew that material and still got the question wrong."
And the most likely answer is that they never really understood what the question was asking. So, after you read the question, repeat it back to yourself. What am I supposed to determine? And, then ask yourself what information is needed to answer that question. Once you know the question, you should start thinking about the information you must obtain to address that question.
The second reason for mistakes is that accounting tests are often quantitative tests where you have a bunch of numbers or other information presented in a very random fashion. Those numbers and that other information must be processed in a particular order. You must provide order for the chaos. Somehow, students often never get the numbers and information ordered correctly. The information remains confused in the person’s head and the person can just not get things lined up to arrive at an answer. So, as you are studying, think about how the information is put together to arrive at a proper answer. Answers tend to be built: do this and then do this and then do this and you have the correct answer.
Students will say “I know I need this and this and this but I don’t see how they all go together—how do I put them together?” That is not a question you should be asking yourself during the test; that is a question you need to answer prior to the test.
The third reason for missing goes back to the learning process. The best way to learn something is to miss it and then have to figure out what went wrong. You need to work as many practice problems as you can and every time you miss one you need to get obsessed with figuring out what went wrong. There is absolutely no reason to practice if you are not going to learn from your mistakes. Too many students say “shucks” when they miss a question and then find a spot within the question that they missed and move on. To say “oh, it is six at that point rather than seven” doesn’t mean you know how to work the question. So, always ask yourself “if this question were asked again but the numbers were changed slightly and rearranged a bit, could I get it right the next time?” In many ways, that is the ultimate preparation question. Until your answer to that question is “absolutely yes,” you cannot move on -- you must still learn how to answer that question.
It takes patience and it takes perseverance but you must read the question carefully, you must understand how the information fits together, and you must learn from your mistakes. If you do that, there is no reason that you can’t knock the top out of that exam.
(5) – If you want to unsubscribe from these email lessons, it is easy. Just scroll to the bottom of this email lesson (or any email lesson) and click on the Unsubcribe link. We are delighted to have you with us. Please stay as long as you wish. Please forward these lessons to your friends, family, strangers, enemies, and creatures from other planets. But, when you are ready to go, you are certainly able to unsubscribe.
(6) – Let’s add some points. Here are four good questions – the chance to add four points to YOUR CPA Exam score.
FAR
A company borrows money on a long-term note payable. In the current year, the company pays the required $23,000 in interest expense. On a statement of cash flows, how is that payment reflected according to IFRS?
A. As an operating activity
B. As a financing activity
C. As either an operating activity or a financing activity
D. As either a financing activity or an investing activity
Answer is C
Under US GAAP, cash paid for interest expense is always reported as an operating activity. IFRS takes a different approach. Cash paid for interest expense can be reported as an operating activity on a statement of cash flows but company management can also show it as a financing activity (since it is directly related to a liability).
BEC
Which of the following is a requirement established by the New York Stock Exchange for the companies that are officially listed on that exchange?
A. A code of conduct must be adopted by the governing board and made public.
B. The company must have both common stock and preferred stock so that investors can have an available option.
C. The company must maintain a reasonable equity position as measured by its debt-to-equity ratio.
D. The company must have a history of paying out a minimum of five percent of its earnings in the form of cash dividends.
Answer is A
To help ensure that companies operate with some level of moral guidance, a code of conduct must be adopted. To help outsiders evaluate the company’s commitment to ethical principles that code of conduct must be made public. Most companies do not have a preferred stock and there are certainly no rules requiring its availability. Investors should judge the financial position and operations of the company for themselves by looking at benchmarks such as the debt-to-equity ratio and the dividend payout. The NYSE has no such requirements about preferred stock, the debt-to-equity ratio, or the dividend payout.
Auditing and Attestation
A CPA firm is planning to do an audit of a reporting entity located in a foreign country and the firm is required to follow the rules established by international auditing standards. What authoritative body establishes those standards?
A. The Public Oversight Board of Europe and Asia
B. The Auditing Development Board of the United Nations
C. The Auditing Standards Group of the World Bank
D. The International Federation of Accountants
Answer is D
The International Federation of Accountants (IFAC) produces international auditing standards. According to its website, “As the global organization for the accountancy profession, IFAC is committed to protecting the public interest by developing high-quality international standards, promoting strong ethical values, encouraging quality practice, and supporting the development of all sectors of the profession around the world.”
Regulation
The Jones Partnership has been in operation for a number of years and is run by Bill Jones and Phil Jones. Tom Smith has also put money into the business but is a silent 20 percent partner. He does not do any work in connection with the business and no one knows that he is a silent partner other that Bill and Phil Jones. Which of the following is true?
A. Tom Smith can only lose the amount of money that he has invested in the partnership.
B. Tom Smith can only be held for responsible for 20 percent of the liabilities of the partnership.
C. Tom Smith can only be held liable by individuals or companies that should have known that he was a partner.
D. Tom Smith has unlimited liability for the debts of the partnership despite serving as a silent partner.
Answer is D
The designation of Smith as a silent partner has no impact on his liability for the debts of a partnership. In a general partnership, all partners have this unlimited risk.
Have a great week – make wonderful things happen!!!!
Joe Hoyle
Co-Founder and President
CPA Review for FREE
www.CPAreviewforFREE.com
126 Weeks of Operation and 19,645,481 Page Views (without a penny spent on marketing)
Lesson 85
From: Joe
(a) – We should go over 20 million page views in the next few days – WOW!!!!
(1) – The 2010 CPA Exam is officially over and we are going to use the next few weeks to switch everything on our site over to the 2011 CPA Exam. Here are some of the changes we want you to notice.
--We have added a bunch of IFRS multiple-choice questions for FAR in our free question and answer database. Probably the 2011 change that has been the most talked about is the addition of some IFRS questions in FAR. We have tried to pick out the questions that we believe are most likely to be used to test IFRS. You can do those questions (right now) at www.CPAreviewforFREE.com.
--As I type, we are in the process of moving our free Business Structure questions and answers from BEC to REG. The examiners decided that those subject areas (corporations and partnerships) were better suited under Regulation.
--We have added a whole bunch of free Corporate Governance questions and answers to our BEC database. The examiners moved Business Structure to REG and replaced it in BEC with Corporate Governance. Those questions and answers are now ready to go.
--In our subscription services for FAR and REG, we have removed all of the old-style simulations and replaced them with brand new task-based simulation questions and answers. We will soon have 10 or so task-based simulations in each of the subscription areas. On the CPA Exam, instead of having two very long simulations that include both research and written communications, each part of the CPA Exam (except BEC) will have 6-7 shorter task-based simulations. Research will still be tested here but the written communications questions will all move to BEC.
--In our subscription services for FAR and REG, we have updated our study programs to incorporate the changes that are being made.
Okay, that is the progress at the moment. We have more to do and I’ll give you that information in my next email less.
Our goal is quite simple: we want to do whatever is necessary to be the biggest CPA Exam Review program in the country by the end of 2011.
(2) – That is our goal for 2011. What is your goal for 2011? Where do you want to be one year from today? As I sometimes tell my students, you don’t need a map if you don’t know where you want to go. Life doesn’t happen as you want it by chance. What would you like to accomplish over the next year?
Hopefully, one of your goals is to get the CPA Exam passed, done, and out of your life.
--Whether you went to a big school or a tiny one, that is a reasonable goal. It just takes work.
--Whether you made a 4.0 in college or just barely passed, that is still a reasonable goal. It just takes work.
--Whether you were the smartest student in your class or the one who just squeaked by, that is still a reasonable goal. It just takes work.
Success doesn’t come by accident.
How soon do you want to pass the CPA Exam? What is reasonable?
Which part do you want to pass next?
How much time is it going to take?
What study materials will you use (hopefully, www.CPAreviewforFREE.com)?
The country (and I suppose the world) seem to be in a rut right now. It needs more people like you to get up and start accomplishing something. The world doesn’t get stronger by having its best and brightest people sit around and whine about our problems. It gets stronger by doing. Figure out what you want to do over the next 365 days and get on with the journey. If you know where you want to go, you can make it happen.
(3) – As always, we love the mail we get.
From KS: Just received my final CPA exam grade--passed FAR with a score of 91. I used your pay content almost exclusively for preparation. I had the XXXX review series, but it was overkill, and the book was way too thick to possibly get through (since I am also working full-time, am married and have two children). So thanks! Your review materials are spot on and prepared me well. I will keep spreading the word about your site!
From JK: I just wanted to say thank you for all of the information on your site! I found out this week that I passed FAR with an 83 after studying with the subscription review slides and free questions on your site. It is such a great resource and I have been using the site instead of doing a review program. Many people at work are surprised when I say I'm not going to a review class, but I really believe that your site is helpful in passing the test. Thank you again.
From Z: Just wanted to let you know that I passed FAR!! Got my scores in today. I made exactly what was needed to pass, a 75. I wanted to take a moment of your time to thank you for your encouraging emails and suggestions. I applied several of your techniques. I actually wrote out on a piece of paper that “every question I do gets me closer to a 75” and that has helped a lot. It truly worked out!
From NW: Before I unsubscribe, I want to thank you for your site – it helped me pass the CPA exam! Every time when I had trouble figuring out a concept, I checked out your site and learned the concept from a different perspective. I LOVED your thorough explanations, much better than the XXXX. I also enjoyed your encouraging periodic newsletters/e-mails. Those fun and positive messages kept me on track! Thank you SO very much!
From OP: Just a word to say thanks so much for your help in passing the CPA exam. I received notice that I passed the 4th part this week, but now I must retake REG in Jan 2011 because the 18 months time limit passed and I lost credit for REG that I initially took and passed in 01/09. Anyway, I am very thankful for all your timeless efforts to help old guys like myself to achieve their desires to excel. I am 58 now and began this endeavor around August 2008. After passing this last "hurdle" and fulfilling my experience requirement, I will launch my "new" career as a CPA!
Now--Picture your email right here – that’s what I want – to hear from YOU about how you used www.CPAreviewforFREE.com and passed that exam!!
(4) – My semester has just ended and I am in the middle of final exams. Last week one of the students came to me because she was disappointed with her grade. She had worked very hard throughout the semester but her test grades were not as good as she hoped they would be. She wanted some advice on how she could do better on the final exam.
I eventually wrote her a note with some advice. I thought that advice might be helpful to you even though you are not taking a final exam in “Introduction to Financial Accounting.”
To my student:
On a test, there are typically one (or more) out of several possible reasons for missing a question.
The first is that you don't read the question very well and don't even know what is being asked or the information that is available. You never get a good handle on the question. In the helter skelter of a test, students often start to "guess" at what the question wants before they have finished the first sentence. They are so pumped up that they want to get on with the job of answering the question before they even read the question. They'll often come back and say "I don't know how I could possibly have missed that. I knew that material and still got the question wrong."
And the most likely answer is that they never really understood what the question was asking. So, after you read the question, repeat it back to yourself. What am I supposed to determine? And, then ask yourself what information is needed to answer that question. Once you know the question, you should start thinking about the information you must obtain to address that question.
The second reason for mistakes is that accounting tests are often quantitative tests where you have a bunch of numbers or other information presented in a very random fashion. Those numbers and that other information must be processed in a particular order. You must provide order for the chaos. Somehow, students often never get the numbers and information ordered correctly. The information remains confused in the person’s head and the person can just not get things lined up to arrive at an answer. So, as you are studying, think about how the information is put together to arrive at a proper answer. Answers tend to be built: do this and then do this and then do this and you have the correct answer.
Students will say “I know I need this and this and this but I don’t see how they all go together—how do I put them together?” That is not a question you should be asking yourself during the test; that is a question you need to answer prior to the test.
The third reason for missing goes back to the learning process. The best way to learn something is to miss it and then have to figure out what went wrong. You need to work as many practice problems as you can and every time you miss one you need to get obsessed with figuring out what went wrong. There is absolutely no reason to practice if you are not going to learn from your mistakes. Too many students say “shucks” when they miss a question and then find a spot within the question that they missed and move on. To say “oh, it is six at that point rather than seven” doesn’t mean you know how to work the question. So, always ask yourself “if this question were asked again but the numbers were changed slightly and rearranged a bit, could I get it right the next time?” In many ways, that is the ultimate preparation question. Until your answer to that question is “absolutely yes,” you cannot move on -- you must still learn how to answer that question.
It takes patience and it takes perseverance but you must read the question carefully, you must understand how the information fits together, and you must learn from your mistakes. If you do that, there is no reason that you can’t knock the top out of that exam.
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(6) – Let’s add some points. Here are four good questions – the chance to add four points to YOUR CPA Exam score.
FAR
A company borrows money on a long-term note payable. In the current year, the company pays the required $23,000 in interest expense. On a statement of cash flows, how is that payment reflected according to IFRS?
A. As an operating activity
B. As a financing activity
C. As either an operating activity or a financing activity
D. As either a financing activity or an investing activity
Answer is C
Under US GAAP, cash paid for interest expense is always reported as an operating activity. IFRS takes a different approach. Cash paid for interest expense can be reported as an operating activity on a statement of cash flows but company management can also show it as a financing activity (since it is directly related to a liability).
BEC
Which of the following is a requirement established by the New York Stock Exchange for the companies that are officially listed on that exchange?
A. A code of conduct must be adopted by the governing board and made public.
B. The company must have both common stock and preferred stock so that investors can have an available option.
C. The company must maintain a reasonable equity position as measured by its debt-to-equity ratio.
D. The company must have a history of paying out a minimum of five percent of its earnings in the form of cash dividends.
Answer is A
To help ensure that companies operate with some level of moral guidance, a code of conduct must be adopted. To help outsiders evaluate the company’s commitment to ethical principles that code of conduct must be made public. Most companies do not have a preferred stock and there are certainly no rules requiring its availability. Investors should judge the financial position and operations of the company for themselves by looking at benchmarks such as the debt-to-equity ratio and the dividend payout. The NYSE has no such requirements about preferred stock, the debt-to-equity ratio, or the dividend payout.
Auditing and Attestation
A CPA firm is planning to do an audit of a reporting entity located in a foreign country and the firm is required to follow the rules established by international auditing standards. What authoritative body establishes those standards?
A. The Public Oversight Board of Europe and Asia
B. The Auditing Development Board of the United Nations
C. The Auditing Standards Group of the World Bank
D. The International Federation of Accountants
Answer is D
The International Federation of Accountants (IFAC) produces international auditing standards. According to its website, “As the global organization for the accountancy profession, IFAC is committed to protecting the public interest by developing high-quality international standards, promoting strong ethical values, encouraging quality practice, and supporting the development of all sectors of the profession around the world.”
Regulation
The Jones Partnership has been in operation for a number of years and is run by Bill Jones and Phil Jones. Tom Smith has also put money into the business but is a silent 20 percent partner. He does not do any work in connection with the business and no one knows that he is a silent partner other that Bill and Phil Jones. Which of the following is true?
A. Tom Smith can only lose the amount of money that he has invested in the partnership.
B. Tom Smith can only be held for responsible for 20 percent of the liabilities of the partnership.
C. Tom Smith can only be held liable by individuals or companies that should have known that he was a partner.
D. Tom Smith has unlimited liability for the debts of the partnership despite serving as a silent partner.
Answer is D
The designation of Smith as a silent partner has no impact on his liability for the debts of a partnership. In a general partnership, all partners have this unlimited risk.
Have a great week – make wonderful things happen!!!!
Joe Hoyle
Co-Founder and President
CPA Review for FREE
www.CPAreviewforFREE.com
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