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August 22, 2011
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Lesson 102
From: Joe
(1) – There are about 10 days left in the July-August testing window for the CPA Exam. Because many people wait until the very end of the window to take the exam, I realize that a lot of you who are reading this email are getting very close to the time to enter the exam site. A few last minute thoughts.
--Many people get close to 75. Therefore, the points you add here at the end may well be the difference between passing and failing. Keep adding points for as long as you can. Each question might be the difference between 74 and 75.
--Try to review all of the material briefly within the last week of the exam. You want every single topic to be fresh in your mind. Any topic that you have not looked at in the last week is probably a bit stale.
--It is far better to be relaxed and rested than it is to over-study. One of the biggest mistakes that people make is trying to push themselves to complete exhaustion right before the exam and then they are mystified by how many careless mistakes they make during the actual exam. Few people do well at any 3-4 hour task if they start out very tired. Use the last 24 hours to get relaxed and rested.
--Few things on the exam are more important than time management. Have a plan for how quickly you want to work each question and then stay aware of your time throughout the exam.
--Read the information that they send you about taking the test in advance and follow their rules precisely. You don’t want anything upsetting your calmness on the day of the exam. You want this to be an entirely calm and uneventful experience.
--By the way they grade, you can miss a lot of questions and still pass. In fact, they expect you to miss quite a significant number. Don’t let weird topics and odd questions rattle you. Too many candidates get four questions they know and one that they don’t know and become obsessed (and badly distracted) by the one they didn’t know. If it really is an odd question, eliminate as many answers as possible and take a guess.
At the end, walk away and tell yourself: “I gave it my very best and that’s all I can do and I’m not going to spend another second worrying about it.”
(2) – Remember, if you really don’t want to pay a fortune for mediocre CPA Review, we have a number of products that can help you gain the points you need to pass at a very low price.
---For $15 per month per part, you can get our Essentials. For each part, the Essentials contains:
a. Hundreds of slides of content to cover all of the topics you need to know to pass.
b. A study guide that merges all our free questions and answers with the content material that is provided in the Essentials and tells you what to do at each study session.
c. Approximately 10 examples of simulations (for each part other than BEC) and written communication questions (for BEC)
---For $29.99 per month, you can get (for FAR only so far) our Points to Pass software program. This computer program allows you to practice 250 of our most important questions an infinite number of times, each time with different numbers and answers. To work an example of our Points to Pass program, click here and start automatically working a demo question on leases. To our knowledge, no other review course has this software testing program.
Work that basic question over and over until you can do the problem in your sleep. You’ll be surprised how quickly you can master even the most complicated question using Points to Pass.
d. Remember that we have 250 specially picked questions in the Points to Pass program just like the demo question that you can work dozens of time until you can work each one backwards and forwards.
(3) – I was in a meeting two weeks back with the CPA Examiners. Here are the pass rates for the first two quarters of 2011. As you can see, they are a little lower than in recent years. The folks from the AICPA said they had expected a slight drop because of the various changes made in January 2011 in the exam (adding task based simulations, moving the written communications questions to BEC, adding IFRS, and the like). They said that when a licensing exam changes in some way the scores usually drop for a quarter or two until candidates adapt. So, they expect higher pass rates to come back very soon.
--AUD – 46 percent
--BEC – 45 percent
--FAR – 43 percent
--REG – 43 percent
(4) – This is our 102nd lesson and we have literally had people get all 102 of these lessons over the last few years. For others of you, this is probably your first email lesson from CPAreviewforFREE. We want everyone to know that you always have the right to unsubscribe whenever you wish. Scroll to the bottom of this or any other lesson and you’ll find a link that allows you to unsubscribe.
We love having you, especially if you stay around for 102 lessons. However, you do have the legal right to unsubscribe and we want you to know that we honor that right.
(5) - Today (Monday, August 22), classes begin here at the University of Richmond. It is my 41st year as a college teacher. I always love the start of a new year. Students come into class and every single person has the ability to do well. When students walk in on the first day, every one of them could make an A or a B simply by putting in the time and doing the work. There is the universal opportunity for people to succeed. I will like that feeling as I stare out at my students today. The only thing that stands between each of those students and success are the stumbling blocks that they place there themselves.
When you deal with college students, you eventually hear every possible excuse and then some. I don’t want excuses. I’m not trying to be a hard guy but I want success.
I want them to do a moderate amount of work and think about that material (“debits are on the left and credits are on the right – there are only two variables here, how tough can this be?”) If they do the work and do it consistently, they’ll all make an A or a B.
For me, it is all about the start of a new year. No matter how bad things have been in the past, we start over and everyone is on an even playing field. No matter what you did in previous classes, everyone starts off at the same spot and what you make of it is up to you. Whether you have been an A+ student in the past or a C- student, this is a new year and this is a new opportunity to show what you can do.
One of the things I like, though, is to try to extend this “newness.” Why focus on a new year? Every day is a new day. Every day holds infinite possibilities. Every day brings the chance that you can make something wonderful happen.
I think we all get locked into negative thinking – “this is a bad week,” “this is a bad month,” “2011 has been a tough year for me,” “I’ve always struggled with standardized tests.” I sometimes hear this negative thinking as a litany that just colors a person’s entire existence.
Would your friends say that you are a positive person or would your friends say that you are a negative person? True me – it is always better to be a positive, optimistic, upbeat person. If your friends would refer to you as a negative person, today is a good day to start making a change.
Today is Monday, August 21. I don’t know what happened to you on August 20 or 19 or any other day and I don’t really care. I just care about today. It is such a wonderful opportunity. At the end of this day, you can be different – you can be better. And, you can help make the people around you better. You can be different and you can make a difference.
I don’t care how much or how little you have studied for the CPA Exam in the past. You’ve got a new day to add points. I always say that any day where you can add 2-3 points is a great day. Maybe it didn’t happen yesterday but, gosh, it can happen today.
Go and start working questions. Don’t put it off. Don’t give me excuses. Imagine your grade getting slightly higher and higher as you work each new question. Read the question, come up with your answer, read my answer, make a few notes (10 words or less) if you need to. Then, move on to the next question. This is not rocket science. It is learning how to answer questions. And the best way to learn how to answer questions is to read questions, come up with your answer, read my answer, take a few notes.
Make it happen.
Today!!!
Today!!!
Today!!!
It is a new day – make it a great one.
(6) – Need some encouragement. Need some ideas. Read “Tips for Success.” Read a tip or three every day. I think they’ll give you an energy boost.
(7) – Time to practice. Let’s get started on adding those 2-3 points for today.
FAR
Smile Today is a private not-for-profit organization. In Year One, Smile Today receives a check for $24,000 that must be used to pay for dental work for impoverished children. In Year Two, the money is paid to a local dentist for work that she did on 180 local children who could not afford to have proper dental care. What is recorded within unrestricted net assets during Year Two as reported by Smile Today?
A. Nothing is reported.
B. A decrease of $24,000 to be pay for the dental work.
C. An increase of $24,000 as a result of the original donation.
D. Both an increase and a decrease of $24,000.
Answer is D
In a private not-for-profit organization, a designated gift of this type is initially (Year One) recorded as an increase in temporarily restricted net assets. Subsequently, when the money is spent as specified or when the required time period has passed, this amount is removed from temporarily restricted net assets and added to unrestricted net assets. At the same time, the $24,000 paid to the dentist for the work done is reported as an expense within unrestricted net assets. Consequently, both the support and the expense are reported in unrestricted net assets in Year Two when the money is properly spent.
Auditing and Attestation
The January Company is a small corporation that sells men’s clothing in Billings, Montana. The company does not issue securities to the public and is not required to have audited financial statements. However, Jeter and Cano, CPAs are hired to do a review of the company’s annual financial statements. In performing the review, the CPAs discover that a material amount of expenses was capitalized during the year. How does this impact the report issued by the CPAs?
A. An adverse opinion must be rendered because the company did not follow U.S. GAAP.
B. A disclaimer of opinion must be rendered because the company did not follow U.S. GAAP.
C. The material misstatement must be disclosed by the CPAs in a separate paragraph to their report.
D. The CPAs must decide between a qualified opinion and an adverse opinion based on the magnitude and nature of the problem.
Answer is C
An opinion is given as the result of an audit. The CPAs carried out a review and not an audit so no type of opinion can be rendered at all. For a review, CPAs are required to include an extra explanatory paragraph in their report to draw attention to any material departure from U.S. GAAP.
Regulation
The Morganton Corporation has revenues of $100,000, expenses of $80,000, and charitable contributions of $5,000. Which of the following is true?
A. Taxable income is $18,000 and $3,000 in contributions can be carried over for five years.
B. Taxable income is $20,000 and $5,000 in contributions can be carried over indefinitely.
C. Taxable income is $15,000 and there are no amounts to be carried over.
D. Taxable income is $19,000 and $4,000 in contributions can be carried over for three years.
Answer is A
A corporation first computes its net income without the contributions taken into consideration. Here, that is $20,000 ($100,000 less $80,000). Charitable contributions of up to 10 percent of that figure ($2,000 in this case) can then be deducted. That drops taxable income to $18,000. The remainder of the contributions ($3,000) can be carried forward for up to five years.
BEC
The Lenoir Company produces several types of widgets in two departments. In the first department, there are three separate activities and, in the second department, there are four separate activities. The production process has a significant amount of overhead and officials believe that it is especially important to assign the overhead to each type of widget as precisely as possible. If activity-based costing is used, which of the following statements is true?
A. Overhead is assigned one time, at the end of the process in the second department.
B. Overhead is assigned two times, at the end of each of the two departments.
C. Overhead is assigned for each separate activity, three times in the first department and four times in the second.
D. One continuous overhead rate is applied as each widget moves through the production process.
Answer is C
Activity-based costing attempts to assign overhead as accurately as possible by dividing up the entire process into activities, each with its own identified cost driver. For example, in the first activity in department one, officials may believe that overhead is caused by direct labor hours and should be assigned in that way. In the second activity in department one, perhaps overhead is assumed to be related to the cost of direct materials and is assigned that way. Whenever overhead is particularly large, its assignment to individual products becomes especially important. Activity-based costing does that using separate cost drivers for each identifiable activity.
Have a great week!!
Remember that each new day is a wonderful opportunity so make the most of it!!
Joe Hoyle
www.CPAreviewforFREE.com
Monday, August 22, 2011
Friday, August 19, 2011
You can do it, Points to Pass New Demo, Survey Results
CPAreviewforFREE--Try us FIRST before you spend your hard-earned money.
Lesson 101—In this lesson--Points to Pass New Demo, More Survey Results, Grading Changes in 2011, A word from Joe
From: Lynn (No, Joe hasn't gone anywhere!)
POINTS TO PASS NEW DEMO
Ready to try Points to Pass? Not sure what it is or how it works? We thought you might like to give Points to Pass a try since it's not like any other CPA review product. Go to our store, scroll down to Points to Pass and click on the link "Example PtP Question". That's it! You'll work an UNLIMITED number of questions based on just that one demo question until you get the concept down perfectly.
If you like what you see, it is only one dollar per day for all 250 Points to Pass questions! For an infinite number of questions. Yep, $29.99 per month.
MORE SURVEY RESULTS
A tip to see our site in a larger font size: Open up your browser to CPAreviewforFREE and press the Control and "+" keys again and again to zoom in. No, you don't have to hit the Shift key to achieve the upper case "+".
Many of you mentioned that there's no phone number on the website to contact us and felt that we lose a bit of legitimacy because of it. We also have a 98% customer satisfaction rate with our current email support system and we run a very tight ship to keep prices down which we pass along to you!
GRADING CHANGES AS OF JAN 2011
You may or may not be aware of the grading changes that took effect in January 2011. Because they moved all the written communication questions to BEC, they had to change that. You can find everything about scoring now here.
WORDS FROM JOE
You might find this interesting. On one particular day recently, we measured our traffic by city. We were interested in learning where people came from who used our materials. Here are the top eight:
--New York City
--Hyderabad, India
--Chicago
--Washington, DC
--Los Angeles
--Houston
--San Francisco
--Philadelphia
Wherever you are, we are glad you are with us.
I love what Michael Jordan had to say: “Obstacles don't have to stop you. 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.”
Does this sound like you?
--“I simply cannot find the time to study.”
Always be ready to study whenever a free minute or two pops up. Too many people take 30 minutes just to get ready to study. Everything has to be aligned perfectly. You can’t do that. You always have to be ready to get some work done if you have even the slightest chance. Always carry note cards in your pocket, for example. When a free moment shows up, pull them out and start reviewing. Or, for a small fee, you can download all of our questions and answers. Carry them with you at all times and if you have even one minute, that is a perfect chance to work a question or two.
--“I mean to study but somehow it never happens. Each day is the same – I’m a person with good intentions.”
At the start of every day, write down exactly when you are going to study and for how long. Then, when those times arise, stop everything else and make it happen. Nothing beats a schedule. If you say “at 7:30 in the morning, I’m going to study for 30 minutes before I head to work” then that should be an absolute necessity. If you say “at 5:00 each evening, I’m going to study for 45 minutes before I start to cook dinner” then you must not let that time slip by. Set the schedule and then hold yourself to that schedule.
I was talking with a friend of mine the other day and he mentioned the seminal work by Booker T. Washington “Up From Slavery” which was his autobiography, published 110 years ago. My friend had read it recently and mentioned one line that had made a real difference to him: "I have learned that success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome while trying to succeed."
YOU can do it!
Lesson 101—In this lesson--Points to Pass New Demo, More Survey Results, Grading Changes in 2011, A word from Joe
From: Lynn (No, Joe hasn't gone anywhere!)
POINTS TO PASS NEW DEMO
Ready to try Points to Pass? Not sure what it is or how it works? We thought you might like to give Points to Pass a try since it's not like any other CPA review product. Go to our store, scroll down to Points to Pass and click on the link "Example PtP Question". That's it! You'll work an UNLIMITED number of questions based on just that one demo question until you get the concept down perfectly.
If you like what you see, it is only one dollar per day for all 250 Points to Pass questions! For an infinite number of questions. Yep, $29.99 per month.
MORE SURVEY RESULTS
A tip to see our site in a larger font size: Open up your browser to CPAreviewforFREE and press the Control and "+" keys again and again to zoom in. No, you don't have to hit the Shift key to achieve the upper case "+".
Many of you mentioned that there's no phone number on the website to contact us and felt that we lose a bit of legitimacy because of it. We also have a 98% customer satisfaction rate with our current email support system and we run a very tight ship to keep prices down which we pass along to you!
GRADING CHANGES AS OF JAN 2011
You may or may not be aware of the grading changes that took effect in January 2011. Because they moved all the written communication questions to BEC, they had to change that. You can find everything about scoring now here.
WORDS FROM JOE
You might find this interesting. On one particular day recently, we measured our traffic by city. We were interested in learning where people came from who used our materials. Here are the top eight:
--New York City
--Hyderabad, India
--Chicago
--Washington, DC
--Los Angeles
--Houston
--San Francisco
--Philadelphia
Wherever you are, we are glad you are with us.
I love what Michael Jordan had to say: “Obstacles don't have to stop you. 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.”
Does this sound like you?
--“I simply cannot find the time to study.”
Always be ready to study whenever a free minute or two pops up. Too many people take 30 minutes just to get ready to study. Everything has to be aligned perfectly. You can’t do that. You always have to be ready to get some work done if you have even the slightest chance. Always carry note cards in your pocket, for example. When a free moment shows up, pull them out and start reviewing. Or, for a small fee, you can download all of our questions and answers. Carry them with you at all times and if you have even one minute, that is a perfect chance to work a question or two.
--“I mean to study but somehow it never happens. Each day is the same – I’m a person with good intentions.”
At the start of every day, write down exactly when you are going to study and for how long. Then, when those times arise, stop everything else and make it happen. Nothing beats a schedule. If you say “at 7:30 in the morning, I’m going to study for 30 minutes before I head to work” then that should be an absolute necessity. If you say “at 5:00 each evening, I’m going to study for 45 minutes before I start to cook dinner” then you must not let that time slip by. Set the schedule and then hold yourself to that schedule.
I was talking with a friend of mine the other day and he mentioned the seminal work by Booker T. Washington “Up From Slavery” which was his autobiography, published 110 years ago. My friend had read it recently and mentioned one line that had made a real difference to him: "I have learned that success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome while trying to succeed."
YOU can do it!
Wednesday, August 17, 2011
CPAreviewforFREE--Try us FIRST before you spend your hard-earned money.
Lesson 101—In this lesson--Points to Pass New Demo, More Survey Results, Grading Changes in 2011, A word from Joe
From: Lynn (No, Joe hasn't gone anywhere!)
POINTS TO PASS NEW DEMO
Ready to try Points to Pass? Not sure what it is or how it works? We thought you might like to give Points to Pass a try since it's not like any other CPA review product. Go to our store, scroll down to Points to Pass and click on the link "Example PtP Question". That's it! You'll work an UNLIMITED number of questions based on just that one demo question until you get the concept down perfectly.
If you like what you see, it is only one dollar per day for all 250 Points to Pass questions! For an infinite number of questions. Yep, $29.99 per month.
MORE SURVEY RESULTS
A tip to see our site in a larger font size: Open up your browser to CPAreviewforFREE and press the Control and "+" keys again and again to zoom in. No, you don't have to hit the Shift key to achieve the upper case "+".
Many of you mentioned that there's no phone number on the website to contact us and felt that we lose a bit of legitimacy because of it. We also have a 98% customer satisfaction rate with our current email support system and we run a very tight ship to keep prices down which we pass along to you!
GRADING CHANGES AS OF JAN 2011
You may or may not be aware of the grading changes that took effect in January 2011. Because they moved all the written communication questions to BEC, they had to change that. You can find everything about scoring now here.
WORDS FROM JOE
You might find this interesting. On one particular day recently, we measured our traffic by city. We were interested in learning where people came from who used our materials. Here are the top eight:
--New York City
--Hyderabad, India
--Chicago
--Washington, DC
--Los Angeles
--Houston
--San Francisco
--Philadelphia
Wherever you are, we are glad you are with us.
I love what Michael Jordan had to say: “Obstacles don't have to stop you. 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.”
Does this sound like you?
--“I simply cannot find the time to study.”
Always be ready to study whenever a free minute or two pops up. Too many people take 30 minutes just to get ready to study. Everything has to be aligned perfectly. You can’t do that. You always have to be ready to get some work done if you have even the slightest chance. Always carry note cards in your pocket, for example. When a free moment shows up, pull them out and start reviewing. Or, for a small fee, you can download all of our questions and answers. Carry them with you at all times and if you have even one minute, that is a perfect chance to work a question or two.
--“I mean to study but somehow it never happens. Each day is the same – I’m a person with good intentions.”
At the start of every day, write down exactly when you are going to study and for how long. Then, when those times arise, stop everything else and make it happen. Nothing beats a schedule. If you say “at 7:30 in the morning, I’m going to study for 30 minutes before I head to work” then that should be an absolute necessity. If you say “at 5:00 each evening, I’m going to study for 45 minutes before I start to cook dinner” then you must not let that time slip by. Set the schedule and then hold yourself to that schedule.
I was talking with a friend of mine the other day and he mentioned the seminal work by Booker T. Washington “Up From Slavery” which was his autobiography, published 110 years ago. My friend had read it recently and mentioned one line that had made a real difference to him: "I have learned that success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome while trying to succeed."
YOU can do it!
---------------------------
Lesson 101—In this lesson--Points to Pass New Demo, More Survey Results, Grading Changes in 2011, A word from Joe
From: Lynn (No, Joe hasn't gone anywhere!)
POINTS TO PASS NEW DEMO
Ready to try Points to Pass? Not sure what it is or how it works? We thought you might like to give Points to Pass a try since it's not like any other CPA review product. Go to our store, scroll down to Points to Pass and click on the link "Example PtP Question". That's it! You'll work an UNLIMITED number of questions based on just that one demo question until you get the concept down perfectly.
If you like what you see, it is only one dollar per day for all 250 Points to Pass questions! For an infinite number of questions. Yep, $29.99 per month.
MORE SURVEY RESULTS
A tip to see our site in a larger font size: Open up your browser to CPAreviewforFREE and press the Control and "+" keys again and again to zoom in. No, you don't have to hit the Shift key to achieve the upper case "+".
Many of you mentioned that there's no phone number on the website to contact us and felt that we lose a bit of legitimacy because of it. We also have a 98% customer satisfaction rate with our current email support system and we run a very tight ship to keep prices down which we pass along to you!
GRADING CHANGES AS OF JAN 2011
You may or may not be aware of the grading changes that took effect in January 2011. Because they moved all the written communication questions to BEC, they had to change that. You can find everything about scoring now here.
WORDS FROM JOE
You might find this interesting. On one particular day recently, we measured our traffic by city. We were interested in learning where people came from who used our materials. Here are the top eight:
--New York City
--Hyderabad, India
--Chicago
--Washington, DC
--Los Angeles
--Houston
--San Francisco
--Philadelphia
Wherever you are, we are glad you are with us.
I love what Michael Jordan had to say: “Obstacles don't have to stop you. 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.”
Does this sound like you?
--“I simply cannot find the time to study.”
Always be ready to study whenever a free minute or two pops up. Too many people take 30 minutes just to get ready to study. Everything has to be aligned perfectly. You can’t do that. You always have to be ready to get some work done if you have even the slightest chance. Always carry note cards in your pocket, for example. When a free moment shows up, pull them out and start reviewing. Or, for a small fee, you can download all of our questions and answers. Carry them with you at all times and if you have even one minute, that is a perfect chance to work a question or two.
--“I mean to study but somehow it never happens. Each day is the same – I’m a person with good intentions.”
At the start of every day, write down exactly when you are going to study and for how long. Then, when those times arise, stop everything else and make it happen. Nothing beats a schedule. If you say “at 7:30 in the morning, I’m going to study for 30 minutes before I head to work” then that should be an absolute necessity. If you say “at 5:00 each evening, I’m going to study for 45 minutes before I start to cook dinner” then you must not let that time slip by. Set the schedule and then hold yourself to that schedule.
I was talking with a friend of mine the other day and he mentioned the seminal work by Booker T. Washington “Up From Slavery” which was his autobiography, published 110 years ago. My friend had read it recently and mentioned one line that had made a real difference to him: "I have learned that success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome while trying to succeed."
YOU can do it!
---------------------------
Tuesday, August 2, 2011
CPAreviewforFREE Survey Results, New Practice Questions, Points to Pass
CPAreviewforFREE--Try us FIRST before you spend your hard-earned money.
Lesson 100—In this lesson--Some Survey Results, New Points to Pass Launch, Motivation, Study Aids, 4 New Practice Questions
From: Joe
SURVEY RESULTS
THANKS to everyone who took a minute to answer our CPAreviewforFREE survey. We’ll be commenting on additional results in future newsletters. Here’s one thing we discovered immediately:
A 94% approval rating. 76% of the respondents said that the quality of our content was better or the same than the other review programs they had used while another 18 percent said that we were the only review program they had used. That is a pretty impressive statistic.
One of the comments we received from Question 8 of the survey: “I have no suggestion but I will say your questions helped me pass all 4 parts on the first try. I have recommended your site to many people. You have done an excellent job.”
Gosh, that is great to hear.
POINTS TO PASS LAUNCH
We have been having great success with our new Points to Pass product designed specifically for FAR. You still have 622 free FAR questions and answers available for use at any time at www.CPAreviewforFREE.com. However, I personally selected 250 of the most important of those FAR questions. We then built the Points to Pass software program that would constantly change those 250 questions and make them 2,500 questions or even 2,500,000 questions. Computers do marvelous things. Here’s the great part: You can work those especially important questions as many times as you like until you can do them in your sleep.
You can take each question and work it over and over with different numbers and different variables until you know the process backwards and forwards.
Or, you can go to any FAR category (Financial Statement Structure of Not-for-Profit Organizations as just one example) and keep working questions in that category for hours and days and even weeks. The computer program will keep changing the numbers and other variables of the questions I selected and then feed each new question to you until you have the whole category down perfectly.
Countless questions by individual question.
Countless questions by individual category.
I have always argued that the very very very best way to pass the CPA Exam is to work questions and read answers. Everything else does help but working questions and reading answers is the best. Do that one thing long enough and you’ll pass. However, UNTIL NOW, there has not been a way to have enough good questions available to work. People run out of questions pretty quickly in every program. But Points to Pass solves that problem by providing an infinite number of variations to the 250 most important questions in FAR.
And it is only one dollar per day. Yep, $29.99 per month. For an infinite number of FAR questions.
WORDS TO STUDY BY
I was talking with a friend of mine the other day and he mentioned the seminal work by Booker T. Washington “Up From Slavery” which was his autobiography, published 110 years ago. My friend had read it recently and mentioned one line that had made a real difference to him: "I have learned that success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome while trying to succeed."
We are halfway through the July-August testing window for the CPA Exam. I realize that a lot of people who read these email lessons are gearing up to take part of the exam before the end of August.
It can be a tense time.
Many of you are worrying about passing or failing. Worry can become a constant mental distraction. As I have said often in these emails, I think your worry is misplaced. If it were me, I wouldn’t allow the words “pass” or “fail” into my vocabulary. I would worry, but only about one specific thing: adding points. How can you add a point or two today? Any other question or any other goal is probably unimportant. That should be the first thing you think about when you wake up in the morning and the last thing you evaluate when you go to sleep at night.
However, my friend’s comment from “Up From Slavery” made me start thinking about the obstacles we all face when pushing to achieve success. What obstacles do you face in your quest to pass the CPA Exam? And, what can you do to overcome those obstacles?
Maybe it is not the CPA Exam that is the problem. Maybe it is the obstacles you face each day. Maybe you let them stop you. Maybe you let them keep you from success.
Here are a couple obstacles that are pretty common in CPA Review.
--“By the time I finish all my work, I’m too tired to study.”
If possible, study first and then do your other work when you begin to get tired. Sweeping the floor can be done when you are half asleep but studying can’t. Unloading the dishwasher can be done without being too alert but studying can’t. Washing out the bath tub doesn’t take many brain cells but studying does.
--“There are just not enough hours in the day for me to do everything and get in my study time.”
Take a moment each day to evaluate what you really “must do.” People often structure their lives to stay incredibly busy. Then, when they try to add something important like the CPA Exam, there just doesn’t appear to be any available time. Perhaps some of those things that you’ve added to your life can be delayed a bit until the exam is passed. Do you have to water your plants every day or can you make it every third day? Do you have to dust your furniture quite so often? Do you have to go to the gym every single day? Can you grocery shop once a week rather than twice? When you are studying for the CPA Exam, it is not a bad idea – before you do anything other than study – to ask yourself “can this task be delayed for a day?” Yeah, there are things you really must do but not everything you do each day is a “must do.”
Think about your obstacles – those things in your life that keep you from putting in the time and effort needed to pass the CPA Exam. Then, figure out how to work your way around those obstacles. You can do it!! That is the mark of success.
STUDY AIDS
When you are working questions on www.CPAreviewforFREE.com, keep a list of all the questions you miss. Keep that list in two columns. One column is for all questions that you miss because there was some part of the question that you didn’t know. The other column is for all questions that you miss because you were careless. You read a word wrong or missed a computation or you started working before you read the entire question.
It is especially important that you train yourself to keep the “careless list” at close to zero. Over time, as you study and practice, the “don’t know list” will go down automatically. However, the “careless list” is based entirely on your ability to stay focused and pay attention. You want to train your mind and your eyes to read all of the questions and pick out the important data and put them together. If you allow yourself to be sloppy while you study, that habit will carry over into the actual exam. So, stop being careless.
Don’t let yourself pick up bad habits. Don’t let yourself get used to missing questions because you are being careless. That is an awful habit. When it comes to that one attribute of the CPA Exam, don’t settle for 75. Shoot for 100 or, in other words, as you study work to have no questions at all missed because of carelessness.
PRACTICE TIME
Let’s see if we can add four points to your scores.
FAR
The Potter Corporation has been in business for four years. The completed contract method has been used for all of those years to recognize revenue on construction projects. At the end of the fourth year, company officials decide to change to the percentage of completion method. That method would have increased income in the first three years by $80,000 and in Year Four by $30,000. How is this change in accounting principle reported?
A. Retroactively – the reported income for the first three years is increased by $80,000.
B. Currently – only the $30,000 amount for the current year is changed.
C. Cumulatively – the entire $110,000 income effect is recognized in the current year.
D. In the future – no changes are made until next year
Answer is A
This change is a change in an accounting principle. Most changes in accounting principle (such as this one) are handled retroactively. The previously reported numbers are changed to align them with the new principle. A change in an accounting estimation is different. It is handled currently and then into the future.
Auditing
The Malfoy Company makes a huge purchase of inventory near the end of Year Two that is shipped to the company on December 30, Year Two. It is sent FOB shipping point. However, no record is made of this inventory until it is received on January 9, Year Three. In looking at the company’s Year Two financial statements, which of the following is most likely to alert the auditor that a recording error has occurred?
A. The Year Two current ratio is much higher than the Year One current ratio
B. The Year Two gross profit is much lower than the Year One gross profit
C. The Year Two inventory turnover is much higher than the Year One inventory turnover
D. The Year Two working capital is much lower than the Year One working capital
Answer is C
Nothing has been recorded in Year Two even though the goods (and the related debt) belong to Malfoy because of the FOB point. The goods were not received in Year Two and, therefore, could not have been sold. Cost of goods sold was not affected by the purchase and, thus, the gross profit is correctly stated. There are only two mistakes. Inventory is too low and accounts payable is also too low by the same amount. Those mistakes offset so that both working capital and the current ratio are also correctly reported. However, inventory turnover is cost of goods sold divided by the average inventory for the period. If inventory was too low at the end of Year Two, then the average inventory will also be too low. Therefore, since cost of goods sold is correctly stated, the inventory turnover will be too high.
Regulation
Owners of the Granger Partnership have decided to liquidate and go out of business. Hermione is one of the partners who holds a partnership interest of $5,000. The only thing she receives from the liquidation is a machine with a book value of $7,000 but a fair value of $7,600. Hermione held a 20 percent ownership in the partnership. What gain does Hermione recognize for tax purposes on the receipt of this liquidation distribution?
A. Zero
B. $1,520
C. $2,000
D. $2,600
Answer is A
Normally, in a partnership liquidation where the partner only receives nonmonetary assets, the partner picks up the new property at the basis of the old partnership so that no gain is recognized. Therefore, Hermione will record the machine on her tax records as having a basis of $5,000. The old partnership basis of $5,000 goes away and is replaced by a new basis for the machine of $5,000. There is no difference so there is no taxable gain.
BEC
The Weasley Company takes 77 days on the average to sell its inventory. It takes 43 days on the average to pay for that inventory. It takes 52 days on the average to collect the money from a sale. For the Weasley Company, what is the cash conversion cycle?
A. 68 Days
B. 86 Days
C. 129 Days
D. 172 Days
Answer is B
The cash conversion cycle is the number of days that it takes a company to buy inventory and pay for it and then sell it and collect the money. Therefore, it is the time that it takes to sell inventory less the time it takes to pay for the inventory plus the time it takes to collect the resulting account receivable. Here, that would be 77 days less 43 days plus 52 days or 86 days.
August is ready to start – make it a great month. Make it the month that you study for and pass the next part of the CPA Exam.
Lesson 100—In this lesson--Some Survey Results, New Points to Pass Launch, Motivation, Study Aids, 4 New Practice Questions
From: Joe
SURVEY RESULTS
THANKS to everyone who took a minute to answer our CPAreviewforFREE survey. We’ll be commenting on additional results in future newsletters. Here’s one thing we discovered immediately:
A 94% approval rating. 76% of the respondents said that the quality of our content was better or the same than the other review programs they had used while another 18 percent said that we were the only review program they had used. That is a pretty impressive statistic.
One of the comments we received from Question 8 of the survey: “I have no suggestion but I will say your questions helped me pass all 4 parts on the first try. I have recommended your site to many people. You have done an excellent job.”
Gosh, that is great to hear.
POINTS TO PASS LAUNCH
We have been having great success with our new Points to Pass product designed specifically for FAR. You still have 622 free FAR questions and answers available for use at any time at www.CPAreviewforFREE.com. However, I personally selected 250 of the most important of those FAR questions. We then built the Points to Pass software program that would constantly change those 250 questions and make them 2,500 questions or even 2,500,000 questions. Computers do marvelous things. Here’s the great part: You can work those especially important questions as many times as you like until you can do them in your sleep.
You can take each question and work it over and over with different numbers and different variables until you know the process backwards and forwards.
Or, you can go to any FAR category (Financial Statement Structure of Not-for-Profit Organizations as just one example) and keep working questions in that category for hours and days and even weeks. The computer program will keep changing the numbers and other variables of the questions I selected and then feed each new question to you until you have the whole category down perfectly.
Countless questions by individual question.
Countless questions by individual category.
I have always argued that the very very very best way to pass the CPA Exam is to work questions and read answers. Everything else does help but working questions and reading answers is the best. Do that one thing long enough and you’ll pass. However, UNTIL NOW, there has not been a way to have enough good questions available to work. People run out of questions pretty quickly in every program. But Points to Pass solves that problem by providing an infinite number of variations to the 250 most important questions in FAR.
And it is only one dollar per day. Yep, $29.99 per month. For an infinite number of FAR questions.
WORDS TO STUDY BY
I was talking with a friend of mine the other day and he mentioned the seminal work by Booker T. Washington “Up From Slavery” which was his autobiography, published 110 years ago. My friend had read it recently and mentioned one line that had made a real difference to him: "I have learned that success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome while trying to succeed."
We are halfway through the July-August testing window for the CPA Exam. I realize that a lot of people who read these email lessons are gearing up to take part of the exam before the end of August.
It can be a tense time.
Many of you are worrying about passing or failing. Worry can become a constant mental distraction. As I have said often in these emails, I think your worry is misplaced. If it were me, I wouldn’t allow the words “pass” or “fail” into my vocabulary. I would worry, but only about one specific thing: adding points. How can you add a point or two today? Any other question or any other goal is probably unimportant. That should be the first thing you think about when you wake up in the morning and the last thing you evaluate when you go to sleep at night.
However, my friend’s comment from “Up From Slavery” made me start thinking about the obstacles we all face when pushing to achieve success. What obstacles do you face in your quest to pass the CPA Exam? And, what can you do to overcome those obstacles?
Maybe it is not the CPA Exam that is the problem. Maybe it is the obstacles you face each day. Maybe you let them stop you. Maybe you let them keep you from success.
Here are a couple obstacles that are pretty common in CPA Review.
--“By the time I finish all my work, I’m too tired to study.”
If possible, study first and then do your other work when you begin to get tired. Sweeping the floor can be done when you are half asleep but studying can’t. Unloading the dishwasher can be done without being too alert but studying can’t. Washing out the bath tub doesn’t take many brain cells but studying does.
--“There are just not enough hours in the day for me to do everything and get in my study time.”
Take a moment each day to evaluate what you really “must do.” People often structure their lives to stay incredibly busy. Then, when they try to add something important like the CPA Exam, there just doesn’t appear to be any available time. Perhaps some of those things that you’ve added to your life can be delayed a bit until the exam is passed. Do you have to water your plants every day or can you make it every third day? Do you have to dust your furniture quite so often? Do you have to go to the gym every single day? Can you grocery shop once a week rather than twice? When you are studying for the CPA Exam, it is not a bad idea – before you do anything other than study – to ask yourself “can this task be delayed for a day?” Yeah, there are things you really must do but not everything you do each day is a “must do.”
Think about your obstacles – those things in your life that keep you from putting in the time and effort needed to pass the CPA Exam. Then, figure out how to work your way around those obstacles. You can do it!! That is the mark of success.
STUDY AIDS
When you are working questions on www.CPAreviewforFREE.com, keep a list of all the questions you miss. Keep that list in two columns. One column is for all questions that you miss because there was some part of the question that you didn’t know. The other column is for all questions that you miss because you were careless. You read a word wrong or missed a computation or you started working before you read the entire question.
It is especially important that you train yourself to keep the “careless list” at close to zero. Over time, as you study and practice, the “don’t know list” will go down automatically. However, the “careless list” is based entirely on your ability to stay focused and pay attention. You want to train your mind and your eyes to read all of the questions and pick out the important data and put them together. If you allow yourself to be sloppy while you study, that habit will carry over into the actual exam. So, stop being careless.
Don’t let yourself pick up bad habits. Don’t let yourself get used to missing questions because you are being careless. That is an awful habit. When it comes to that one attribute of the CPA Exam, don’t settle for 75. Shoot for 100 or, in other words, as you study work to have no questions at all missed because of carelessness.
PRACTICE TIME
Let’s see if we can add four points to your scores.
FAR
The Potter Corporation has been in business for four years. The completed contract method has been used for all of those years to recognize revenue on construction projects. At the end of the fourth year, company officials decide to change to the percentage of completion method. That method would have increased income in the first three years by $80,000 and in Year Four by $30,000. How is this change in accounting principle reported?
A. Retroactively – the reported income for the first three years is increased by $80,000.
B. Currently – only the $30,000 amount for the current year is changed.
C. Cumulatively – the entire $110,000 income effect is recognized in the current year.
D. In the future – no changes are made until next year
Answer is A
This change is a change in an accounting principle. Most changes in accounting principle (such as this one) are handled retroactively. The previously reported numbers are changed to align them with the new principle. A change in an accounting estimation is different. It is handled currently and then into the future.
Auditing
The Malfoy Company makes a huge purchase of inventory near the end of Year Two that is shipped to the company on December 30, Year Two. It is sent FOB shipping point. However, no record is made of this inventory until it is received on January 9, Year Three. In looking at the company’s Year Two financial statements, which of the following is most likely to alert the auditor that a recording error has occurred?
A. The Year Two current ratio is much higher than the Year One current ratio
B. The Year Two gross profit is much lower than the Year One gross profit
C. The Year Two inventory turnover is much higher than the Year One inventory turnover
D. The Year Two working capital is much lower than the Year One working capital
Answer is C
Nothing has been recorded in Year Two even though the goods (and the related debt) belong to Malfoy because of the FOB point. The goods were not received in Year Two and, therefore, could not have been sold. Cost of goods sold was not affected by the purchase and, thus, the gross profit is correctly stated. There are only two mistakes. Inventory is too low and accounts payable is also too low by the same amount. Those mistakes offset so that both working capital and the current ratio are also correctly reported. However, inventory turnover is cost of goods sold divided by the average inventory for the period. If inventory was too low at the end of Year Two, then the average inventory will also be too low. Therefore, since cost of goods sold is correctly stated, the inventory turnover will be too high.
Regulation
Owners of the Granger Partnership have decided to liquidate and go out of business. Hermione is one of the partners who holds a partnership interest of $5,000. The only thing she receives from the liquidation is a machine with a book value of $7,000 but a fair value of $7,600. Hermione held a 20 percent ownership in the partnership. What gain does Hermione recognize for tax purposes on the receipt of this liquidation distribution?
A. Zero
B. $1,520
C. $2,000
D. $2,600
Answer is A
Normally, in a partnership liquidation where the partner only receives nonmonetary assets, the partner picks up the new property at the basis of the old partnership so that no gain is recognized. Therefore, Hermione will record the machine on her tax records as having a basis of $5,000. The old partnership basis of $5,000 goes away and is replaced by a new basis for the machine of $5,000. There is no difference so there is no taxable gain.
BEC
The Weasley Company takes 77 days on the average to sell its inventory. It takes 43 days on the average to pay for that inventory. It takes 52 days on the average to collect the money from a sale. For the Weasley Company, what is the cash conversion cycle?
A. 68 Days
B. 86 Days
C. 129 Days
D. 172 Days
Answer is B
The cash conversion cycle is the number of days that it takes a company to buy inventory and pay for it and then sell it and collect the money. Therefore, it is the time that it takes to sell inventory less the time it takes to pay for the inventory plus the time it takes to collect the resulting account receivable. Here, that would be 77 days less 43 days plus 52 days or 86 days.
August is ready to start – make it a great month. Make it the month that you study for and pass the next part of the CPA Exam.
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