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FAR Study Group MCQ’s.
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September 9, 2013 at 2:08 pm #180296jeffKeymaster
FAR Resources:
Free FAR Notes & Audio – https://www.another71.com/cpa-exam-study-plan
FAR 10 Point Combo: https://www.another71.com/products-page/ten-point-combo
FAR Score Release: https://www.another71.com/cpa-exam-scores-results-release
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October 14, 2013 at 1:06 pm #477311AGIParticipant
@dante042104
When you are dealing with cost of good sold, always assume it's a “through-out” year deal. It's true that t current cost BASICALLY means taking the replacement cost today as the basis for valuation. BUT THAT'S NOT REALLY TRUE. If you are dealing with anything that is related to operation (ex. COGS, NI, Sales…) current cost = “Assume your company worked out whole year and that sales is eventually distributed through-out the year” current cost will be averaged year cost. HOWEVER, if you are talking about current cost of equipment, then current cost will be year-end cost.
Suggestion: Get a “current year cost” table and just memorize it!
At least the above is my assumption on “current cost”, from my accounting class back in school.
New York - NYC
Passed CPA Exam (11/2014)
In search for a position in NYC that will fulfills the license requirement.October 14, 2013 at 1:16 pm #477241AGIParticipant@Ameiswinkel10
This is my first exam too, but I have been studied for 6 months. (Cause I am very lazy and I just dragged on). I think if you score around 65-70 you are okay, you still have 2 weeks to run over it. If you only have a few topics to study, you can run them over in a day or two (crazy studying). Also, I suggest you go over the topic that you most likely will fail on, and the topics that FAR base heavily on. Drop those you think with guessing you can work it out, or those you think you know. Run through those topics on Wiley Test bank one more time, seek for help to get the solutions. (I really think instead of sitting in front of the computer trying to get the math out, I will ask someone for the solution so I don't waste my time.) Also, the feeling that I am “stuck” is bad, and I am not motivate to study.
Eat a lot, drink a lot of water, and sleep well. Feel happy, then you can probably run all your topics in 2-3 days and then do Wiley Test Bank at least once more (usually doing all the questions takes me 3-4 days on a “happy study mode”.)
I think re-scheduling the test will effect your mode of studying and chances of passing. But of cause, if you find that out in last minute you DEFINITELY won't pass, you should then reschedule. For me, passing the test doesn't mean I should know every question, passing means I have some crazy time and I somehow….. passed it! I really think no one will probably know what they are picking for answers after sitting in a tense test center for some hours, it's just your brain tell you its' A so you pick A. If you have a good night sleep and your brain it's clear out, it will lead you to the right answers….
New York - NYC
Passed CPA Exam (11/2014)
In search for a position in NYC that will fulfills the license requirement.October 14, 2013 at 1:16 pm #477313AGIParticipant@Ameiswinkel10
This is my first exam too, but I have been studied for 6 months. (Cause I am very lazy and I just dragged on). I think if you score around 65-70 you are okay, you still have 2 weeks to run over it. If you only have a few topics to study, you can run them over in a day or two (crazy studying). Also, I suggest you go over the topic that you most likely will fail on, and the topics that FAR base heavily on. Drop those you think with guessing you can work it out, or those you think you know. Run through those topics on Wiley Test bank one more time, seek for help to get the solutions. (I really think instead of sitting in front of the computer trying to get the math out, I will ask someone for the solution so I don't waste my time.) Also, the feeling that I am “stuck” is bad, and I am not motivate to study.
Eat a lot, drink a lot of water, and sleep well. Feel happy, then you can probably run all your topics in 2-3 days and then do Wiley Test Bank at least once more (usually doing all the questions takes me 3-4 days on a “happy study mode”.)
I think re-scheduling the test will effect your mode of studying and chances of passing. But of cause, if you find that out in last minute you DEFINITELY won't pass, you should then reschedule. For me, passing the test doesn't mean I should know every question, passing means I have some crazy time and I somehow….. passed it! I really think no one will probably know what they are picking for answers after sitting in a tense test center for some hours, it's just your brain tell you its' A so you pick A. If you have a good night sleep and your brain it's clear out, it will lead you to the right answers….
New York - NYC
Passed CPA Exam (11/2014)
In search for a position in NYC that will fulfills the license requirement.October 14, 2013 at 2:06 pm #477243AnonymousInactivethanks yellowsugar! That's how I figured they justify doing it that way but I couldn't find where they really talked about it in my text. Thanks
October 14, 2013 at 2:06 pm #477316AnonymousInactivethanks yellowsugar! That's how I figured they justify doing it that way but I couldn't find where they really talked about it in my text. Thanks
October 14, 2013 at 3:20 pm #477245jeffKeymasterOctober 14, 2013 at 3:20 pm #477318jeffKeymasterOctober 14, 2013 at 7:08 pm #477247AnonymousInactivethis question on cpaexcel doesnt make sense to me
Tag Question
Ian Co. is calculating earnings per share amounts for inclusion in the Ian's annual report to shareholders. Ian has obtained the following information from the controller's office as well as shareholder services:
Net income from January 1 to December 31 $125,000
Number of outstanding shares:
January 1 to March 31 15,000
April 1 to May 31 12,500
June 1 to December 31 17,000
In addition, Ian has issued 10,000 incentive stock options with an exercise price of $30 to its employees and a year-end market price of $25 per share. What amount is Ian's diluted earnings per share for the year ended December 31?
so the answer explanation is saying you have to take 15,000 and multiply by 3/12. but the question is saying 15,000 are outstanding from jan 1 to mar 31. so isnt that the number used to calculate eps. i shouldnt have to weight them
October 14, 2013 at 7:08 pm #477320AnonymousInactivethis question on cpaexcel doesnt make sense to me
Tag Question
Ian Co. is calculating earnings per share amounts for inclusion in the Ian's annual report to shareholders. Ian has obtained the following information from the controller's office as well as shareholder services:
Net income from January 1 to December 31 $125,000
Number of outstanding shares:
January 1 to March 31 15,000
April 1 to May 31 12,500
June 1 to December 31 17,000
In addition, Ian has issued 10,000 incentive stock options with an exercise price of $30 to its employees and a year-end market price of $25 per share. What amount is Ian's diluted earnings per share for the year ended December 31?
so the answer explanation is saying you have to take 15,000 and multiply by 3/12. but the question is saying 15,000 are outstanding from jan 1 to mar 31. so isnt that the number used to calculate eps. i shouldnt have to weight them
October 14, 2013 at 7:10 pm #477249mjp44MemberState Co. recognizes construction revenue and expenses using the percentage-of-completion method. During year 1, a single long-term project was begun, which continued through year 2. Information on the project follows:
Year 1 Year 2
Accounts receivable from construction project $100,000 $300,000
Construction expenses 105,000 192,000
Construction in progress 122,000 364,000
Partial billings on contract 100,000 420,000
A. 50,000
B. 108,000
C 250,000
D 300,000
Correct answer is A 50,000:
Balance of Construction in Process at Jan. 1, year 2 = $122,000
Plus costs (expenses) for the year 192,000
Plus gross profit x
Balance of Construction in Process Dec. 31, year 2 $364,000
Solving for x indicates that gross profit was $50,000
I understand how GP is calculated but I am confused on the construction in process account. I thought that it was treated like an inventory account where all contract expenses are recorded. So shouldnt GP amount be the contract price – ending balance of construction in process account. In this problem a contract amount is not given which threw me off.
FAR- PASSED (11/13)
REG- PASSED (2/14)
BEC- PASSED (5/14)
AUD- PASSED (8/14)If it's important to you, you will find a way. If it isn't, you will find an excuse.
October 14, 2013 at 7:10 pm #477322mjp44MemberState Co. recognizes construction revenue and expenses using the percentage-of-completion method. During year 1, a single long-term project was begun, which continued through year 2. Information on the project follows:
Year 1 Year 2
Accounts receivable from construction project $100,000 $300,000
Construction expenses 105,000 192,000
Construction in progress 122,000 364,000
Partial billings on contract 100,000 420,000
A. 50,000
B. 108,000
C 250,000
D 300,000
Correct answer is A 50,000:
Balance of Construction in Process at Jan. 1, year 2 = $122,000
Plus costs (expenses) for the year 192,000
Plus gross profit x
Balance of Construction in Process Dec. 31, year 2 $364,000
Solving for x indicates that gross profit was $50,000
I understand how GP is calculated but I am confused on the construction in process account. I thought that it was treated like an inventory account where all contract expenses are recorded. So shouldnt GP amount be the contract price – ending balance of construction in process account. In this problem a contract amount is not given which threw me off.
FAR- PASSED (11/13)
REG- PASSED (2/14)
BEC- PASSED (5/14)
AUD- PASSED (8/14)If it's important to you, you will find a way. If it isn't, you will find an excuse.
October 14, 2013 at 7:19 pm #477251lleonMember@cpa066729
You have to multiply by 3/12 because that's the portion of the year that number of shares was outstanding. The denominator in the eps equation is “weighted # of common shares” you pretty much always have to weigh the # of shares.
Jan 1 – Mar 31 = 3 months.
Licensed in Arizona
October 14, 2013 at 7:19 pm #477324lleonMember@cpa066729
You have to multiply by 3/12 because that's the portion of the year that number of shares was outstanding. The denominator in the eps equation is “weighted # of common shares” you pretty much always have to weigh the # of shares.
Jan 1 – Mar 31 = 3 months.
Licensed in Arizona
October 14, 2013 at 8:28 pm #477253AGIParticipantI think this is a very difficult question, I remember I do it wrong at least 5 times. (And while I am looking at it, I still wondered…)
I think this question is really asking for “the identity of the accounts”.
When you say “construction in process account. I thought that it was treated like an inventory account where all contract expenses are recorded.” That is PART OF THE ACCOUNT only. Not only do you roll in your expense into CIP, but you also roll other things in.
In my point of view:
1) Construction In Process (CIP): Account where you roll in all your “values” that make up this project (construction), ex. expenses, cash, inventory, overhead (I guess), etc. As the project goes on, this account build up, and after the construction is done, this account usually is credit off with asset account (debit) to be on the balance sheet. (That's what WIKI says). So from this point, we can kinda see that this account should have the same number as the asset (product of the contract). And since we value the project / asset in FAIR VALUE. We can assume that this CIP-Construction in process account really means “THE VALUE OF THIS CONSTRUCTION or WHAT I THINK OF THIS PROJECT CURRENTLY WORTH”.
2) Construction expenses: This is really the account you roll your REAL expense on (to date). It goes up along with construction in process, but it's not the same. The expense might be $100, but CIP might be $122 because of general overhead, general expense. (You know, you got to make money out from this contract to pay for regular payroll too!)
3) AR and Billing – These two account often goes up to the same amount as CIP (I think it should).
Back to the question: On year 1, actual cost is $105 (expense account), but after adding others, it's worth $122 (roll to CIP). Then on second year, $87 expense has been accumulated, causing expense account to add to $192. However, it really worth $364 to me (roll to CIP) to date. The contract is schedule to be complete by end of year 2. So which means, in year 2, since CIP is $364, Billing should be $364 also. And since Billing = invoice = contract price. We can see that GP = contract price – expense. And since contract price = billing = CIP. GP would be $364 – $192 – $122.
I don't really get why is it $364-192-122.. I would do $364-122-105, which got me $67, and pick the best choice..I think you deduct $122 because of some sort of original J/E arrangements. I will leave that for the next person to add on……..
(Basically, I am making up a story…to justify the answer.. LOL)
By the way, did you notice that out of all the possible choice, only A. $50 really make sense, even without calculation? I think most people would bet on A. $50 or B. $108, but certainly, A. $50 make more sense with the numbers provided by the question.
New York - NYC
Passed CPA Exam (11/2014)
In search for a position in NYC that will fulfills the license requirement.October 14, 2013 at 8:28 pm #477326AGIParticipantI think this is a very difficult question, I remember I do it wrong at least 5 times. (And while I am looking at it, I still wondered…)
I think this question is really asking for “the identity of the accounts”.
When you say “construction in process account. I thought that it was treated like an inventory account where all contract expenses are recorded.” That is PART OF THE ACCOUNT only. Not only do you roll in your expense into CIP, but you also roll other things in.
In my point of view:
1) Construction In Process (CIP): Account where you roll in all your “values” that make up this project (construction), ex. expenses, cash, inventory, overhead (I guess), etc. As the project goes on, this account build up, and after the construction is done, this account usually is credit off with asset account (debit) to be on the balance sheet. (That's what WIKI says). So from this point, we can kinda see that this account should have the same number as the asset (product of the contract). And since we value the project / asset in FAIR VALUE. We can assume that this CIP-Construction in process account really means “THE VALUE OF THIS CONSTRUCTION or WHAT I THINK OF THIS PROJECT CURRENTLY WORTH”.
2) Construction expenses: This is really the account you roll your REAL expense on (to date). It goes up along with construction in process, but it's not the same. The expense might be $100, but CIP might be $122 because of general overhead, general expense. (You know, you got to make money out from this contract to pay for regular payroll too!)
3) AR and Billing – These two account often goes up to the same amount as CIP (I think it should).
Back to the question: On year 1, actual cost is $105 (expense account), but after adding others, it's worth $122 (roll to CIP). Then on second year, $87 expense has been accumulated, causing expense account to add to $192. However, it really worth $364 to me (roll to CIP) to date. The contract is schedule to be complete by end of year 2. So which means, in year 2, since CIP is $364, Billing should be $364 also. And since Billing = invoice = contract price. We can see that GP = contract price – expense. And since contract price = billing = CIP. GP would be $364 – $192 – $122.
I don't really get why is it $364-192-122.. I would do $364-122-105, which got me $67, and pick the best choice..I think you deduct $122 because of some sort of original J/E arrangements. I will leave that for the next person to add on……..
(Basically, I am making up a story…to justify the answer.. LOL)
By the way, did you notice that out of all the possible choice, only A. $50 really make sense, even without calculation? I think most people would bet on A. $50 or B. $108, but certainly, A. $50 make more sense with the numbers provided by the question.
New York - NYC
Passed CPA Exam (11/2014)
In search for a position in NYC that will fulfills the license requirement. -
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