[jeff]

Welcome to the Q2 2016 CPA Exam Study Group for BEC.

Some BLITZ videos to help your exams: https://www.another71.com/ninja-blitz

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

[MaLoTu]

@pony boy – look at page 17 of Q1 BEC thread, I have a very easy guideline to the WC and I have gotten scored stronger on the last 2 attempts. I unfortunately am lacking in the MCQs … got a 74 last time, ouch! I know for sure that one person on here from that study group followed my outline and got stronger and passed.

[quamikazee]

@lonestar, I would say choice C.

A. Wouldn't make sense, as pledging would be using the AR as collateral for a loan, which doesnt have much to do with the question
B. Giving the customer a smaller discount would discourage the customer from paying earlier.
C. Factoring agreement with a finance company would encourage customers to pay earlier, as the finance company would most likely be less lenient and would require the clients to pay earlier.
D. Giving the customer more time to pay for the discount would increase the time to pay and increase turnover ratio.

REG - 81 - 2/3/16
BEC - 87 - 4/5/16
AUD - 87 - 6/10/16
FAR - 8/29/16

Becker Self Study only

[lonestar]

@quamikazee

Yes C is correct. Thanks for the explanation!

[MaLoTu]

@lonestar – I think the answer is C because when you factor you are turning a receivable into cash instantly. The ratio is Net credit sales divided by average net receivables. When you decrease the denominator it increases the ratio (or whatever is on the other side of the = sign). By factoring you decrease the denominator and increase the ratio, which you want to be high because it is the number of times you collected in the period.

The AR TO is the denomiator when calculating the AR receivable collection* period … So, if the AR TO is high the collection period is low …

Pledging does not get the rec off the books.

*ETA

[Bear-Bear]

These ratios are not fun at all. I think I have a mental block when it comes to ratios. Hated them in school, hated them for FAR, hate them on BEC. Grrr.

Anyone have any special tips or tricks for memorizing them?

[MaLoTu]

@Bear – they are hard to memorize!

Here are some ratio #hacks that I use … NI, N Sales, Income, or some other revenue type thing is in the numerator of many of the ratios, the denominator is usually the same thing as the ratio you are figuring out (i.e., return on equity = NI/Total Equity).

Another thing is when analyzing the ratios, the denominator and the ratio you are solving for have an inverse relationship … So if you are trying to figure out how to increase return on equity, you would look for the answer that decreases total equity.

I know that is not a one size fits all answer, but from my experience it is more important to be able to analyze the ratios and manipulate them than to actual calculate them (which you pretty much need to do, but it isn't the end of the story, lol).

[Anonymous]

What preceded most recessions during the second half of the twentieth century?

a. Brief periods of falling prices.
b. Extended periods of falling prices
c. Congress attempting to fight inflation through large increases in tax rates
d. The Federal Reserve attempting to fight inflation through higher interest rates.

D is the correct answer, but I don't understand how I was supposed to know this.
Here's the explanation: During the second half of the twentieth century, most recessions followed efforts by the Federal Reserve to forestall current or expected increases in inflation rates through higher interest rates.

I'm tired of operating in fear and mediocrity. It's time to try. It's time to do. It's time to go.

[MaLoTu]

KG – I understand why D could be the answer, but I am unsure why B cannot also be the answer. In B a decrease in AD leads to a decrease in P (price which equates to inflation) … I don't know if in B you are supposed to assume that the decrease in P can be attributed to an increase in AS?

Very weird question and I vaguely remember others bringing it up previously.

[JSThompson]

Need help with pacing my reading the BEC Ninja book and taking notes.
I want to be ready to take my exam in 8 weeks.
Is it doable to read the entire text in 4 weeks and take notes?
If so I then would have two weeks of non stop MCQs then the last two weeks of rewriting my notes before exam day.
Any advice on this would be greatly appreciated.
Thanks in advance.
JT

2016 CPA Candidate

[happygal]

Hi guys! How do you memorize/ understand the (17 Principles of Internal Control), I am using cpaexcel and all I am getting out of it is CRIME, I don't really understand how to fit in the other 12. Any suggestions, Or if you have any other review course's method of understanding it, then I would really appreciate it! Thanks!

Control environment
Risk Assessment
Information and Communication
Monitoring
E Control Activities

[RWCPA]

Man the WC practice for CPAexcel is killing me. I have taken two practice exams now and the written is keeping my score lower. I got an 81% on the first one and an 80% on the second, The MCQs are averaging between 87% and 91% my written is from 79% to 25%. I used MaLoTu format for the email which is where I got the 79% (thank you) but the others are a drag. Maybe its just the way the practice software reads it, but it is driving me nuts…. Less than 48 hrs to go

[RWCPA]

I literally just rewrote the COSO stuff over and over. I would be interested in a memory trick as well.

[MaLoTu]

@RW- the exam is nothing like the practice materials. Pretty much all the WC are email type scenarios… Rock the MCQ and you can do mediocre in the WC and still get a good score 😉

[MaLoTu]

@happygal – The COSO framework has 17 principles that are in the five categories of CRIME. I am not exactly sure what the 17 distinct elements are but Becker lays it out like this;
Control environment
*Ethics *Board oversight * setting objectives *commitment to competence * Accountability (EBOCA)

Risk assessment
*Event ID *assess risk *respond (EAR)

Information and communication
*Fair *accurate *complete *timely (FACT)

Monitoring
*ongoing evaluations *communication of deficiencies

Existing control activities
*policies and procedure

If you understand what each of the 5 areas of CRIME do then you will be fine.

[Anonymous]

I'm on my 8th day of doing nothing but studying – have finally gotten through the entire Gleim Test Bank. Now it's just reviewing the one's I got wrong or have marked.

I can't say enough about the NINJA flash cards through Brainscape. The program is fantastic for helping you memorize ratios. Works especially well on the new iPad.

Anyone who says this section is easier than the others is wrong IMO. It's a mile wide and an inch deep with lots of calculations.

[Author]

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