[jeff]

BEC Resources:

Free BEC Notes & Audio – https://www.another71.com/cpa-exam-study-plan

BEC 10 Point Combo: https://www.another71.com/products-page/ten-point-combo

BEC Score Release: https://www.another71.com/cpa-exam-scores-results-release

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

[Qlad]

Thanks zxio and ucmcpa….that really makes sense….. i will remember…it's better to draw a graph in economics question ….it makes a lot more sense….thanks a lot

FAR 72,71,81 🙂
AUD 64,71, 72, 75 🙂 I'm done !!!
REG 73, 74, 74, 84 🙂
BEC 76 🙂

[Qlad]

Thanks zxio and ucmcpa….that really makes sense….. i will remember…it's better to draw a graph in economics question ….it makes a lot more sense….thanks a lot

FAR 72,71,81 🙂
AUD 64,71, 72, 75 🙂 I'm done !!!
REG 73, 74, 74, 84 🙂
BEC 76 🙂

[Qlad]

i have been trying to work on who has what authority and what responsibility…..in IT questions….pls add on what i am missing…it's giving me hard time….

SOFTWARE DEVELOPER ….responsible for writing software….No access to data production system

SYSTEM ANALYST…..not sure…what he does…

PROGRAMMER….operating system….

NETWORK ADMINISTRATOR….managing access/ control of maintenance….

I get confused when they use similar names….like “database administrator and network administrator”….is there a difference or are they same….?

FAR 72,71,81 🙂
AUD 64,71, 72, 75 🙂 I'm done !!!
REG 73, 74, 74, 84 🙂
BEC 76 🙂

[Qlad]

i have been trying to work on who has what authority and what responsibility…..in IT questions….pls add on what i am missing…it's giving me hard time….

SOFTWARE DEVELOPER ….responsible for writing software….No access to data production system

SYSTEM ANALYST…..not sure…what he does…

PROGRAMMER….operating system….

NETWORK ADMINISTRATOR….managing access/ control of maintenance….

I get confused when they use similar names….like “database administrator and network administrator”….is there a difference or are they same….?

FAR 72,71,81 🙂
AUD 64,71, 72, 75 🙂 I'm done !!!
REG 73, 74, 74, 84 🙂
BEC 76 🙂

[smsingla]

I have these following two questions about Acid-test ratio. Both of them are from AICPA released questions. But the problem is they both use different formulas. what answers will u choose and why?

#1

At the end of its fiscal year, Krist, Inc. had the following account balances:

Cash $5,000

Accounts receivable10,000

Inventory 20,000

Accounts payable 15,000

Short term note payable 5,000

Long term note payable 35,000

What is Krist's quick (acid-test) ratio?

a. 0.273

b.0.636

c.0.750

d.1.750

#2

A company has cash of $100 million, accounts receivable of $600 million, current assets of $1.2 billion, accounts payable of $400 million, and current liabilities of $900 million. What is its acid-test(quick) ratio?

a. 0.11

b. 0.78

c. 1.75

d. 2.11

REG 81
BEC 74,65,78
FAR 79
AUD 85 DONE!!!

[smsingla]

I have these following two questions about Acid-test ratio. Both of them are from AICPA released questions. But the problem is they both use different formulas. what answers will u choose and why?

#1

At the end of its fiscal year, Krist, Inc. had the following account balances:

Cash $5,000

Accounts receivable10,000

Inventory 20,000

Accounts payable 15,000

Short term note payable 5,000

Long term note payable 35,000

What is Krist's quick (acid-test) ratio?

a. 0.273

b.0.636

c.0.750

d.1.750

#2

A company has cash of $100 million, accounts receivable of $600 million, current assets of $1.2 billion, accounts payable of $400 million, and current liabilities of $900 million. What is its acid-test(quick) ratio?

a. 0.11

b. 0.78

c. 1.75

d. 2.11

REG 81
BEC 74,65,78
FAR 79
AUD 85 DONE!!!

[UCMCPA]

#1 15/20 = .75

# 2 700/900 = .78

However, one includes AP and one doesn't. I'm not sure why though. I'd venture to say the 2nd one should have included the AP though.

I would GUESS that since the acid-test ratio has the word “current liabilities” in the denominator it influences each problem. One the first, no current liabilities are “clearly stated” as a number, while in problem two they give you “current liabilities” of xxx. I would assume that since the first one doesn't have the amount identified, just ask yourself what's current.

However, A/P would always be classified as a “current liability”, correct? Maybe this is shit planning on their part and they put out bad questions.

FAR - 84
AUD - 94
REG - 86
BEC - 86

[UCMCPA]

#1 15/20 = .75

# 2 700/900 = .78

However, one includes AP and one doesn't. I'm not sure why though. I'd venture to say the 2nd one should have included the AP though.

I would GUESS that since the acid-test ratio has the word “current liabilities” in the denominator it influences each problem. One the first, no current liabilities are “clearly stated” as a number, while in problem two they give you “current liabilities” of xxx. I would assume that since the first one doesn't have the amount identified, just ask yourself what's current.

However, A/P would always be classified as a “current liability”, correct? Maybe this is shit planning on their part and they put out bad questions.

FAR - 84
AUD - 94
REG - 86
BEC - 86

[princeCPA]

@UCMCPA and smsingla I think the denominator will always be current liabilities. The first question is clear in its presentation but the second question is not clear since it gives current assets, cash and A/R. So are we assuming the rest of current assets are inventories? It seems the question assumes total current liabilities are only Cash, A/R and Inventories. What do guys think? and which formula is correct: (CA-Inv)/CL or (CA-Inv-prepaid)/CL???

BEC 79
FAR 86
AUD 79
REG 90

[princeCPA]

@UCMCPA and smsingla I think the denominator will always be current liabilities. The first question is clear in its presentation but the second question is not clear since it gives current assets, cash and A/R. So are we assuming the rest of current assets are inventories? It seems the question assumes total current liabilities are only Cash, A/R and Inventories. What do guys think? and which formula is correct: (CA-Inv)/CL or (CA-Inv-prepaid)/CL???

BEC 79
FAR 86
AUD 79
REG 90

[NYIACCT89]

@princeCPA

(CA-Inv-Prepaids)/CL = acid test ratio

FAR - 7/1/13 - 98
AUD - 8/31/13 - 94
BEC - 11/23/13 - 89
REG - 1/13/14 - 86

Study Materials:
Becker - Online Course and Flash Cards

[NYIACCT89]

@princeCPA

(CA-Inv-Prepaids)/CL = acid test ratio

FAR - 7/1/13 - 98
AUD - 8/31/13 - 94
BEC - 11/23/13 - 89
REG - 1/13/14 - 86

Study Materials:
Becker - Online Course and Flash Cards

[princeCPA]

@NYIACCT89 thanks.. the reason I asked is Becker has the formula you posted but wiley says it is CA-inv/CL.

BEC 79
FAR 86
AUD 79
REG 90

[princeCPA]

@NYIACCT89 thanks.. the reason I asked is Becker has the formula you posted but wiley says it is CA-inv/CL.

BEC 79
FAR 86
AUD 79
REG 90

[smsingla]

So u guys r saying that in second question, current assets of $1.2billion should not be added in current assets even though they have specifically mentioned that it is current. but we should consider current liabilities of $900 million as current liabilites but not accounts payable of $400 million?

REG 81
BEC 74,65,78
FAR 79
AUD 85 DONE!!!

[Author]

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