Try us FIRST before you spend your hard-earned money.
Over 2,400 FREE CPA Review Questions and Answers Available to YOU (for FREE)
August 30, 2013
Lesson 138
August 30, 2013
Lesson 138
From: Joe
Last Minute Push
I know that the end of the July-August testing window is fast approaching. If you are scheduled to take a section of the CPA Exam in the next week or so, I have two pieces of advice. First, put in all the time you can. Every minute that you study is another possible point. Every minute that you study gets you closer to your goal of 75 points. Picture that goal out in front of you and feel yourself pushing toward that goal. Second, do not get too tired out. Yes, you want to study as much as you can but, at the same time, be very aware of your own energy levels. No matter how much you know, you are not going to pass the CPA Exam if you are exhausted. When you need a break, take it. Get some exercise every day if it is merely walking around the block. We here at CPAreviewforFREE want you (yes, YOU) to pass this exam and get on with your life.
--Keep pushing, work for every possible point.
--Watch your energy levels and make sure they are high.
As always, we love hearing from you about your experiences with the CPA Exam and your use of CPAreviewforFREE. Plus, if the testimonial in the box to the right doesn’t make you want to go try out our website, then you have more money in your pocket than you need. Here's another one to show you can do it.
From SI:
Wow. This is just an amazing prep tool. And it has definitely helped me in better understanding of the concepts and more importantly helped me in focusing on the most important topics. It has helped me clear my exams.
Keeping All the Balls in the Air
When my students here at the University start to struggle, they will often come by my office for a discussion of how they can do better. One of the most common problems is that they are involved in more activities than seems humanly possible: they are full-time students, they belong to a sorority or fraternity, they are involved in clubs, they have a part-time job, they are involved in personal projects, they have families and friends to keep up with. On top of all that, they are often severely stressed out by trying to keep all of those things balanced.
Our world has become one of multi-tasking. People try to cram more into their lives by doing 4 or 5 different things at once. I can hardly blame them because I multi-task myself. Technology simply offers us the possibility of doing a great many things at one time.
When I talk with my students, I often tell them the following story. A circus will often have one or more jugglers. These folks will frequently juggle balls – baseballs or tennis balls or the like. Until they practice and improve, each of these entertainers will have a limit as to the number of balls they can juggle. One person might be a “4-ball juggler” and another might be a “5-ball juggler” to indicate their maximum ability at the moment. A 4-ball juggler can successfully juggle four balls.
I then look at the student and ask a very simple question: “Do you know what happens when you toss a 6th ball to a five-ball juggler?”
Over the years, I have never yet had an incorrect answer to this question. The student will get quiet and say in a whisper “I guess the person drops all of the balls.”
Exactly. 100 percent correct. If you try to juggle too many balls, you don’t just drop the last one, you drop them all.
I wait a few seconds for dramatic effect and then ask “So, what’s the point of that story? Am I trying to get you to run off and join the circus?”
And, again, I find the students know the answer “I am trying to juggle so many things in my life that I am not doing a very job with any of them.”
That is exactly the problem with multi-tasking. Technology can be such a wonderful help and make you so much more efficient. But, if you grab one ball too many, they all come crashing down. One extra ball and you lose them all.
The CPA Exam is a very big ball. When you start planning to add preparation for the CPA Exam into your life, you need to consider the consequences. If you are lucky and if you study hard, you can probably get through the CPA Exam in 6-18 months. That is a very reasonable goal. But during that period of time, you are adding a very big ball into your life’s juggling act. If you are not careful with that additional ball, you will drop all of the balls.
What is the answer? More...
Self-Discipline and Getting it Done
On Tuesday morning, Elmore Leonard, one of my very favorite authors died. He wrote many wonderful books such as Get Shorty, Rum Punch, Out of Sight, LaBrava, Maximum Bob, andThree-Ten to Yuma. More recently, Leonard was involved with the hit TV show "Justified". It is based on Elmore Leonard's novels Pronto and Riding the Rap and his short story Fire in the Hole. The shows's creator even gave the writing staff a WWED bracelet meaning What Would Elmore Do. He was 87 and had recently suffered a stroke so his death was not unexpected.
Leonard had an interesting start to his career. He was apparently successful in the world of advertising but, instead, he wanted to be a writer. He wanted something different than what he had. In one of the newspaper stories about his life, the following was related:
“Famously, Leonard started writing Western-themed novels from 5-7 a.m. at home before going to work at the Campbell-Ewald agency, where Chevrolet trucks was one of his accounts. He developed a ferocious work ethic, writing every day in a bleak, cinder block basement office in their Lathrup Village home that son Peter described as looking like a prison cell. After he quit advertising, he kept up the discipline in his monk-like office, writing from 10 a.m. to 6 p.m. without a lunch break.”
What caught my eye about this story?
--He wanted to reach his goal so badly that he was willing to get up and work from 5 until 7 each morning before going off to a full day of work in a difficult industry. He sacrificed sleep just for the possibility of becoming a writer.
--He wanted to reach his goal so badly that, even after he became successful, he locked himself away in isolation for 8 hours each day and kept working.
Yes, Elmore Leonard became a famous writer but he would have never achieved that goal without the capacity for what I call “sitting down and getting it done.”
It seems to me that if you want to become successful on the CPA Exam (or anything else), there are two truly important keys. More...
VOTE for CPAreviewforFREE
CPAreviewforFREE has a goal, but need your support. Please votefor us for the chance to have a commercial spot on SuperBowl 2014! You can vote everyday for us which should be easy for you because you will be on our website working the free mcqs. Just click on the orange VOTE banner ad on the right side of the page which will bring you directly to the VOTE page. Thanks!
Practice time
Speaking of work. Let’s do some. Here are four questions. If you get them right, that is nice but it does not add much to your knowledge. But, if you get them wrong, spend some time making sure you would be able to get those questions right the next time you see them. The answers are at the end.
FAR
The City of Bardot is producing a comprehensive annual financial report (CAFR). Within the CAFR, the city is preparing government-wide financial statements. Which two statements now compose the government-wide financial statements?
a. Balance sheet and statement of revenues and expenses
b. Statement of net position and statement of activities
c. Statement of financial condition and statement of revenues, expenditures and other changes
d. Statement of financial resources and statement of changes in fund balance
Auditing and Attestation
The CPA firm of Wilson and Pickett has finished the audit of Eastern South Corporation (ESC). ESC is not viewed as an issuer of securities. Its stock is not publicly trade. The company has no debts or the like that are publicly traded. The CPA firm is now preparing an unmodified audit opinion. Which of the following is described in the opening paragraph of that report?
a. The auditor’s responsibility and the management’s responsibility are both described.
b. The term “audit” is defined.
c. The audited financial statements are identified.
d. An indication is made of the auditing standards that were followed.
Regulation
James Joyce decides to create a business and is advised by his CPA to structure the business as an S corporation. He will be the sole owner. Joyce transfers equipment to the business to help get it started. This equipment has been kept in excellent working condition and is worth $32,000 although it has a tax basis to Joyce of only $18,000. The equipment is subject to a loan of $23,000, a debt which will be taken over by the S corporation. What taxable gain must James Joyce recognize on this conveyance?
a. Zero
b. $5,000
c. $9,000
d. $23,000
BEC
William J. Bryan is looking at a demand curve for widgets. In the study of economics, what does this demand curve represent?
a. The change in the quantity of widgets produced as the price of widgets changes.
b. The change in the quantity of widgets purchased as the price of widgets changes.
c. The change in the quantity of widgets offered to the market as the price of widgets changes.
d. The change in the manufacturing capacity for widgets as the price of widgets changes.
You are closing in on the end of the July-August testing window. If you are getting ready to take the exam before September, put in all the time you can but don’t become exhausted. You always want to be mentally and physically fresh when you walk in to take the CPA Exam.
Answers
FAR
Answer is B
GASB has recently created two new types of accounts. A deferred outflow of resources is usually a cost that does not qualify as an asset. A deferred inflow of resources is usually a monetary inflow that is neither a liability nor revenue. Previously, when only assets and liabilities were recognized, a statement of net assets (assets minus liabilities) had been reported in the government-wide financial statements. With more types of accounts, GASB decided “net assets” was no longer appropriate and changed it to “net position.” The statement of activities shows how the government’s net position changed during the reporting period.
Auditing and Attestation
Answer is C
Recently, the unmodified audit report for a non-public company has been changed. The opening, or introductory, paragraph simply identifies the financial statements that were examined. Other paragraphs outline the responsibilities of the parties, identify the standards that were followed, and describe the nature and scope of an audit.
Regulation
Answer is B
James Joyce loses his interest in the equipment with its $18,000 tax basis. However, he also loses the $23,000 related debt. From a tax perspective, because of these conveyances, he is personally better off by $5,000. That improvement in personal financial position creates a taxable gain of $5,000.
BEC
Answer is B
A demand curve looks at consumer behavior by measuring how many items will be purchased as the available price goes up or down. On the other hand, production decisions are reflected in a supply curve.
Joe Hoyle
President and Co-Founder
CPA Review for FREE
