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July 8, 2011
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157 Weeks of Operation and 25,375,351 Page Views (an average of over 160,000 page views per week for three solid years)
Lesson 99
From: Joe
(1) – We crossed over 25 million page views recently. Because the average person typically looks at about 22 pages on our site with each visit, that means that www.CPAreviewforFREE.com has been used over one million times in three years by future CPAs gaining the knowledge they need to pass. Can you imagine, 1,000,000 visits by accountants adding points to their score for free? I find that both wonderful and amazing. People from around the world get to work with the same database so that they can all pass the exam and get on with their careers (and not have to pay an arm and a leg).
(2) – For those of you taking FAR in July and August, we are introducing our newest product: Points to Pass. It is set up so that you can practice each topic in FAR literally an infinite number of times. We all know that practice is the way to pass—this is the ultimate tool for practicing.
Are you missing too questions in a particular topic such as inventory, consolidations, or leases? Points to Pass doesn’t provide you with just 10 or 20 additional questions but an UNLIMITED SUPPLY OF QUESTIONS FOR EACH TOPIC IN FAR. You can keep working questions in every topic until you have them completely under control.
For example, we have 23 questions currently about inventory in our database. Let’s say you are struggling with that topic and want to keep practicing after you finish those 23. Well, if you have Points to Pass, you can get more and more and more Inventory questions for as long as you want.
Here’s how it works. We have taken each of the FAR topics and designated about half of those questions as especially important. We have then created a computer program that will change one or more of the essential variables in each of those questions so that you can work them again but with different numbers. So, the 23 inventory questions can become 50 or 100 or 1,000. Just keep working until you are comfortable with that topic and then move to the next one and do it again.
To start practicing with Points to Pass, log into your account at www.CPAreviewforFREE.com and click on Manage Your Purchases>New Subscriptions and select Points to Pass for a 1 month package for only $29.99 or 3 months for only $89.97.
If you have a question about Points to Pass, send an email to info@cpareviewforfree.com
(3) – Always love to hear from you folks who are taking (or have taken) the CPA Exam!!!
FROM BR: “I passed!!! I passed 3 parts (BEC, AUD, and REG) using only your software, simulations, and subscription notes.... Thank you so much for providing this site; it has been a life saver!!!! Thank you so much.”
FROM SD: “I just wanted to say ‘THANK YOU’ for your dedication and hard work in providing a truly free CPA review service. There were many days that my mind was exhausted from studying and I would want to ‘rest’ it but I would get an email from you and it would perk me up to try your practice questions. Sometimes our brains need a ‘re-boot’ and your emails always did the trick for me. I passed my first CPA exam on October 8, 2010 & my final part on May 23, 2011 and all on the first try. I truly believe in your ‘get a point every day’ theory and feel like it helped me push through some very tough material.”
FROM KM: “Just wanted to thank you for the pointers you gave me. I got the Reg part with an 80 after going through your subscription material. Unfortunately my Auditing had expired, but am very confident of getting it back on July 10 when I retake it.”
FROM VT: “I just got my REG score back today. I passed with a 75. That was my first attempt at REG so I am happy that I passed.... Thank you for your website. I used your website as 50% of my study material and the other is a book I bought at Borders. I am attempting to pass without having to spend a lot of money. We will see how that goes by the end of September.”
FROM RJ: “After receiving scores of 60, 60, 72 and then 65 I found out yesterday that I received a score of 88 on the Audit and Attestation part of the CPA exam! I stared at the computer screen for about a minute before the score actually registered in my mind and realized that I passed!!! It's really great to see what a passing score looks like! … Now it's on to adding points in BEC! Every time I sit down to study I remember what you always say ‘add points,’ ‘add points,’ ‘add points.’
FROM TM: “I have cleared all 4 papers at first attempt. I used your free material as well as bought BEC and Reg subscriptions. They were very useful. Thanks for your help.”
FROM CD: “I'm loving the essential material on CPAReviewForFree. I'm telling everyone I know who is studying for the exam to use that instead of the other guys. Thanks.”
(4) – And, now for the legal stuff. You received this email because you have signed up for it. We love having you. We love hearing from you (see above). We love being helpful. I’ve been writing these email lessons for well over a decade and I’m sure I can go on for another decade or two, maybe even another millennium. However, you absolutely do have the legal right to unsubscribe whenever you wish. So, on any email lesson, if you scroll to the bottom, you’ll find a link that is labeled “Unsubscribe.” If you need to go, we understand. But, we do hope you’ll tell anyone and everyone about www.CPAreviewforFREE.com and its attempt to create world harmony through the universal passing of the CPA Exam.
(5) – I really like to spend each Fourth of July in Yorktown, Williamsburg, and Jamestown, Virginia because so much of our country’s history took place in those 10-15 miles. You can see where the British surrendered at the end of the Revolution. You can see where Thomas Jefferson went to school. You can see where the early settlers risked their lives to start the Jamestown Colony. Yeah, it is my favorite place to spend Independence Day.
Driving home on the 4th, I was listening to some music on the radio and a group sang a song that just seemed to fit the mood of that trip: “No one remembers what you didn’t do.” Those people at Yorktown, Williamsburg, and Jamestown are remembered because of what they managed to accomplish.
Okay, passing the CPA Exam is not on the same planet as winning the Revolutionary War or founding a colony in a new world. I do realize that. But the things that count in this life are the things that you accomplish. It is not easy, I fully understand. I passed the CPA Exam myself – I know how hard it is to do all that work. However, nothing was ever accomplished by not trying. Nothing good comes from giving up. Life is about doing.
I am a firm believer that everyone can pass the CPA Exam. Yes, you have to put in the time. You have to work enough questions. You have to read enough answers. You have to take enough notes. It is not easy. That’s what makes it worth doing.
No one is ever going to remember what you don’t do.
Life is meant to be lived by doing. Do the work and pass that exam.
You’ll always be so glad you put in that work.
(6) – I posted part of the following message on our Facebook page yesterday – here’s the entire message.
Many, many people reading these lessons will be taking one or more parts of the CPA Exam during the roughly 8 weeks that remain until the end of August. Sometime in the next 8 weeks, an awful lot of you will walk into a testing center somewhere in this world and take a section of the CPA Exam. Whether you pass or fail that exam depends very much on how well you use these last days and weeks. The points you add at the end are the most important because that is the stuff you’ll remember the best.
It is easy to get tired and discouraged and find reasons not to study, especially here in the summer when the weather can be so beautiful. We are all human; it is very easy to find reasons NOT to do the work.
It is a much bigger challenge to find reasons each day TO study. Why should YOU study today? Make it a habit every day to find one good reason for you to do what has to be done:
I want to add a point today. I want to do the work to add a point today. Why is that?
I don't ever want to ever take this exam again.
I want my parents, my spouse, my friends, my kids to be proud of me.
I want to show my boss what I know.
I want my resume to say "CPA."
I want to get that promotion.
I know I can do it so I might as well get it done.
I want to feel good about myself.
I want that “I did it” feeling when I see those scores.
In these last 8 weeks, it is very easy to get into a "I dread study" routine. Occasionally, I hear from people who tell me: "I'm going to study today but I am going to hate every second of it." Trust me, that makes it 10 times more difficult to put in the time. It is just hard to be efficient at preparation when you only have negative reasons to study.
Don't approach your studies as a negative - that's one of the primary problems with our school system; learning is too often viewed as a negative by the students. Find a good positive reason to study today:
I want to show my spouse (or my girl friend or boy friend) that I can make 75.
I want to prove to my teacher in college that I was smarter than he thought.
I want to get a new job and this will help my search.
I'll get a raise or a bonus when I pass.
I want to watch television again or go to the movies.
I want to be able to play with my kids more next fall.
I want to prove to the world that I can do it.
If you look, there are many many good reasons to study today.
Come at this exam in an aggressive, positive manner. It should not be a torture to be dreaded but a challenge to be conquered. Study is not a punishment; study - just like exercise - will make you better and, thus, better able to conquer the challenge you face.
(7) – Ah, time for a bit of practice – take out a pencil and piece of paper and see how many of these you can get correct.
FAR
A nongovernmental not-for-profit organization (Charity A) receives a gift of $50,000 that must be conveyed to another, separate not-for-profit organization. Which of the following statements is true?
A – Charity A will record contribution revenue of $50,000 in all cases.
B – Charity A will record contribution revenue of $50,000 but it must be labeled as temporarily restricted.
C – Charity A will record contribution revenue of $50,000 but only if it has variance powers to change the beneficiary.
D – Charity A cannot record contribution revenue but must record a liability of $50,000 to the other charity.
Answer is C
Normally, when a not-for-profit organization receives a gift that must be conveyed to another charity, it is merely serving to convey the money and records it as a liability (answer D). However, if the initial charity is giving variance powers so that it does have the ability to change beneficiary, then it has genuine control over the money. Under that situation, Charity A records the gift as contribution revenue and not as a liability.
Auditing & Attestation
A CPA is performing an independent audit of the Longston Corporation. The CPA is currently doing a test of the controls surrounding the recording of accounts receivable. Shirley Jones is the internal auditor for Longston and has offered to help in performing these tests of controls. Which of the following is true?
A – The CPA cannot allow the internal auditor to provide any direct assistance in the tests of controls.
B – The CPA should not have let the internal auditor know what testing was being considered.
C – The CPA can allow the internal auditor to provide direct assistance in the tests of these controls.
D – The CPA can allow the company accountant to be of direct assistance but not the internal auditor.
Answer is C.
The CPA may receive assistance from the internal auditor in providing tests of controls (and also substantive testing procedures) with proper oversight. The CPA will probably be interested in making sure the internal auditor is properly competent by verifying her education, certification, and work experience and by examining her previous work for this client. The CPA will also need to ensure that her work is properly reviewed. However, if all of that seems appropriate, the CPA can get direct assistance from the internal auditor in doing tests of controls.
Regulation
Ligano serves as an agent for Boswell. Boswell has only given Ligano the authority to carry out 4 specific actions on his behalf. However, Ligano carries out an action in Boswell’s name that is not one of those four. The agent (Ligano) lacked authority to legally bind the principal (Boswell). Boswell decides to affirm the act and do the specified work despite Ligano’s lack of authority. What action has Boswell taken?
A – Reimbursement by judgment
B – Ratification
C – Reference by priority
D – Reference by remainder
Answer is B
Whenever an agent (such as an employee) takes an action without proper authority, once informed, the principal must either ratify it (agree to be bound to the agreement) or repudiate it (inform the other party that the principal will not be bound by the agreement because the agent did not have proper authority).
BEC
The Swinton Company wants to open a new retail outlet in Manchester. Swinton officials go to the local bank and borrow $500,000 to start operations and agree to pay an annual interest rate of 8 percent. As part of the agreement, Swinton must maintain a cash balance in the local bank of $40,000. What is the effective cost to Swinton of borrowing this money for one year? (rounded)
A – 8.2 percent
B – 8.5 percent
C – 8.7 percent
D – 8.9 percent
Answer is C
Swinton only gets $460,000 from the bank to use because $40,000 must stay with the bank. The annual cost of the loan is an interest charge of $40,000 ($500,000 times 8 percent). If Swinton pays $40,000 per year to get $460,000, the annual cost of the loan is $40,000/$460,000 or 8.7 percent.
You’ve got roughly 8 weeks left in the July-August window. Let’s make the very best of that time to add points and get 75 and pass.
Joe Hoyle
Co-Founder and President
CPA Review for FREE
www.CPAreviewforFREE.com
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