[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

[stoleway]

MOD

Mike is right, I goofed.

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

Mass-CPA

[lauren725]

Tiger — B2 is my least favorite chapter maybe in all the tests I have had so far!!!! Ok maybe not FAR2 bad but it may be a tie. It's terrible. I take my test in two weeks and have decided I want to try to grasp most of the other chapters first and then I will re-focus on B2. ^^ Like Peach mentioned above. I am hoping it is not too heavily tested and that my confidence in the other material will help me push through next week.

AUD - 73,91
FAR - 79 - Thank you God!
BEC - 73,79!!!!
REG - 92 whatttt??!

I used Becker review + flashcards, Ninja Audio, Ninja MCQ supplement on BEC and REG.

Done! Praise God!

[lauren725]

I think after B2 – The IT stuff in B4 is the most difficult for me to remember. Have ya'll gone through and memorized all of the terms in the appendix part? It is so much and I have a hard time remembering it. Any tips?

AUD - 73,91
FAR - 79 - Thank you God!
BEC - 73,79!!!!
REG - 92 whatttt??!

I used Becker review + flashcards, Ninja Audio, Ninja MCQ supplement on BEC and REG.

Done! Praise God!

[Pumpkins]

jbiele22

Two of the three questions you posted I've seen in Gleim..,I hear Gleim has the hardest questions and is therefore the best program if you don't need lectures to learn.

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

CIA Exams Passed in March, 2014

[Peach1024]

Lauren, I would recommend memorizing the basic concepts and definitions in B4 and understanding them, including the appendix. It's really boring but tested heavily. On the plus side I didn't see anything on the BEC exam from B4 that wasn't in the Becker MCQs, so I think if you have Becker you are well prepared for that section.

Regarding variances and budgeting, my experience was that NONE of the problems on the exam were anywhere close as complicated as those in Becker. In fact I focused the most on B2 – it was the area I felt the weakest in – and I only had like 3 questions from it (of course!). Every exam is different so some people may have a different experience, but regardless I'm sure that they couldn't give you the monster variance problems that are in the B2 homework on the exam and expect anyone to finish in time.

AUD - 88
REG - 76
BEC - 88
FAR - scheduled for 10/20/14

[M.O.D.]

@ Peach

Can you expound the FAR general subjects tested on BEC? You mentioned REG business law.

I am considering taking FAR (and even REG) before BEC, if it is a prerequisite.

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)

[Anonymous]

@RandomAlt thank you for the feedback!! That's very helpful. 🙂

[stoleway]

Which of the following is not a stock exchange?

A New York Stock Exchange (NYSE)

B American Stock Exchange (AMEX)

C Boston Stock Exchange

D NASDAQ

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

Mass-CPA

[M.O.D.]

Trick question?

Boston stock exchange is a regional exchange.

They are all stock exchanges.

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)

[stoleway]

@M.O.D.

Yes, I think it was tricky because they are all stock exchanges but Boston stock exchange is the odd one out.

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

Mass-CPA

[M.O.D.]

I am looking forward to more essays.

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)

[stoleway]

MOD…..have you been approved yet?

Question…

You have a plot of land that can be used for farming or for developing a golf course. You are willing to sell the land for $400,000 in either case. A developer offers you $1,000,000 for the land. What does the additional $600,000 represent in this case?

A Economic Rent

B Normal Profit

C Marginal Revenue

D Equilibrium Price

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

Mass-CPA

[M.O.D.]

Answer:

Normal profit (or producer surplus)

In economics, economic rent is any payment to a factor of production in excess of the cost needed to bring that factor into production. In classical economics, Economic rent is any payment made (including imputed value) or benefit received for non-produced inputs such as location (land) and for assets formed by creating official privilege over natural opportunities (e.g., patents). In neoclassical economics, economic rent also includes income gained by beneficiaries of other contrived exclusivity, such as labor guilds and unofficial corruption.

Normal profit is a component of (implicit) costs and not a component of business profit at all. It represents the opportunity cost, as the time that the owner spends running the firm could be spent on running another firm. The enterprise component of normal profit is thus the profit that a business owner considers necessary to make running the business worth his while i.e. it is comparable to the next best amount the entrepreneur could earn doing another job.

Marginal revenue is the amount of additional revenue from an additional sale.

Equilibrium price is the price at which supply equals demand (and the market clears).

Regarding approval:

I was rejected by Montana, and I applied to California. Probably a few more weeks to hear back.

Meanwhile I am halfway through the FAR book. Then I want to study REG business law. Not sure which test to take first.

Gleim says to take the one you find easiest first, which would be BEC. But I read BEC includes some FAR and REG. So maybe this wait is good for my studying in that I accumulate the FAR and REG background.

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)

[stoleway]

@M.O.D.

You have the 1st part of the CMA exam under your belt, I'm pretty sure you will do fine on BEC regardless.

With regards to the question above, the answer is A

When an input is purchased for a more than the next highest bidder would pay, the difference in the amounts offered is called an economic rent which is why this is the correct answer. A normal profit represents what it costs to keep entrepreneurial skills at work in their current use. Marginal revenue is the added revenue generated from the sale of one more unit of product. The equilibrium price is a market price set by supply and demand interaction.

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

Mass-CPA

[M.O.D.]

I don't agree with the answer. From Econ 1, if someone is paid more than he asks for it is called producer surplus. If the market pays more than costs it is either normal profits (due to entrepreneurial risk and capital investment) or economic profits (above entrepreneurial risk and capital investment costs). These two are difficult to distinguish.

However, neither of these is economic rent

Economic rent is more complicated and due to legal restriction on trade, not market results:

Economic rent should not be confused with producer surplus, or normal profit, both of which involve productive human action. Economic rent is also independent of opportunity cost, unlike economic profit, where opportunity cost is an essential component. Economic rent should be viewed as unearned revenue, whereas economic profit is a narrower term describing a more theoretical concept of unearned surplus income greater than the next best risk-adjusted alternative. Unlike economic profit, economic rent cannot be eliminated by competition, since all value from natural resources and locations yield economic rent.

In regard to labor, economic rent can be created by the existence of guilds or labor unions (e.g., higher pay for workers, where political action creates a scarcity of such workers). For a produced commodity, economic rent may also be due to the legal ownership of a patent (a politically enforced right to the use of a process or ingredient). For operating licenses, it is the cost of permits and licenses that are politically controlled as to their number, regardless of the competence and willingness of those who wish to compete in the area being licensed. For most other production, including agriculture and extraction, economic rent is due to a scarcity of natural resources (e.g., land, oil, or minerals). When economic rent is privatized, the recipient of economic rent is referred to as a rentier.

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)

[Author]

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