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  • What is capital rationing?

    Capital rationing is meant to illustrate that a company does not have unlimited capital, so they would perform analysis to determine what types of capital projects would provide the greatest benefit to the company. Every company will use different metrics to determine which projects to accept or reject based on their goals.  As it relates…

  • Audit procedures to identify pending litigation?

    The AUD section of the CPA exam will test your understanding of how the audit team would identify pending litigation. Pending litigation needs to be accrued for and/or disclosed if certain requirements are met. There are two main procedures the audit team would perform for every audit: 1) Inquire with Management – Performing inquiry with…

  • Who does the internal audit team report to?

    The internal audit team consists of auditors who are employed by the company and they evaluate the internal controls and processes within the company. The internal audit team should report directly to the audit committee to have proper governance and communication of information.

  • 12 Tips to Pass the CPA Exam

    Use as many or as few of these CPA exam tips as you want! Tips to Pass the CPA Exam Passing the CPA exam starts with using the Universal CPA Review course. If you’re studying for the CPA exam, then these 12 tips will help you pass the CPA exam. These tips can be used if…

  • Passing CPA Score

    A 99 is the highest score your can receive on the CPA exam. How likely is it that you will score a 99 on any section of the CPA exam? Well, it’s highly unlikely, but aim high, miss high, right? While the passing CPA score is a 75%, Ryan, a Universal CPA student, recently scored…

  • Gross Profit Method – Impact of overstating the gross profit %

    A company will often use the gross profit method to estimate cost of goods sold and ending inventory during an interim period. A company would use this method if they do not have a perpetual inventory system and they only perform a physical inventory count at the end of a period. The formula for calculating…

  • 3 Reasons to use Universal CPA as a supplement for the CPA exam

    You’re struggling with the review course you spent thousands of dollars on and now you’re looking for additional resources to help you prepare for the CPA exam. Good news. You’re in the right spot! While Universal CPA can be used as a stand-alone course, it is also a great supplement to other review courses for…

  • What are deferred inflows and outflows in encumbrance accounting?

    For deferred outflows of resources, its the consumption of resources that relates to future periods. This is similar to prepaid expense as we’re consuming net assets now and deferring the expense to a future period. For deferred inflows of resources, it’s the acquisition of net assets that is applicable to a future period. So for deferred…