What Do Marbles Have to Do with Passing the CPA Exam?; Question Tutorial

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Lesson 159, February 3, 2015

 

From:   Joe

 

It is hard to do the work that is necessary in order to pass the CPA Exam

 

What do you really need to do in order to have a great chance to pass the CPA Exam in 2015?   I am a big believer that when the CPA Exam changed to a computerized exam in 2004, the way to prepare needed to change.   The exam today rewards “works a lot of questions” more than it rewards “learns a lot of material” with the paper and pencil exam (and the pass rate jumped from about 34 percent to about 50 percent).

 

We offer over 2,500 questions covering all parts of the CPA Exam.   We hear from people all the time who pass the exam by working those questions.   I have long recommended that if you work every question twice and pay close attention to the answers for the ones you miss, you have a great chance to pass the CPA Exam without paying a single penny.   Can you imagine?  

 

But you cannot just talk about working the questions.   You have to sit there and actually do the work.  As you have heard me say so many times in these emails, HOURS = POINTS.   There is no short cut.   You have to put in the time.  

 

We all know that.   The only question is how should you (yes, YOU --- not some other person) go about putting in those hours?   I want to offer two suggestions that I think can help. 

 

First, set up a calendar and decide how many hours you plan to study each day.   It is even better if you can identify the specific time you are going to study.    If you just say “I’ll study when I have enough time,” you will never have enough time.   If you just say “I’ll study when I feel like it,” you will never feel like it.

 

If you have always been an average student and want to become a great student, the first thing to keep in mind is the importance of planning.

 

--When are you going to take your next part of the CPA Exam?

--How many total hours do you want to study for that next part?   I always recommend 60-100.   I don’t think you can make a perfect score with 60-100 hours but most people can pass with that much intense study and that is the only goal you should have.   How many hours do you plan to study?

--How many days do you plan to study during that period of time?   People rarely are able to study every day so do you plan to study 4 days per week or five or maybe six?

 

Now, the easy part.   More…

 

What Do Marbles Have to Do with Passing the CPA Exam?

 

One more comment about the previous message.   It is always helpful to work on your own motivation.   So, let’s assume that you are going to push to do 72 hours for your next part of the exam.   Get two jars and 72 marbles.   Put the marbles in one of the jars and label it “WORK NEEDED TO PASS.”    Label the other jar “WORK DONE” and every time you complete an hour of study, move one marble from the first jar to the second.   There is something about seeing the first jar gradually empty and the second jar gradually fill up that will really make you feel good and will help keep your motivation levels high.

 

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Prepare for the CPA Exam As If You are Preparing for the Super Bowl

 

– As I write this right now, the Super Bowl is scheduled to be played in about four hours.   Of course, it is always exciting to watch teams like New England and Seattle play.

But I’m always left with three questions:

 

– I wonder how much good sitting on a couch for four hours watching a bunch of rich people (people I don’t know) play a game does me.   Those players get a great work out and lots of money and I get fatter and older while I sit here.   I am not trying to be a grinch but I wonder why I prefer to watch rather than do.   The excitement in life comes from doing, not from watching other people do.

 

– I wonder if Tom Brady and Richard Sherman and Russell Wilson would be willing to sit around for four hours on a Sunday evening and watch me take the CPA Exam and cheer me on.   Somehow I doubt it.   I think I care for those players more than they care about me.   I wonder why I care so much about someone else’s success.   Why am I not more excited about my own possible success?

 

– I wonder how those two teams and those players managed to get to the Super Bowl.   There are dozens of professional teams and some of those other teams were excellent this season.   Why did these two teams make it all the way?    My guess is that if you went up and asked any of the players on either team they would say something like “we just worked harder than everyone else.   Hour after hour we worked to be the best we could be.   Starting back in the summer, we spent so much time getting ourselves into perfect mental and physical condition for this game.  Yes, we have a lot of talent but that talent doesn’t do much good unless you have the will necessary to put in the hours and hours of practice.”

 

My last point there is pretty obvious.  We all recognize that winning and success takes incredible discipline, a discipline necessary to do all that work.   However, it is harder for us to see that in our own lives.   We look for shortcuts.   We try to get favors.   We pray for luck.   We make excuses.

 

No.   It just doesn’t work that way.   I cannot guarantee you success by working harder but I honestly believe your chances go up every time you work another problem and read the answer.   Start right now.   How many hours do you want to study today and when are you going to make it happen?   How many hours do you want to study tomorrow and when are you going to make it happen?

 

We all want to be winners.   Time to get started and make that happen.

 

Walk Through an AUD Analytical Procedures Question with Joe

 

I was looking through my computer files this afternoon and found this videofrom last summer that talks about how to answer an AUD question about analytical procedures.   Never a bad idea to see how questions should be answered on the CPA Exam.

 

 

 

Joe

Success is Not How Much More Money You Spend; Free Practice Questions

Try us FIRST before you spend your hard-earned money. CPA Review for FREE OVER 2,500 FREE CPA Review Questions and Answers Available to YOU (for FREE) March 3, 2015 Lesson 160 From:   Joe Success is Not on How Much Money You Spend It is snowing here in Richmond, Virginia, today.   We have at least 6 inches of snow on the ground.  It is cold and still snowing.   So, I have a day that I can use.   I am stuck here at the house.   How should I spend my time?   I have decided to talk with you about how to achieve success on the CPA Exam.   For me, that’s an extremely good use of time.   After being in the CPA Review business now for 35 years, what is my advice to you?   Not the person beside of you, or the person in front of you, or the person behind you.   No, what is my advice to you? This morning my wife and I were having breakfast at our kitchen table.   The newspaper did not arrive so she was reading from her iPad.   “Here is something” she informed me “that sounds like advice that you might pass along to CPA Exam candidates.” It was a few words from John C. Maxwell.   And, she was right.   This is what I want to say to you today. “You’ll never change your life until you change something you do daily.   The secret of your success or happiness is found in your daily routine.”   At the university, I am always amazed by how many students want to make better grades without making any changes in their study habits.   --Study a little, make a bad grade.   --Study a little, make a bad grade.   Then, they come to me, often in tears, and confess “I guess I am just not cut out for this accounting stuff.”   That’s pure nonsense.   No one ever makes improvement without making change.   And that improvement will be much more effective if it becomes part of your daily regimen.   I have always argued that I could help anyone learn to pass the CPA Exam but that is true only if the person is willing to change. Let’s say that you are planning to take a part of the CPA Exam at the beginning of April—in about five weeks.  However, you’ve already failed that part previously.   And, you don’t see how you can improve.   You are stalled.   You are sure you are going to fail yet again.   Unfortunately, for most candidates, their next response seems to be:   SPEND MORE MONEY.   They assume that they need another expensive study program that will show them exactly the same information that the last expensive program provided.   That’s not a change.   It is just throwing money away. Success is not based on how much money you spend.   Success is based on how efficiently you spend your moments on this planet.   If things are not going as you would prefer, YOU MUST MAKE A CHANGE.   Daily life should be built in such a way as to bring you the success that you truly want.   If you are not willing to change, you probably don’t really want the success. So, what is my advice?   First,  Need more help passing the exam at a very competitive price?  Look no further.  Please check out our CPA review course partner, Fast Forward Academy.  Their materials include videos, textbooks, apps, study schedule, intelligent learning to help identify your weak spots.                                      Super – now let’s do a little practice    Answering questions and reading answers is always the perfect way to add points.  The answers are below all questions. FAR The Allen Company reports the disposal of a discontinued operation in its financial statements.   Which of the following is least likely to qualify for that type of financial reporting? A.   The sale of a subsidiary. B.   The sale of all businesses within a major geographical area C.   The sale of a major line of business D.   The sale of a major equity method investment. REGULATION Susan James has graduated from college and is now paying off her student loans.   This past year, she paid interest on those loans and plans to take this interest as a deduction to arrive at her adjusted gross income for federal income tax purposes.   Which of the following is true? A.   The interest can relate to the cost of tuition but not room and board. B.   The interest can relate to the cost of room and board but not books and supplies C.   The interest can relate to the cost of tuition but not books and supplies. D.   The interest can relate to both the cost of tuition and books and supplies. AUDITING According to the standards of the Public Company Accounting Oversight Board, which of the following is not a reason for the independent auditor to establish an understanding with the audit committee of the client company in connection with the appointment or retention of the independent auditor? A.   To communicate the objective of the audit B.   To communicate the cost of the audit C.   To communicate the responsibilities of the auditor D.   To communicate the responsibilities of the management of the reporting entity. BEC The Logan Corporation produced 1,000 widgets during the past year at a total cost of $165,000.   After the job had been completed, an inspection indicated that 100 of these units were seriously defective and would have to be destroyed with no residual value.   Which of the following is true? A.   If the spoilage of these 100 units was considered abnormal, the cost of the company’s inventory should be recorded at an amount greater than $165 per unit. B.   If the spoilage of these 100 units was considered abnormal, the cost of the company’s inventory should be recorded at an amount less than $165 per unit. C.   If the spoilage of these 100 units was considered normal, the cost of the company’s inventory should be recorded at an amount greater than $165 per unit. D.   If the spoilage of these 100 units was considered normal, the cost of the company’s inventory should be recorded at exactly $165 per unit. Answers FAR Answer is A This area of US GAAP has been adjusted recently.   The applicable Accounting Standards Update states:   Only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results will be reported as discontinued operations in the financial statements.   The disposal of a major geographical area, the sale of a major line of business, and the sale of a major equity method investment are all listed as examples.   A subsidiary is not included because, without more information, it is not possible to tell whether the sale of a single subsidiary is a significant shift in an entity’s operations and financial results.   The company might have multiple subsidiaries that perform similar functions so that a current disposal is made purely for economic and efficiency reasons. REGULATION Answer is D According to Publication 970 of the Internal Revenue Service (IRS):   “For purposes of the student loan interest deduction, these expenses are the total costs of attending an eligible educational institution, including graduate school. They include amounts paid for the following items. --Tuition and fees. --Room and board. --Books, supplies, and equipment. --Other necessary expenses (such as transportation). AUDITING Answer is B According to paragraph 5 of PCAOB Auditing Standard Number 16, the “auditor should establish an understanding of the terms of the audit engagement with the audit committee. This understanding includes communicating to the audit committee the following: --The objective of the audit; --The responsibilities of the auditor; and --The responsibilities of management. BEC Answer is C If the spoilage is viewed by the company as abnormal, the cost of these 100 units should be separated and reported directly as a period cost to reduce current net income.   The remaining 900 units should still cost $165 per unit because they have not absorbed any of the cost of the lost units.   Those units are neither penalized nor rewarded because other units were lost in some unexpected way.   However, if the spoilage is viewed as normal, the cost of the remaining good units must absorb this additional cost.   The $165,000 total cost was spent to create 900 good units, an amount that is greater than $165 per unit.  Joe Hoyle, President www.CPAreviewforFREE.com