Be a Verb; New 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)   June 23, 2015   Lesson 163   From:   Joe   Article:  Be a Verb and Change    I have a few sayings in my life that I really like.   They inspire me to do the things I want to do (or should do).   I was reading a book yesterday by one of my favorite authors (David Mitchell) and came upon a likeness of one of these wonderful quotes:   “The soul is a verb. . . . Not a noun.”   My version of that sentiment:   I want to be a verb and not a noun.     A verb is an action word (either physical action or mental action) that tells what is happening.   “Runs” is a verb.   “Thinks” is a verb.  “Studies” is a verb.   A noun is a person, place, or thing.   “Dog” is a noun.   “Teacher” is a noun.   “Apple” is a noun.   I have always wanted to think of myself as a verb.   I like the idea that I am heading some place.   I like the idea that I am getting better.   I like the idea that every day, every hour, every minute can be a step forward.   I try to live my life with that improvement in mind.   I am not really interested in being defined as a noun.   There’s nothing wrong with nouns.   I just feel like they put me in a box and restrict what I can become.   I do not want to be limited and the best way I can avoid that is to think of myself as a verb.   I am always moving beyond my present state to become better.     It amazes me that, when I talk with students or with candidates taking the CPA Exam, they will often start to define themselves and they frequently do so in very negative ways.   They put themselves into a box.  --I am a weak student. --I am not a very organized person. --I am slow worker. --I am a poor test-taker.   To me, it just seems like they are climbing into a big personal box that restricts their advancement.   That noun is a limitation on what they can become.  That box holds them back from the success they want.    How does a person become a verb?   How do you push yourself to get better?     William Faulkner once famously wrote:   “Try to be better than yourself.”    To me, that is the essence of being a verb.   You are not locked in a box.   You are moving toward your goals.   Okay, how can you get better?   Well, you can pay a consultant $500 per hour to tell you this or I can just tell you for free.   Let’s go with free.   I like free.  Here are 5 Steps:   Step One – Have goals—both short term and long term.   What do you want to accomplish in the next 24 hours (be specific)?  What do you want to accomplish over the next two weeks (be specific)?   What do you want to accomplish over the next one to five years (be specific)?     In fact, I have my 24 hour list sitting right here beside of me on this desk as I type.    I often tell my students that if they don’t have goals any action is okay.   You cannot get lost if you are not going anywhere.     Step Two – Make good use of your time.   We all have 168 hours each week.   If you eat and sleep for 70 hours per week, that still leaves you with 98 hours to accomplish stuff.  How well you use those 98 hours is probably the key difference between success and mediocrity.   Too many people just let those hours wash away without benefit.   Don’t do that.   Be aware of what you are accomplishing.   As you move through your day, think about what you are doing at the current moment and whether it is moving you toward your goal.  Awareness is a great attribute to possess.   Steps 3-5...     Android and Apple Apps Updated   We've updated our apps!  The FAR app is shown when you click on the icons.  The others are also listed as "CPA Review".  Start practicing more questions on the go today!            Check it Out   We often have people write in to us to ask:  “I want to use your products so I can pass the CPA Exam without paying much money.   How can I do this?”   We received an email this past week from a person who passed all four parts of the CPA Exam and paid virtually nothing.   She told us exactly how she did it.   This is a roadmap that can clearly work.  If you are infinitely rich and want to spend several thousand dollars to pass the CPA Exam, then go for it.   But, if you value your money and don’t see a good reason to throw it away, here’s a strategy that you should consider.   Since don't advertise, we depend on people like YOU to spread the word.   If you know someone who is getting ready to start preparing for the CPA Exam, send them this message.   Thanks!!!     The following message comes from Tamara M:   I’m finally done!  I passed all four parts of the CPA exam on the first try, using only CPA Review For Free questions and materials.  The materials are designed to help you make a 75 and that’s all I needed to pass!  It took many hours of studying on top of working at least 50 hours a week, so I know it can be done!   My study plan: 1.       I set up a spreadsheet to track my scores. I listed out the exam area and every testing section within that area.  Then I weighted my scores by the number of questions in that section compared to the total number of questions in the entire exam area. 2.       I went through every single free question and documented my scores so I would know which areas needed more study.  Most of the time, all of the areas needed more study! 3.       I read the answer explanations on every single question and took bullet point notes to help me remember the main ideas. 4.       I used the downloadable materials that can be purchased from the website to study any areas that I did not understand after taking the tests and reading the explanations.  I just read the areas I didn’t understand, not the entire book.  I didn’t want to get bogged down in reading and lose precious time.  I spent less than 5 hours of study time in each section reading the materials.  Almost all of my time was spent taking the free tests, making notes, and reviewing. 5.       I kept taking the tests, reading the answer explanations, and reviewing my notes until I made at least an 85 on each testing section. 6.       I made flash cards for topics I had a hard time remembering and kept those cards with me so I could study anytime I had two free minutes.  I studied standing in line at the grocery store, waiting for clients, at the doctor’s office, waiting for meetings to start and while cooking dinner. 7.       I tried to make my study time as pleasant as possible.  I wanted to be able to spend time with my family and still have a little bit of a life during this process, so I made every effort to spend time weekly doing something I love while studying.  I studied at the beach.  I studied at the pool.   I studied on my back patio around the fire pit with my family and dogs.  I studied in the living room with ear plugs and white noise so that I could still be with my family, but couldn’t hear the TV or noise.  One of the things I loved about CPAReviewforFree.com was I could take the tests on my iPad so it made studying anywhere possible.  I had to stay motivated and I knew being isolated and away from my family would make me lose momentum, so I made it work for me and had a little bit of fun during the process. 8.       I put in LOTS of hours of studying.  I studied over 200 hours for FAR, 175 for BEC, 130 for REG and 120 for AUD.   Here are my scores: AUD:  81 – 05/03/14 BEC: 77 – 02/04/15 FAR: 78 – 05/05/15 REG: 84 – 06/09/15   It was all worth it, because I have finished all of the tests, only had to take each test once, and will be a CPA this month!   Thank you CPA Review for Free for helping me achieve my dreams!   10% discount!! Fast Forward Academy’s CPA review program offers you a comprehensive approach to passing the CPA exam.  This course offers all types of methods to help you pass--intelligent learning to focus on the right subjects, books, online, mobile, study calendar, text message reminders, and many more.     We are offering a10% discount if you redeem the coupon code: CPAREVIEWFORFREE during checkout.    Practice, Practice, Practice   Okay, it is hard to beat TM’s message above.   She knew what she wanted to do and she went out and did it.   Congratulations to her and all of the other candidates who have nailed down this exam.   But now it is your time so let’s practice a little bit.   Read the questions below, come up with your answer and then read our answer very carefully.     FAR    On January 1, Year One, the Hector Company issues bonds with a face value of $100,000 and a stated annual cash interest rate of 5 percent for $95,000 to yield a negotiated effective annual interest rate of 6 percent. Interest is paid everyDecember 31 and the effective rate method is being applied. This issuance was on a date when the annual market rate of interest was 7 percent for the other companies in the same industry as Hector. Which of the following is true?   A.   The $95,000 is the present value of the future cash flows discounted at the 7 percent market rate. B.   Interest paid on December 31, Year One, is $4,750. C.   Interest expense for Year One will be reported as $4,750.  D.   On a December 31, Year One, balance sheet, the payable will be reported as $95,700.     REG   Mr. and Mrs. Fallon made several contributions to qualified charities this past year. Land (which had been held for four years) with a tax basis of $5,000 and a fair value of $8,000 was donated to a church. Cash of $6,000 was given to a university. Household items (primarily furniture) with a cost of $2,900 and fair value of $1,050 were given to a hospital. The taxpayer's adjusted gross income is $70,000. What total can this couple include within its income tax itemized deductions as charitable contribution for the year?   A.   $12,050 B.   $13,900 C.   $15,050 D.   $16,900     BEC   Irena Anderson’s income goes up during a period of time by 17 percent.  Over the same period, the quantity of product G that she buys increases by only 10 percent.  Which of the following statements is true?   A.  Product G is neither a necessity nor a luxury good for her. B.  Product G is a necessity for her. C.  Product G is a luxury good for her. D.  Product G is both a necessity and a luxury good for her   AUDITING   The Hernandez Corporation is audited by Miley and Cyrus CPAs. The audit team is attempting to assess the control risk associated with the company’s inventory system before starting any substantive testing of the inventory accounts. During the current year, 350,000 receiving reports were created and recorded in the company’s perpetual inventory system. Based on prior audits and an evaluation of the complexity of the tasks involved, the audit team expects an overall error rate of 1.5 percent. The audit team has decided to view control risk at an acceptably low level if it is believed that the population of receiving reports contains 4.5 percent errors or less.  A sample of 400 of these documents is selected randomly and 4 errors are found. Statistical techniques are applied to this sample of 400 items and an upper deviation rate of 3.0 percent is calculated. What is the allowance for sampling risk?   A.   1.5 percent B.   2.0 percent C.   3.0 percent D.   3.5 percent   Answers   FAR   Answer is D   The price paid for the bond will be computed as the present value of the future cash flows discounted at the 6 percent rate negotiated by the buyer and seller.   After that, the interest paid for each year will be the $100,000 face value times the cash rate of 5 percent or $5,000.    The interest expense will be the $95,000 book value times the effective rate of 6 percent or $5,700.   The additional $700 ($5,700 less $5,000) is compounded (not paid so it is added to the balance) and brings the book value up from $95,000 to $95,700.   REG   Answer is C   The Fallons can deduct all of the $6,000 cash donated but only the $1,050 fair value for the household items. Long-term capital gain property (such as the land) is deductible at fair value if this amount does not exceed 30 percent of the couple’s adjusted gross income (30 percent of $70,000 or $21,000). Thus, the entire $8,000 fair value of the land can be included as an itemized deduction.   That brings the total deductible amount to $15,050 ($6,000 plus $1,050 plus $8,000).   BEC   Answer B is correct   With a luxury good, the person buys little when income is low but buys more and more as income goes up.   With a necessity, the person buys a lot even when income is low but buys less and less as income goes up.  Here, she has bought less and less as her income rose.   Product G is a necessity.      AUDITING   The answer is B   This question is checking to see if you understand the vocabulary used in statistical sampling.   The sample drawn by the auditor found that errors occurred at a rate of 1 percent (4 out of 400). Statistical sampling techniques indicated that the population could actually contain errors at a rate as high as 3.0 percent (the upper deviation rate). The difference between the deviation rate of the sample (1 percent) and the possible upper deviation rate for the population (3.0 percent) is known as the allowance for sampling risk. Here, the allowance is 2.0 percent (3.0 percent minus 1 percent). Statistically, the actual population characteristics are not expected to be more than 2.0 percent above that of the sample. Although not addressed by this question, the audit team should accept this population as having a reasonably low error rate because the upper deviation rate of the population (3.0 percent) is lower than the audit team’s tolerable deviation rate of 4.5 percent. According to this one test, control risk appears to be acceptably low for these documents.     To see more FREE questions, click here.     Go for it!  You can do it!   Joe Hoyle President, CPAreviewforFREE