Characteristics for Success of the CPA Exam

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March 9, 2011

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Lesson 90

From: Joe

(1) – I want to start with the same information that I sent out last week about the CPA Exam going international. I know that, for a lot of our readers, this is exciting news.

Starting in 2011, the Uniform CPA Examination will be offered during the month of August in Japan, Bahrain, Kuwait, Lebanon and the United Arab Emirates. The international exam, which will be offered in English, is the same as the U.S. exam administered by the AICPA, NASBA, and Prometric in the United States. Future testing months during which the exam will be administered in Japan and the Middle East will be November 2011 and February, May 2012. Licensure requirements for international candidates are the same as for U.S. CPA candidates. Along with passing the Uniform CPA Examination, international candidates must meet educational and experience requirements as mandated by U.S. state boards of accountancy. In the United States, state boards have the governmental legal authority to award the U.S. CPA license. Registration for the international exam will begin on May 1, and applications may be made through certain U.S. state boards of accountancy offering eligibility for
international candidates. A list of participating state boards and information about fees will be posted on the NASBA website in April at www.nasba.org. Testing in the new international locations will be open to citizens and long-term residents of the countries in which the exam is being administered. In the Middle East, citizens of Egypt, Jordan, Oman, Qatar and Saudi Arabia may take the exam in one of the Middle East locations. U.S. citizens living abroad are eligible to test at any location.


(2) – Okay, we’ve got thousands of people who use www.CPAreviewforFREE.com for our free questions and answers each and every week.

--Most of them are preparing for the CPA Exam. Many of those folks have become disenchanted with the mediocre review programs that charge them thousands and are poorly put together.
--Others simply decided (as our motto suggests) to try us for free first before investing even a penny in a review program.
--Some use us along with other books and programs; some use our free questions along with our subscription service ($15 per month per part); and some folks use our questions all by themselves to pass.
--We also assist college students who are desperately trying to get an A in Intermediate Accounting, Advanced Accounting, Auditing, Business Law, Income Taxes, or the like. They use our questions as a way to practice and review.
--Other folks just use our questions to keep themselves in touch with a wide variety of accounting questions. I’m always fascinated by how many people write in to say “I passed the exam years ago but I still enjoy working 5-10 of your question each day to stay sharp.”

How you make use of www.CPAreviewforFREE.com is up to you. The 2,200 questions and answers are there for YOU. We are happy to make them available. When we first started, we would get a lot of questions like “what’s the catch?” There is no catch. By now, nearly three years in, most people have come to understand that. We are happy to be of help to you.

We do need to make enough money to support our site so when you pay to download the questions and answers or when you use our subscription service ($15 per month per part), you are really helping to keep us in business so that we can continue to help others. THANKS!!! We very much appreciate your support.

So, if you have never looked at our questions and answers, go online and start working. One hour per day working with our questions and answers and you have a great chance of passing the entire CPA Exam in 2011 FOR FREE.

We don’t want to see the high cost (and low quality) of other CPA review programs keep you out of the Accounting profession. I have long argued that the cost of CPA review is entirely unfair. The Accounting profession should be open to everyone, not just those people who can afford expensive review programs.

I was reminded of this last week when I got a wonderful email from an accountant in Iran who thanked me for what we were doing. Do you think those big review programs get many grateful emails from Iran? We are not out to save the world but we are glad to be of help to everyone who wants to be able to enter the Accounting profession—no matter where you live and no matter how much money you have.

And, of course, we are grateful for your support.


(3) – How Good Do You Have To Be? I am convinced that everyone is always a bit insecure about most important things. That is just human nature. So, when you start to consider taking the CPA Exam, there is always the sinking feeling that you are just not smart enough to be able to pass. Well, I’m here to tell you that is pure NONSENSE!!!! Yes, the CPA Exam is tough and requires work but anyone who is willing to put in the time and stays persistent should be able to pass the CPA Exam in a reasonable period of time. No matter how many doubts you may have-YOU CAN DO IT!!!

Assume that you bring in 100 candidates who are thinking about taking the CPA Exam. Do you have to be the smartest person in the room to pass? Of course not. Do you have to be one of the best prepared candidates in that room to succeed? No way. In school, we tend to focus on the very top students—that upper 10 percent that seem to know all the answers. Passing the CPA Exam isn’t like school. In most cases, the top 50 percent of the people (roughly) are going to pass each part while many of the rest are going to come close. And, in that bottom half are an awful lot of people who never got around to studying at all. Or, they studied a few hours, got distracted, and never got back to it.

In other words, most people who try do pretty well. That’s just the statistics. That’s the secret that those big review courses don’t want you to know.

So, yes, you do have to study and certainly you can fail. But you don’t have to be a genius to pass. You don’t have to be an A plus student to succeed. That’s all just a myth. You just have to get in the upper 50 percent. That bar is not set terribly high.

How do you get into the upper 50 percent? You study. You study. You study. It is not magic. You study. I always suggest that if you just want to pass (make 75) you should spend 60-100 hours per part. That is one hour per day for between 8 months to a bit over a year. That is not easy but it certainly is not impossible. If you get up a bit early, you can have that done every day before breakfast.

How do you spend 60-100 hours of studying per part?
It doesn’t take smarts.
What characteristics does it take? What helps people become winners on the exam?
--Desire
--Ambition
--Determination
--Self-control
--Patience
--Planning
--Being Methodical
--Persistency
--Being Driven

Yeah, when it comes to the CPA Exam, I would take any one of those characteristics over smarts. Anyone can have smarts and waste them away. But if you give me a person with the above characteristics, I’ll show you a real winner.

You can do it.


(4) – Need to unsubscribe? Well, we hate for you to leave us but you have the right to unsubscribe. Just scroll to the bottom of this email and you’ll find an unsubscribe button. Use it and we shall part. However, before you do so, why not forward this lesson to a friend who might be thinking of taking the CPA Exam and tell them they should go to www.CPAreviewforFREE.com and register and check the box for additional materials and those additional materials ONLY include these email lessons. And, before you leave, let me say one final time “Thanks so much for being with us.”


(5) – Time to practice. Notice that this first question is very similar to the first question in our previous lesson but with some small changes. Often in accounting, understanding the importance of small changes can make all the difference in the world.

FAR

On January 1, Year One, Ace Company completes construction work on a warehouse at a cost of $2 million and sells it to a bank for $2.3 million. It has a useful life of 30 years. Ace immediately leases it back for two years. What amount of gain is recognized by Ace during Year One?

A. Zero
B. $10,000
C. $150,000
D. $300,000

Answer is D

In a sale-leaseback arrangement, any gain on the sale is normally deferred and then written off as a reduction to the depreciation expense recognized in connection with the leased asset. However, if the leaseback is for a period of 10 percent or less of the life of the asset, the entire gain is recognized immediately. Here, the leaseback is for only two out of 30 years so that the gain is not deferred but recognized entirely at the time of sale.


Regulation (I went to our subscription service and picked this information at random).

A calendar-year corporation was organized and incurred organizational expenditures of $6,000. Assume the corporation begins business on April 1, Year One, and wants to maximize its deduction for organizational expenditures in that year. What amount can be deducted in Year One?

A. Zero
B. $300
C. $5,000
D. $5,050

Answer is D

Because the company has elected to maximize its deductions in Year One, they can deduct the first $5,000 immediately. The remaining $1,000 is amortized to expense over 180 months or $1,000 x 9/180 = $50. Although it does not apply here, if the organization expenditures are over $50,000, the company begins to lose the right to the initial $5,000 deduction so that more is subject to amortization.


Auditing and Attestation.

A publicly-held corporation is in the process of changing its president. Which of the following forms should be filed with the SEC to disclose this event?

A. Form 10-K
B. Form S-1
C. Form S-3
D. Form 8-K

Answer is D

According to the SEC’s website, “Form 8-K is the ‘current report’ companies must file with the SEC to announce major events that shareholders should know about.”


BEC

Numerous companies produce widgets. However, the only company that buys widgets on the market is the Ace Corporation which uses the widgets in its uniquely designed aircraft. In economics, how is this market described?

A. As a floating market
B. As a monopsony
C. As a category 2 market
D. As a market dominated by the Wilson effect

Answer is B

Candidates are likely to know of a monopoly—a situation where there is only one seller so that unfair pricing advantage can be taken over customers. A monopsony is the opposite situation where there are many sellers but only a single buyer. This buyer can often demand unreasonably low prices because the sellers have no other alternative sales for their goods.


Hope the sun is shining where you are today. Start using www.CPAreviewforFREE.com to add those points that you need in order to pass the CPA Exam. Let’s get it done in 2011.


Joe Hoyle
President and Co-Founder
CPAreviewforFREE

www.CPAreviewforFREE.com