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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!!!!!
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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
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