[jeff]

@h0wdyus

Incorrect

The answer is B. Comparable sales.

“The use of comparable sales is not an income approach to valuation of a business, it is a market approach. Under the comparable sales approach, the value of a business is determined by comparing it to other entities with comparable characteristics for which the value is more readily determinable.”

This was a tricky one

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[RUGUY22]

@Zack

Yep. That's what I did. It has helped a great deal!

IL Candidate

AUD - 98 (11/11/13)
BEC - 69 (4/19/14); 83 (7/21/14)
FAR - 88 (11/26/14)
REG - 90 (2/26/15)

Ethics - 98 (3/9/15)

Using the CPAexcel review course and Wiley Test Bank.

[GoVPI]

@RU

Income recon: I am not familiar with that, if its in capital budget I'm not there yet; will look forward to the answer.

Question:

A short-term speculative rise in the worldwide value of domestic currency could be moderated by a central bank decision to

Sell domestic currency in the foreign exchange market.

Buy domestic currency in the foreign exchange market.

Sell foreign currency in the foreign exchange market.

Increase domestic interest rates.

BEC 8/14/14 - Passed
Graduated from college 12/13/14
AUD 8/31/15 - 74. Retake - Passed
REG
FAR

[GoVPI]

Which of the following would illustrate vertical financial statement analysis?

Interest expense as a percentage of net sales.

Gross profit compared to industry averages.

Net sales over time.

Earnings per share as compared to the prior year.

*Question: All i have to remember is vertical is a percentage, and horizontal is dollar value?

BEC 8/14/14 - Passed
Graduated from college 12/13/14
AUD 8/31/15 - 74. Retake - Passed
REG
FAR

[M.O.D.]

Re income reconciliation rule, does this have to do with calculating the GDP?

The income approach:

salaries and wages +

rents

interest

proprietor and partnership incomes

corporate profits

= national income

+

Indirect business taxes

net foreign factor income

= net domestic product

+ capital consumption allowance (depreciation)

= GDP

Whether you use the expenditures approach or the income approach, GDP should be the same result.

Re speculative rise in the value of domestic currency could be moderated by:

Selling domestic currency in the market

Vertical financial analysis:

Interest expense as a percent of sales

(every income statement item is a percent of sales, and balance sheet items are a percent of total assets)

No, both vertical and horizontal analysis are percentages.

One goes up and down one year (vertical), one goes across multiple years (+ competitor or industry average) (thus horizontal)

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[M.O.D.]

What are vertical and horizontal integrations?

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[RUGUY22]

I probably should've been more descriptive:

“Income Reconciliation — explaining the difference in income between absorption costing and variable costing.

The difference between the two measures of income is due to the different treatment of fixed manufacturing costs. Direct costing deducts all fixed manufacturing costs as a lump sum period cost when calculating income. Absorption costing assigns fixed manufacturing costs to products and therefore only deducts fixed manufacturing costs when the units are sold.

Depending on whether the units sold are greater than or less than the units produced, the fixed manufacturing overhead deducted under absorption costing may be greater or less than the fixed manufacturing overhead deducted under direct costing.

The difference can be calculated as: Ending Inventory units x fixed cost per unit less Beginning Inventory units x fixed cost per unit.

This equation is known as the “income reconciliation rule” and is expected to be widely tested on the exam.”

IL Candidate

AUD - 98 (11/11/13)
BEC - 69 (4/19/14); 83 (7/21/14)
FAR - 88 (11/26/14)
REG - 90 (2/26/15)

Ethics - 98 (3/9/15)

Using the CPAexcel review course and Wiley Test Bank.

[stoleway]

@CPAin14

what was the answer to the domestic currency question you posted..is it A?

Please lets make sure we deal with one question before moving on to other questions…just my .002$

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[RUGUY22]

Assuming this has to do with acquisitions, I believe vertical integration involves acquiring an entity such as a supplier or distributor. While horizontal integration involves acquiring a competitor.

IL Candidate

AUD - 98 (11/11/13)
BEC - 69 (4/19/14); 83 (7/21/14)
FAR - 88 (11/26/14)
REG - 90 (2/26/15)

Ethics - 98 (3/9/15)

Using the CPAexcel review course and Wiley Test Bank.

[Pumpkins]

Hi guys, just had my first intense study weekend for BEC. This stuff is going to be awful… I got through all the Econ, globalization, and governance and started into FRM.

Soo many boring formulas. This one is going to be the most painful for me.

Luckily I see that there is a lot of IT later.

I'm taking on August 16th an concerned about the timing :/

AUD- 93
BEC- 81
FAR- 1/26/2015
REG- TBD

CIA Exams Passed in March, 2014

[M.O.D.]

@ RUGUY22 yes, horizontal integration: need not be a competitor, just someone else in the same industry (likely to be a competitor though)

@stoleway yes, A is correct, trust me.

One way to reduce prices is to sell more of that product (make more available in the marketplace). And currency is like any other product.

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[M.O.D.]

Welcome Pumpkins.

What is the operating cycle? How do you calculate it?

What about the cash cycle?

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[Pumpkins]

I think it's best to look at vertical and horizontal integration in terms of the supply chain.

Vertical integration is acquiring more stages of the supply chain (up or down), while horizontal integration is expanding horizontally across the supply chain (acquiring production units at the same stage, which can include either compliments or competitors)

AUD- 93
BEC- 81
FAR- 1/26/2015
REG- TBD

CIA Exams Passed in March, 2014

[Pumpkins]

The following link gives a detailed description of the operating cycle:

https://www.investopedia.com/university/ratios/operating-performance/ratio3.asp

Both cycles you mentioned are quite complex and would be best explained by a quick google search.

Hi MOD- out of curiosity, what is a “Certificate of CPA and EA Preparation” as referenced in your signature?

AUD- 93
BEC- 81
FAR- 1/26/2015
REG- TBD

CIA Exams Passed in March, 2014

[Pumpkins]

@RUGUY22

You got a 98 on AUD and a 69 on BEC?!

That is terrifying.

AUD- 93
BEC- 81
FAR- 1/26/2015
REG- TBD

CIA Exams Passed in March, 2014

[RUGUY22]

@Pumpkins

Yeah. Most people say that I must've gotten too confident after my AUD exam. I can agree with that. I also started a new job during my prep for BEC and barely had time to study as well as I would've liked. Moreover, I simply hate the material covered in BEC…it's just way too broad.

IL Candidate

AUD - 98 (11/11/13)
BEC - 69 (4/19/14); 83 (7/21/14)
FAR - 88 (11/26/14)
REG - 90 (2/26/15)

Ethics - 98 (3/9/15)

Using the CPAexcel review course and Wiley Test Bank.

[Author]

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