[Tootsie]

So I thought it could be fun to have a game where we post FAR questions to help us study and if you know the answer, post it and ask another question. I did this for AUD and BEC as well. 🙂 I’ll go first.

True/False

Interim financial reporting is required under US GAAP and IFRS.

FAR - 76
AUD - 88!!! DONE!!!!!!!!
BEC - 76
REG - 77

never, never, never give up

[Amay]

LOL Amor! I'll come up with simpler ones next time, although you'll thank me once you pass :p

BEC: 73, 81
AUD: 85
FAR: 71, 77
REG: 74, 75...finally DONE! 😀

*This is my 2nd attempt at the CPA exam. For all of you who have failed this exam many times, given up on it, or taken a break like me, remember that it is still possible to finish what you started...failure is the opportunity to begin again more intelligently 🙂

[Amay]

LOL Amor! I'll come up with simpler ones next time, although you'll thank me once you pass :p

BEC: 73, 81
AUD: 85
FAR: 71, 77
REG: 74, 75...finally DONE! 😀

*This is my 2nd attempt at the CPA exam. For all of you who have failed this exam many times, given up on it, or taken a break like me, remember that it is still possible to finish what you started...failure is the opportunity to begin again more intelligently 🙂

[Tootsie]

@Amor, I think that is true. Trading securities are current investments and I am assuming the question is referring to a current investment (less than 1 year).

Goodwill is amortized – true/false?

FAR - 76
AUD - 88!!! DONE!!!!!!!!
BEC - 76
REG - 77

never, never, never give up

[Tootsie]

@Amor, I think that is true. Trading securities are current investments and I am assuming the question is referring to a current investment (less than 1 year).

Goodwill is amortized – true/false?

FAR - 76
AUD - 88!!! DONE!!!!!!!!
BEC - 76
REG - 77

never, never, never give up

[Anonymous]

@Totsie, false. GW is not amortized, but is subject for impairment test at least annually.

ABC Co. purchased an investment in XYZ Co. when ABC's management is unsure of the ultimate disposition of this investment. This investment is neither classified as trading security nor HTM. It is classified as AFS.

True or false?

[Anonymous]

@Totsie, false. GW is not amortized, but is subject for impairment test at least annually.

ABC Co. purchased an investment in XYZ Co. when ABC's management is unsure of the ultimate disposition of this investment. This investment is neither classified as trading security nor HTM. It is classified as AFS.

True or false?

[jhawkins1010]

I'm going to go with TRUE for $500. AFS is pretty much all securities not classified as HTM or Trading. Since there's no maturity date and it's not a short-term investment, AFS seems reasonable.

Roth, Inc. received from a customer a 1-year, $500,000 note bearing annual interest of 8%. After holding the note for 6 months, Roth discounted the note at Regional Bank at an effective interest rate of 10%. What amount of cash did ROth receive from the bank?

A. $540,000

B. $528,400

C. $513,000

D. $486,000

[jhawkins1010]

I'm going to go with TRUE for $500. AFS is pretty much all securities not classified as HTM or Trading. Since there's no maturity date and it's not a short-term investment, AFS seems reasonable.

Roth, Inc. received from a customer a 1-year, $500,000 note bearing annual interest of 8%. After holding the note for 6 months, Roth discounted the note at Regional Bank at an effective interest rate of 10%. What amount of cash did ROth receive from the bank?

A. $540,000

B. $528,400

C. $513,000

D. $486,000

[Anonymous]

My answer is C.

@Jhawkins1010, true is correct. Please claim your $500 from Tootsie.

[Anonymous]

My answer is C.

@Jhawkins1010, true is correct. Please claim your $500 from Tootsie.

[jhawkins1010]

$513,000 is correct!

[jhawkins1010]

$513,000 is correct!

[Anonymous]

How do you get $513,000?

[Anonymous]

How do you get $513,000?

[Anonymous]

$500,000 x 108% = $540,000

$540,000 x 10% = $54,000 x 6/12 = $27,000

$540,000 – $27,000 = $513,000

[Author]

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