[jeff]

Free Study Planner, Notes, Audio, Flashcards: https://www.another71.com/cpa-exam-study-plan/

Free CPA Exam Survival Guide: https://www.another71.com/cpa-exam-survival-guide/

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

[Anonymous]

HopefulCPA0601,

my notes say:

there are 5 major sections to the general purpose fin. statements of a gov. entity, referred to as CAFR

I must be misreading this question somehow

[Anonymous]

HopefulCPA0601

Yeah, I saw the explanation to the lifo fifo question, I just don't understand the logic behind it

[Guti]

I have a quick question. I have asked this before, but I dint get a solid answer. Since most of us should take the exam this month, I might be able to get an answer.

Why installment sales are represented by a future tax liability? As cash is received, we only include a % as gross profit for book income. On the tax side, we will record the full cash received as income. This tells me that Im paying more taxes now per tax return, so it should be a future tax benefit and not a liability. What am I missing here?

FAR-84
AUD-
REG-
BEC-

[HopefulCPA0601]

@anna – your ending inventory under FIFO will go up by 30, but if you use LIFO it will only go up by 10, so you have to back out that 20 from your net income. another way to make this make sense (at least to me) is to think of that rule if Ending Inventory is Higher, Cogs is Lower, Net Income is Higher

Under FIFO your net income would be 170, but if you switch to LIFO you will have less ending inventory, more cogs and less net income

I hope that helps you to get a theory behind the question, I'm not the best at explaining things to other people sometimes

BEC: 65 - 79* - 84 DONE
AUD: 65 - 76 DONE
REG: 63 - 77 DONE
FAR: 65 - 63 - 67 - 69 - 73 - 71 - 83 DONE

Becker Notes & Flashcards, Wiley Test Bank, Ninja MCQ

[HopefulCPA0601]

@gian: book recognized a GP% of accounts receivable as deferred revenue, and a GP% of collections as recognized revenue. Tax only recognized the cash when they receive it. Therefore book is actually recognizing more profit than tax, resulting in DTL

BEC: 65 - 79* - 84 DONE
AUD: 65 - 76 DONE
REG: 63 - 77 DONE
FAR: 65 - 63 - 67 - 69 - 73 - 71 - 83 DONE

Becker Notes & Flashcards, Wiley Test Bank, Ninja MCQ

[Anonymous]

I hate governmental for questions like this:

GASB I60, Investments—Securities Lending, states that a government that (1) loans securities to a broker-dealer and (2) receives collateral in the form of other securities that the government cannot pledge or sell without borrower default should report:

the securities lent as assets.

the collateral received as assets.

a liability for the government's obligation to return the collateral securities.

What is even going on there? why would anyone want to borrow securities? To do what with them? And gov. is doing what? Lends securities and receives collateral in the form of other securities?

[jstay]

@anna, I'm doing gov't today too. thought i was better at this. my first round with becker i killed it. now the WTB has me worried.

[Anonymous]

jstay,

A lot of questions (answers) contradict to my roger's notes, it's so frustrating. I am OK with journal entries and types of funds, but these weirdly worded theoretical questions make me want to quit the whole CPA thing right now. I feel like I am the dumbest person here

[jpowell31]

@jstay – right there with you guys. thought govt was my sweet spot. i know it's just my marked questions so they were hard for me to begin with but ugh. went to bed with some confidence last night and now i'm anxious about where i'm at 🙁

[Guti]

HopefulCPA0601,

That is exactly why Im confused. You mentioned what I stated on my question= @gian: book recognized a GP% of accounts receivable as deferred revenue, and a GP% of collections as recognized revenue. Tax only recognized the cash when they receive it. Therefore book is actually recognizing more profit than tax, resulting in DTL

I dont follow you. Gross profit percentage is recognized for book purposed as a % cash received. Lets say that on year 1, you received cash on a installment sale of 100K and your GP is 25%,so for book purposes, you will recognize 25,000 as income ,but on the same year for taxes, you will recognize 100,000 cash in full, your income will be higher by 75K for taxes. How come this is a deferred tax liab if Im paying more taxes now?

FAR-84
AUD-
REG-
BEC-

[jpowell31]

@hugemistake – were you talking about compensated absences? Is there comprehensive compenstated absences as well? haven't come across one asking to calculate the expense but the “liability” – which would be shown on the GW statement of net position and =

# hours employees are entitled to receive upon termination x rate of pay earned at the BS date (that point in time you are doing the calc).

can you give the example you had when you get a chance so i can see if there's any difference for reference? sorry i know you posted these questions last night….

[HopefulCPA0601]

I need to build up more confidence because when i see a question that i am like oh the answer is this in a quick minute, then i immediately think there's a trick and second guess myself

BEC: 65 - 79* - 84 DONE
AUD: 65 - 76 DONE
REG: 63 - 77 DONE
FAR: 65 - 63 - 67 - 69 - 73 - 71 - 83 DONE

Becker Notes & Flashcards, Wiley Test Bank, Ninja MCQ

[jpowell31]

anxiety is my number 1 enemy in this exam. i either dumb the question down and miss the trick or overcomplicate it and waste time!

[HopefulCPA0601]

@gian – tax is recognizing gp% of cash collected, and not taking into account any deferred gp on the A/R at gp%. Not total cash collected.

BEC: 65 - 79* - 84 DONE
AUD: 65 - 76 DONE
REG: 63 - 77 DONE
FAR: 65 - 63 - 67 - 69 - 73 - 71 - 83 DONE

Becker Notes & Flashcards, Wiley Test Bank, Ninja MCQ

[HopefulCPA0601]

So @gian in your example, there is no deferred bc both book and tax will recognize the 25k. if however a/r was involved, book would recognize that deferred gp and tax would not.. book therefore recognized more income and pays more tax

BEC: 65 - 79* - 84 DONE
AUD: 65 - 76 DONE
REG: 63 - 77 DONE
FAR: 65 - 63 - 67 - 69 - 73 - 71 - 83 DONE

Becker Notes & Flashcards, Wiley Test Bank, Ninja MCQ

[Author]

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