What is economies of scale?
Economies of scale illustrate the advantages companies are able to realize from increasing their volume or output. For example, if the fixed cost to operate in the automotive industry is $100,000, then producing 100 cars instead of 5 cars represents a lower fixed cost per unit and overall cost per unit. Due to the higher […]More
What is the law of supply and demand?
The law of supply and the law of demand are two separate laws that work together to determine the optimal price point of a product (rather than the market as a whole). As a general rule, if price increases, then supply will increase, and demand will decrease. If price decreases, then demand will increase, and […]More
Types of elasticity measures in supply and demand?
To understand elasticity measures, you will need to have a solid understanding of the law of supply and demand. In short, the law of supply and demand says that a price increase will increase supply and decrease consumer demand, but a price decrease will decrease supply and increase demand. Aside from changes in price, there […]More
Using data mining to detect fraudulent credit card transactions
Data mining is when historical data is analyzed to identify patterns and trends to make business decisions and predict outcomes. So if a company had a large amount of historical credit card transaction data, they could identify the characteristics of charges that ultimately were fraudulent. The company could then use the characteristics identified to create […]More
What is an absolute cell reference (BEC exam)?
The BEC section of the CPA exam might test your knowledge on spreadsheets the various types of cell references. The common references include absolute cell references, mixed cell references, and relative cell references. An absolute cell reference is when a spreadsheet refers to a specific cell, no matter where the formula or reference is on […]More
How does XBRL work?
What does XBRL stand for? XBRL stands for Extensible Business Reporting Language and is designed to exchange financial information on the internet. XBRL provides consistency of financial statement classification across companies How does XBRL convert financial statements? Below are the basic steps of converting financial statements to XBRL formatted financial statements: Step 1) Accountant takes […]More
What is cybersecurity and what are the different types of cyber attacks?
The BEC section of the CPA exam requires you to understand the common types of cyber attacks and organizations can implement controls to prevent or detect these cyber attacks. Cybersecurity is the practice of protecting organizations from these cyber attacks. With the increasing reliance on systems and networks, the need for cybersecurity is more important […]More
What is a pharming attack?
Pharming is a topic that is tested on the BEC section of the CPA exam. Pharming relates to cybersecurity as it is a specific type of cyber attack. A pharming attack is when a hacker mimics a real website and redirects a user to the fake website. For example, if the web user was trying […]More