360 Days in year for BEC?

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    Topic
  • September 13, 2010 at 5:18 pm #158604
    32CPA
    Participant

    I am in BEC Chp 3 (Becker) and I’m seeing they use 360 days for the year in their calculations… is this normal? I thought there was 365 days.

    Holidays?

    BEC - Pass 10/2010
    FAR - Pass 10/2010
    AUD - Pass 11/2010
    REG - Pass 05/2011

Viewing 9 replies - 1 through 9 (of 9 total)
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  • September 13, 2010 at 5:23 pm #303695
    michelle119
    Participant

    Yes a lot of the formulas are based on 360, for whatever reason. I think this might be due to excluding holidays.

    FAR 7/2 - 88
    BEC 7/30 - 87
    AUD 8/27 - 80
    REG 11/12 - 96

    September 13, 2010 at 5:30 pm #303696
    MPoni123
    Participant

    An exam trick you can use on exam day per Cindy at Yaeger Homestudy…if the question gives nice whole numbers (like 40, 60, 90 etc) you can assume 360 days. If the days are ugly, like 42, 47, etc. you can assume 365. However, the question usually states “based on a 365 calendar year” or something so you know what number to use.

    AUD - 84; REG - 90; BEC - 79; FAR - 75; ALL DONE!!

    September 13, 2010 at 5:48 pm #303697
    32CPA
    Participant

    Wow! Thanks for the advice. That's a good trick.

    BEC - Pass 10/2010
    FAR - Pass 10/2010
    AUD - Pass 11/2010
    REG - Pass 05/2011

    September 13, 2010 at 6:26 pm #303698
    Trevor
    Participant

    Just to follow up on what MPoni said, think of it like this… If the question says 90 days – you are assuming 3 months (they might even say that), so thats 30 days/mo. multiply that by 12 and you get 360. I think it helps the candidate in the sense that you do not have to know how many days are in a specific month…

    BEC: 73,81(7/6/2010); AUD: 75(5/24/2010); FAR: 76(8/31/2010); REG: 77 (10/18/2010) - DONE!!!!

    September 14, 2010 at 7:35 am #303699
    Anonymous
    Inactive

    It's def 360 days! I remember trying to calc multiple questions on the exam w 365 and it won't be any of the answers. So I used 360 and wohhoo, it worked!

    October 18, 2011 at 3:45 am #303700
    shutterbug
    Member

    I know, old topic but I just came across this question on cpareviewforfree.com

    Your supplier gives you credit terms of 2/10 net 30. This means that if you pay within 10 days you take a 2% discount. If not, the balance is due in full within 30 days. What is the annual percentage cost to you of not taking the discount and paying on the 30th day?

    A 2%

    B 37.24%

    C 36%

    D 24%

    I calculated with 360 days and got C 36%, but the answer was B (365 days). Urgh, I hope the exam states how many days in a year.

    Your choice is to pay $.98 on the dollar on day 10 or $1 on day 30. The extra cost is .02/.98 or .0204081. You save 20 days (30-10) by paying later. To annualize the cost take 365 days and divide by the days saved. 365/20=18.25 and multiply this by the .0204081 percent cost ( .0204081) (18.25) = 37.24%

    FAR 73 78
    BEC 73 82
    AUD 65 83

    October 18, 2011 at 1:49 pm #303701
    rmm91909
    Participant

    I think for those types of questions it is always 365 days as that is the formula. The ones where you would see 360 versus 365 tend to be the cash conversion cycle problems or the financial ratios.

    October 18, 2011 at 4:36 pm #303702
    Anonymous
    Inactive

    Use 365 days unless the question specifically tells you to use 360.

    October 18, 2011 at 5:25 pm #303703
    shutterbug
    Member

    I'll keep that in mind, thanks. Becker still shows the APR of quick payment discount formula with 360 days (page B3-56)

    FAR 73 78
    BEC 73 82
    AUD 65 83

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