[DocJ]

AR, uncollectibles, bad debt expense, allowance method, direct write off method, income statement approach, balance sheet approach…

I just can’t wrap my head around ANY of it, man. Using Wiley here, and maybe I’m stupid or they’re not explaining it well, but literally none of it makes sense even after like 3-4 read-throughs of each chapter. Desperately need an ELI5.

At this point, I’m ready to just quit this section for good and focus on other stuff because my exam is 14 days from now and there’s just no time anymore.

Please tell me it’s not tested that much 😮

[Puppykoala]

this is one of the basic topics. A lot of questions will be based on those topics. I would suggest spend a little more time on them when you review the materials so that they are fresh before you take the exam. FAR is a monstor, and it won't only focus on those areas. But having a general idea about them that helps you make educated guess would be the least you have to do.

Also a lot of people rush to take exams, any section without reviewing or doing enough practices. I have talked to some colleagues who just wanted to take a shot. They failed and had to spend more time and money, endure more suffering to retake them. I'm not sure how long have you studied. If you aren't comfortable about at least 70% of the materials, I'd say take your time studying, don't rush.

[DocJ]

I've pretty much studied since like August. Already went through every Wiley lesson, now just going back and forth between re-reading lessons and doing MCQs (over 1500 in total now). It really is a monster.

AR sucks though 🙁

[AndreA]

I use Wiley and AR is not a difficult topic, just take your time and read carefully. I know this topic pretty good, but on my exam day I had a SIM with 8 exhibits and complex problem relates to this topic and I couldn't figure out how to solve it and I failed with 73, because of that. I can't disclose any specifics, but unfortunately Wiley doesn't cover AR on the way I saw on that SIM. My advice for the SIMs – check the blueprint for possible simulations, I believe someone posted those on another71.

[bigstakk]

I’d try watching a video or some other source outside of Wiley if you are not understanding the concepts of AR. It’s really simple. Direct write off method is just what it is and is not allowed for GAAP. You literally write off bad debt expense against the AR account itself. Think of allowance for bad debt as an estimated amount you write off based on a percentage of sales or some other estimate. If a specific account becomes uncollectible you write it off between AR and the allowance, so net total doesn’t change since AR is presented net of allowance for bad debt. There will be a few questions that for sure require you to have knowledge of the concepts to figure out one of the pieces to it or to convert from direct write off. As a whole though it is a more basic concept compared to how comprehensive FAR gets. For FAR I would focus on the new rev rec and lease rules and non-profit and governmental. You’ll need to know the differences for IFRS so be prepared to get one SIM and a few MCQs about IFRS as well.

[DocJ]

That all makes sense. I'm also concerned about how the heck you calculate this stuff. A lot of the MCQs I'm seeing are like “here's beginning AR and ending AR, what's the uncollectible expense?” or something. Wiley provides NO formulas for figuring that out.

[Author]

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