Accounting for Error Corrections
Errors are not considered to be accounting changes. These corrections could be made due to mathematical or mechanical errors when preparing the financial statements, or mistakes that have been made when determining and applying U.S. GAAP. Furthermore, if a company makes a change that is considered to be going from GAAP to Non-GAAP, it will be considered […]More
Data Visualization on the BEC Exam
Data visualization is the process of taking data sets and turning them into graphic representations. Data visualization allows you to bring data to life and allows you to “see” trends and patterns that otherwise would be very difficult to identify in data sets. Just like pictures are easier for humans to process than text, the […]More
Different types of forecasting techniques tested on the BEC section of the CPA exam
There are several different forecasting techniques that are tested on the BEC section of the CPA exam. These are techniques that businesses would use to project their revenues, cost of goods sold, and operating expenses for future periods. The methods covered in this article and video include the high low method, scenario analysis, and sensitivity […]More
What are the costs of quality?
There are four different costs of quality that you should understand: Prevention costs – Incurred to avoid quality problems. Appraisal costs – Incurred to measure and monitor activities related to quality. Internal failure costs – Incurred to remedy defects discovered before the product or service is delivered to the customer External failure costs – Incurred […]More
Accounting for Franchises
Contract related intangible assets will include franchise and licensing agreements, construction permits, broadcast rights, and service or supply contracts. Below is an outline with visuals as taught by Universal CPA Review. Franchisee Accounting – Franchise accounting is a similar concept to accounting for intangible assets, however, certain specific variables apply. Initial franchise fees – The present value […]More
Are Intangible Assets Capitalized or Expensed?
The short answer is it depends. Intangible assets (e.g., trademarks, copyrights, patents etc.) can generally present themselves on a company’s financial statements in one of two ways, they can either be purchased or developed internally. While purchased/acquired intangible assets will always be capitalized as a noncurrent asset on the balance sheet and subsequently amortized, the […]More
What is a depreciation tax shield?
In general, a tax shield is anything that reduces the taxable income for personal taxation or corporate taxation. Depreciation is considered a tax shield because depreciation expense reduces the company’s taxable income. When a company purchased a tangible asset, they are able to depreciation the cost of the asset over the useful life. Each year, […]More
How Joey finally passed the AUD section of the CPA exam
Audit is one of those subjects that I always refer to as easy to learn, yet hard to master. Sort of like skiing. After I had passed the FAR exam with an 81% I was riding a high, and thought the rest of the CPA exam would be smooth sailing. Boy was I wrong. Below […]More