[jeff]

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

[NYCaccountant]

Sorry, Cost of goods available for sale is actually beginning inventory+ Net purchases + Freight in because shipping costs are inventoriable costs. I am assuming that the cost of goods available for sale figure (1,200,000) already included these numbers because if I added the freight in and subtracted the purchase discounts, I would end up with 1,220,000 as cost of goods available for sale. Now once I subtract my ending inventory out (1,220,000-120,000) this leaves me with a cost of goods sold of 1,100,000, which can't be right because cost of goods sold is 1,080,000. I'm just working the problem a different way to determine if I should account for the freight in and purchase discounts, or are they already included.

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[NYCaccountant]

Sorry, Cost of goods available for sale is actually beginning inventory+ Net purchases + Freight in because shipping costs are inventoriable costs. I am assuming that the cost of goods available for sale figure (1,200,000) already included these numbers because if I added the freight in and subtracted the purchase discounts, I would end up with 1,220,000 as cost of goods available for sale. Now once I subtract my ending inventory out (1,220,000-120,000) this leaves me with a cost of goods sold of 1,100,000, which can't be right because cost of goods sold is 1,080,000. I'm just working the problem a different way to determine if I should account for the freight in and purchase discounts, or are they already included.

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[NYCaccountant]

What is the direct recognition method and installment method? I've never heard of those terms before when discussing an allowance for bad debt. I only know as a percentage of net credit sales, and as a percentage of accounts receivable. Either way, both methods require to make estimates as to the amount of bad debt. Anytime two accounting principles require you to make estimates. That is a change in principle that is inseparable from a change in estimate. Both are principles, but both require you to estimate.

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[NYCaccountant]

What is the direct recognition method and installment method? I've never heard of those terms before when discussing an allowance for bad debt. I only know as a percentage of net credit sales, and as a percentage of accounts receivable. Either way, both methods require to make estimates as to the amount of bad debt. Anytime two accounting principles require you to make estimates. That is a change in principle that is inseparable from a change in estimate. Both are principles, but both require you to estimate.

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[Anonymous]

@Monir – What I don't understand is why going from a non-GAAP method (direct write-off) to a GAAP method (% allowance for uncollectible accts) isn't considered an error correction, which would be handled retroactively.

Sorry to muddy the waters on this one!

[Anonymous]

@Monir – What I don't understand is why going from a non-GAAP method (direct write-off) to a GAAP method (% allowance for uncollectible accts) isn't considered an error correction, which would be handled retroactively.

Sorry to muddy the waters on this one!

[Anonymous]

@DJN This would be change in estimate “This situation is a change in method which is considered a change in estimate effected by a change in principle” OR “When it is impossible to determine whether a change in accounting principle or a changein estimate has occurred, the change should be considered as a change in estimate”

I am looking for an easier explanation. In simple english if the change was from in non-gaap to gaap this somehow means you can reliably estimate your future doutful accounts.

Hope this helps.

[Anonymous]

@DJN This would be change in estimate “This situation is a change in method which is considered a change in estimate effected by a change in principle” OR “When it is impossible to determine whether a change in accounting principle or a changein estimate has occurred, the change should be considered as a change in estimate”

I am looking for an easier explanation. In simple english if the change was from in non-gaap to gaap this somehow means you can reliably estimate your future doutful accounts.

Hope this helps.

[Anonymous]

Thanks guys. I know that freight in is inventoriable but I just wasn't sure if it was already factored into the net sales figure…which I guess it should be, right?

[Anonymous]

Thanks guys. I know that freight in is inventoriable but I just wasn't sure if it was already factored into the net sales figure…which I guess it should be, right?

[ZSRizvi]

I find it amusing that the AICPA only releases questions that are easy on the difficulty scale.

I was going over the NFP questions in Becker and found it depressing that actual exam day questions will most certainly not be as easy.

[insert labored sigh here]

BEC (July 2013)
FAR (OCT 2013)
REG (NOV 2013)
AUD (JAN 2014)

The CPA Exam is an opponent that not even the Fellowship of the Ring would want to come across.

I have a long...long...journey ahead of me.

[ZSRizvi]

I find it amusing that the AICPA only releases questions that are easy on the difficulty scale.

I was going over the NFP questions in Becker and found it depressing that actual exam day questions will most certainly not be as easy.

[insert labored sigh here]

BEC (July 2013)
FAR (OCT 2013)
REG (NOV 2013)
AUD (JAN 2014)

The CPA Exam is an opponent that not even the Fellowship of the Ring would want to come across.

I have a long...long...journey ahead of me.

[NYCaccountant]

@ZSR I've been doing the Wiley book questions. I've heard they are harder than the actual exam.

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[NYCaccountant]

@ZSR I've been doing the Wiley book questions. I've heard they are harder than the actual exam.

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[ZSRizvi]

@NYC

Seriously? I feel like the test bank questions are relatively easy/moderately-difficult but nothing that screams out “I will fail if these questions pop up on the exam.”

If that's the case, I guess it's good for us then?

To be honest, I'm more worried about the SIMs. I have a decent grasp on J/Es but there's no knowing what panic and nerves can do to my memory.

And the research questions…I remember someone saying they're like the devil himself…LOL.

BEC (July 2013)
FAR (OCT 2013)
REG (NOV 2013)
AUD (JAN 2014)

The CPA Exam is an opponent that not even the Fellowship of the Ring would want to come across.

I have a long...long...journey ahead of me.

[Author]

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