CPA EXAM:
Applying
Exam Dates
Structure
Non Citizen?

SEMINARS:
Live Seminars
East
Central
West
Objectives
Cost
Guarantee
Endorsements
Online Signup
Signup Form
Sample
Audit Terms
Download-Brochure
FAQ

SELF STUDY:
Paper Books
E-Books
E-book Help
Order Paper Books Online
Order Form

SITEMAP:
Site map

Blog of Recently Asked Questions

This is a blog for people currently registered in AIS seminars, giving questions recently asked by others in the classes, and the answers. Ken Smith and Al Francisco wrote the seminar workbook and teach the classes. They provide the answers below.

THE SEMINARS AND SELF STUDY BOOKS
THE CPA EXAM QUESTIONS AND CHANGES TO THE EXAM
AUD EXAM SECTION
BEC EXAM SECTION
FAR EXAM SECTION
REG EXAM SECTION

THE SEMINARS AND SELF STUDY BOOKS
What is the easiest seminar location to fly to? I'll have to travel, but want a location most convenient to a major airport. Thanks, Joe.

Hi Joe
That is easy - Nashville, if we offer the sections you need there. The hotel is about five minutes from the airport terminal and the hotel will send a van to meet your flight.
In our other locations it takes significantly longer to get from the airport to the hotel.
Al

Do you send the work book before the course? Could you send me some more information regarding the Regulation course? I am extremely interested in this. Thanks. Leslie

Yes Leslie, when you sign up for the course we ship the workbook.
There is enough reading to keep you busy for a full week of evenings plus the weekend.
The class is two full days (9 hours a day). We cover the law part the first part of Saturday, then other regulation, then go into tax.
The workbook has summaries for you to read outside of class as well as note taking pages with questions for you to work during the class. We go over those questions and also hand out complete answer explanations for the computational questions (tax) at the end of class.
I’ll be happy to answer any other questions you might have...
Al

How late can I sign up for seminar?
Thanks for information, could you let me know about how late could I wait to let you know if I was going to be able to attend? Trying to work the October weekend into my schedule. Thanks, Theresa

Hi Theresa
Hotels are quite busy with meetings in Oct/Nov, so we’re in a meeting room in Nashville that seats only 17 people. Fortunately it is very quiet, which really helps people study.
It is likely the room will fill and we’ll have to turn people away, but I wouldn’t expect that to happen before one to two weeks before the class.
As the time approaches you can e-mail me or call Yvette at the number below. We’ll be happy to let you know how many seats are left.
Best wishes...
Al

Seminar schedule preference
Why is AUD and FAR scheduled so late in November? This only gives about a week and ½ to take both exams before the window closes. Carol

Hi Carol
We keep a list of requests and schedule the classes when most people request them.
In the past people did best in the seminars if they took the exam between one and two weeks after the seminar for that section.
We find that the majority of people schedule their exam at the very end of the testing window so they don’t have to wait so long for their scores. So the people who requested the seminar are the reason the seminar is scheduled these dates.
We’re also offering AUD and FAR in Houston and Nashville earlier in the window because people requested them then in those cities. Many people tell us they prefer to travel to take the seminar because it takes them away from the distractions of home and the office.
Best wishes...
Al

State Board CPE Sponsor accreditation
Dear Sir,
I will be attending your course in Dallas on the 12th. I asked when I called to enroll if this could be provided as CPE and was told that we would receive a certificate, but that I would have to check to see if it meets specific CPE requirements.
Te reason I am asking is because if I get CPE credit for this course then I can be reimbursed for my expenses. My firm doesn’t pay for review courses, however if I could get CPE credit they will. They won’t allow us to count it as CPE time and require us to take vacation unless we can provide a CPE certificate.
Any assistance with this matter is greatly appreciated. Sincerely, Jennifer

Hi Jennifer
Some firms, corporations, and government agencies have internal CPE requirements and give credit for our seminar if it meets their requirements.
Other firms have specific requirements for their CPE. Our seminar is intended to help you pass the CPA exam, and everything we do is aimed at that.
Our completion certificate does tell the number of hours spent in the class for each section if that will satisfy the needs of your firm.
Best wishes...
Al

THE CPA EXAM QUESTIONS AND CHANGES TO THE EXAM
Are ‘advisory scores’ reliable? Part of me is worried that the 75 score showing online could change because they call it ‘advisory’. John

Good question John! The state boards are responsible for reporting your score to you based on the exam they decide to administer. So they could change the “advisory” score sent to the state by the AICPA. I think that is very unlikely though – if they lowered it they’d really be at risk of lawsuits! Al

State Board requirements
Hi. I have a question about the requirements to take the CPA. I am currently in college graduating with a degree in Business Management and Administartion with a Concentration in Accounting.
I have taken all Accounting courses except Advance Accounting, Auditing, and Comtemporary Problems. I am graduating with 150 credits.
Do requirements for the CPA require that I must graduate with an Accounting Degree or is it enough that, after I graduate, I will be going back to college only to take those 3 classes. (Advanced Accounting, Auditing, and Comtemporary Problems.) So by doing this, I will have gotten credit for those classes but I would not have graduated with the Accounting Degree. Thank you very much. Devorah

Hi Devorah
It depends on what state you are applying to. Each state issues their own CPA certificate, and each has their own education requirements.
They all use the uniform CPA exam, but the laws in each state are somewhat different.
You can find a link to your state board at www.AIS-CPA.com/boards.html (scroll down on that page until you find your state board).
Best wishes...
Al

Using research tool for specific simulation questions
Hello- I have a question and will be attending this weekends training in Houston.
Will you be going over how to use and be more efficient on using the research tab on simulations? More specifically, can you use the research tab to look up something very specific on tax on a simulation? For example, if you were asked on a simulation about what amount of tax owed would be subject to interest and penalty if paid late, could you research to get the general rule? Thanks!Freddy

Hi Freddy
Yes, you can jump back and forth between the tabs as much as you want once you have completed the multiple choice. There is no longer a requirement to complete one simulation before starting another.
We recommend keeping an eye on your clock, but by all means, if you have extra time, use the research tool to look up important rules for the other tabs.
See you this weekend...
Al

Registered as CPA with state board?
Good morning,
I recently hired an accountant that reported to have her CPA license. As an accountant myself, her work seemed sub-par for a CPA and I wasn't very impressed. I ultimately went on NYSed.gov and her license came up as not registered. I asked her about it, and she just said that she had been out of work for a while and hadn't been able to do her continuing ed to maintain her license, but that she was still certified and that it "didn't matter."
Having done public accounting under another CPA for a couple years, I know how important keeping up with continuing education is, and that by not fulfilling that requirement, her license could become inactive.
My question for you is what the repercussions are for her holding out to be a CPA when her license isn't valid. I haven't paid her yet and am debating where to go forward from here. Any advise you could provide as far as the AICPA guidelines would be appreciated. Sincerely,- Michael

Hi Michael
We aren’t familiar with the laws of NY, but most states permit only those who have a valid license to practice public accounting as a CPA. The AICPA code of conduct wouldn’t permit this either, but the state is the one with the legal authority that can impose fines and other penalties.
It looks like the state’s rules are at http://www.op.nysed.gov/prof/cpa/cpabroch.htm
Anyone who holds themselves out to the public as a CPA should be listed in their current registry at http://www.op.nysed.gov/opsearches.htm
Hope this helps!
Al

Weak multiple choice score
In the results for both exams I scored weaker across the board in all topic areas of the multiple choice, but somehow I scored stronger both times on the simulations. I guess the bright side is that I have the ability to increase my score in all areas. Colin

Hi again Colin
I’ve been thinking more about your multiple choice scores. If you are doing well in the simulations the problem definitely isn’t a lack of knowledge – you know the rules.
One thing you might consider is your approach to the multiple choice. It is easy to rush through them since many look like questions you’ve studied and know the answers to.
They aren’t the same questions – they change one darned word in a question, and then it has a different answer. Many people don’t read carefully enough to see that and miss questions they shouldn’t.
You might treat a multiple choice as four true/false questions. Ask yourself whether each choice is true or false and mark "T" or "F" next to that choice on your scratch pad. If you find only one "true" choice among the answers you are fortunate. If there is more than one "true" answer, read those choices again carefully. There may be one word that changes your mind. If you cannot eliminate three answers, select the "least-worst" alternative, and go on to the next question. Fortunately you have time to practice this approach, and perhaps jot down more key words from the question on your scratch pad to emphasize what the question is actually asking.
In the longer questions you might read the last sentence first and write down exactly what they are asking for before reading the facts above. That helps you focus on what is relevant to the answer and not be distracted by the other information. Hope this helps!
Al

2011 exam changes
I recieved my REG exam score and I got a 58 I had previously had taken the REG section and made a 64. I don't know where I went wrong. What do you suggest I do? I've taken the REG exam numerous times since July 2010. Everytime I ve taken it I score point higher and this time I scored lower. Thanks, Herminia

Hi Herminia
Oh no – I’m so sorry to hear that.
The exam, especially the simulations, changed earlier this year. Since the REG doesn’t have the written communications now it is a significantly different examination. Those changes in the exam mean that some people are doing better on the new exam format, and others not so well.
Did they send you an analysis of how you did on the various topics and question types? I’d start by targeting those areas and question types in which your performance was relatively weaker. You have a greater opportunity to add points in those areas.
I hope this helps give you an idea of an approach that might be helpful...
Al

AUD EXAM SECTION
Hi Al,
The terms "other information" and "supplementary information" are they the same thing?
Getting confused with the way they are being referred to in the reviewer.
Thank you, Maria

Hi Maria
Good question! “other information” refers to something in a corporation’s annual report other than the financial statements and the audit report. An example is the president’s letter to the stockholders of the corporation at the beginning of the annual report. This term specifically excludes required supplementary information.
“supplementary information” refers to disclosures required by the FASB which are not part of the basis financial statements.
Al

BEC EXAM SECTION
Subject: BEC PG 83 Question 33 Hi Al, I took the AIS BEC review seminar last Friday and have a question about one of the problems. I looked at the solution in the back, but was also curious if I could work it differently. I would like to compare the total operating income before the elimination and after the elimination to determine the answer. I decided that the total operating income would be 896,000 if there was no elimination. I then tried to go step by step to determine what the income would be with the elimination of A. This is where I had difficulty. Please read what I have so far and please let me know if I am missing anything. Sales Revenue 2,478,000 Cost of Sales 1,140,000 (I assumed the COGS would be the same since it said the entire share of the fc would be eliminated and also I assumed the variable costs of A would be eliminated) Fixed Costs 724000-221740=502260 Variable Costs- This is where I am having the most difficulty. 2478000/3572000=.693729*724000=502259.76 which is greater than the total selling and admin expenses of division B. I am confused how the fixed costs are allocated by sales revenue if when you multiply out the percentage, the fixed cost is greater than the total expense. I was planning on taking the total expense from division b and subtracting out the fixed cost to get the total variable cost. I then was planning on comparing the operating income that I get in this calculation vs the original operating income of 896,000. Please let me know if I am going about this the incorrect way. Thanks for your help. Regards, Andrea, Jan 19, 2012

Hi Andrea
Your reasoning is right on the money! Finished teaching the AUD/FAR Houston classes, flew home, and finally have had a few minutes to check the question. I’ve rewritten it (see below) to correct the typos.
Thanks for pointing this out – our experience is that people in the past who studied in this depth have done very well on the exam – and I certainly hope that is your experience! Al

IT Fraudulent schemes include:
• Pharming redirects a website's traffic to another, bogus website. Pharming can be conducted either by changing the hosts file on a victim’s computer or by a vulnerability in DNS (Domain Name Server) software. DNS servers are like telephone books that convert URL names their real addresses.
• Phishing attempts to acquire information such as usernames, passwords, and credit card details by masquerading as a trustworthy entity in an electronic communication. Messages supposedly from popular social web sites, auction sites, online payment processors or IT administrators are used. Phishing often directs users to enter details at a fake website that looks almost identical to the legitimate one.
• Vishing is the criminal practice of using social engineering over the telephone system, most often using features facilitated by Voice over IP (VoIP), to gain access to private personal and financial information from the public for the purpose of financial reward. Vishing is used to steal credit card numbers or other information from individuals.
IT Internal Controls might include automatic logoff of inactive terminals after a time period, a maximum number of login attempts, and restricting users to specific terminals.

Computation of Price Elasticity of Demand
Good morning all,
I am studying for BEC and on pg 37 I am confused as to why for the computation of change in quantity it is 1,000,000 - 950,000 though when I go to calculate change in price it flips to $2.50 - $2.00 I had suspected it would be $2.00 - $2.50 to be consistent with the change in quantity.
Have an an enjoyable day.
All the best, Elizabeth

Hello Elizabeth
You are correct – although mathematically the elasticity is expressed as the absolute value, so the sign isn’t significant.
But the concept of absolute value doesn’t seem to be significant for the CPA exam, and we’re trying to get the idea across without teaching more math than the minimum concepts people need to pass the exam.
Al

Cost of Goods Sold versus Cost of Goods Manufactured
Good morning Al,
I took the below BEC course taught by Ken, and I have been doing the homework material. One question I don't understand is question 69 from the "Planning Handout Page BEC 613" . In calculating cost of goods manufactured during the year why is Ending Finished goods not considered? I thought the formula would be
Beginning Finished Goods + Goods manufactured - Goods available for sale = Ending Finished Goods
But instead the answer explanation has:
Beginning Finished goods + Goods manufactured = Goods availiable for sale
Thanks for the help.Tien

Hi Tien... these definitions might help.
Cost of good manufactured means the cost of goods finished and transferred from work in process to the finished goods inventory during the period. It is found by taking beginning work in process, adding costs incurred (raw material, direct labor, and overhead applied during the period) and subtracting ending work in process.
Cost of goods sold is the cost of goods taken from the finished goods inventory during the period. It is found by taking beginning finished goods, adding the cost of goods manufactured (transferred from work in process) and subtracting ending finished goods inventory.
I’ll also add them to the BEC summaries for people who take the course in the future – thanks for letting us know it wasn’t there!
Al

FAR EXAM SECTION
Dear Al:
Can you please tell me how to get the software to practice research for the exam. I am bleary-eyed right now and cannot find the info on the CPA exam . Is it in the instructions to candidate or can you just send the page to me. Thank you for your help.
Deborah

Sure Deborah!
Please go to https://www.nasba.org/NASBAWeb.nsf/ENCD and sign up for the free six-month subscription to the research software. You’ll find it easier to use on the exam if you practice with it in advance.
Al

REG EXAM SECTION
Al
In reg page 44, should question two's letter c be 53,000? In my book it is 52,000. Pete, Feb. 6, 2012

Thanks for pointing that out Pete- right you are.
I'll post your question and answer on our "recently asked questions" blog for other people in the REG seminar to see. Regards,
Al

Al, I have two questions for you: 1) Does your prep material presume that the reader is ‘accounting/tax’ savvy or has previous experience in this line? 2) Are the summaries+ seminar enough preparation for people who don’t have previous accounting/tax background?
Going through REG summaries there are a few concepts in Tax that are very difficult to understand and memorize and I am wondering whether the seminar+Summaries are meant more to be a ‘supplement’ to other preparation or are sufficient preparation in their entirety? See you Friday!
Appoorva, Jan. 9, 2012

Hello Appoorva
We don’t assume work experience, just the usual classes taken to graduate in accounting.
Yes, there are some difficult concepts. Fortunately, the exam doesn’t normally test those in great depth, just a surface level. Our intent is to introduce those concepts (which most people in the course haven’t seen before) at the level where you can earn most of the points, but not to make you an expert in those topics. In the real world you can look them up once you’ve passed the exam!
Most people who have taken the exam before tell us their scores go up significantly after the seminar. That is the goal – to add as many points to your score as we can in the seminar, outside reading, and homework. Best wishes...
Al

Hi Yvette, I have a quick question, related to Regulation seminar taken in Dallas just recently in October. Could you forward this question to the instructor. Question 5, REG 60 question,
Barker owns 40% interest in the capital and profits of the Murphy and Barker partnership. During year A Barker sold securities to the partnership for their fair market value of $36,000. Barker's adjusted tax basis in the securities was $24,000. How much gain should Barker recognize on this transaction on his year A tax return?
I originally selected 0, but the correct amount was $12k ($36k-$24k). Not sure why it wouldn't be 0. I thought you wouldn't recognize a gain or loss between transactions between partner and partnership.
Thank you in advance. Ricardo

Hi Ricardo
You do recognize gains on transactions (sales or exchanges) between a partner and a partnership. Losses aren’t recognized for a partner that owns an interest of more than 50% in the partnership however.
And you don’t recognize gains or losses on contributions of assets by a partner to a partnership – the partnership takes the partner’s basis in the property.
Al

Hi Al,
Can you please help me with reg 69 number 5? I am confused on how to get the 150,000. Thanks for your help.
Andrea

Sure Andrea
The 80% dividend exclusion is $128,000. Taxable income before the deduction is $400,000 + $160,000 - $410,000 or $150.000. The tentative exclusion of $128,000 subtracted from taxable income before the exclusion of $150,000 leaves a positive taxable income, so the limit of 80% of taxable income (80% of $150,000) applies, and the exclusion is $120,000.
Hope this helps...
Al

Hi Al,
I took your class last weekend and have a few questions on the REG multiple choice you went over in class. Could you please explain number 2 and 4 on REG 21 in more detail? On number 2, why must all of the sellers except for the retailers file a financing statement or have possession of the goods?
On number 4, why does Hamilton have priority? Thanks for your help.
Regards, Andrea

Hi Andrea
#2, REG page 21. There are three ways to perfect a security interest, possession, automatic perfection of a PMSI, and filing a financing statement. The retailers are selling to consumers, so they have automatic perfection with a PMSI. The manufacturers and wholesalers are selling to businesses, not to consumers, so they don’t have automatic perfection of a PMSI, leaving only possession or filing available for them to perfect.
#4, REG page 21. Hamilton has priority because of the filed financing statement. If Mobray had bought from inventory in the ordinary course of business Mobray would be safe, but he bought at a garage sale, not in the ordinary course of business. The financing statement is valid against Mobray. Hope this helps... Al

Hi Ken
Question 20 pg. REG 139 answer indicated that the wife's brothers income was too much to be counted as a dependent. What is the dollar amount that disqualifies him? I thought it was the dependency exemption amt of 3750 that would disqualify him.
Thx for your response in advance.
Whitney

Hi Whitney,
Thanks for noticing. We forgot to change the problem when the new exemption amount exceeded the income in the problem. We will change it now so that the brother is earning $4,700 (and the son is earning $5,000). That will avoid the problem for several years. Your understanding of the rule is correct.
Ken

Hey Al,
I have a quick question on the law homework that you gave us for the Houston REG class last weekend.
Pg. 108-109 in the REG book - Number 53-55. Does signing a security agreement automatically imply the goods were purchased on credit? Just trying to clarify the fact that Office Suppliers is a PMSI because of this.
Thanks, Alec

Hi Alec
A security agreement is a document signed by the owner of property to give a creditor the right the sell the property and use the proceeds to pay off a debt owed by the property owner.
You might own property that you had purchased for cash, but need a loan for some other reason. Say you borrowed money from your bank and gave them the right to repossess the inventory you already own for your business, even though you had bought that inventory for cash.
So it isn’t necessarily true that signing a security agreement means the collateral was purchased on credit. In the question you mention the security agreement was signed on the day the buyer took possession (and title) to the copier. That implies to me that the sale was for credit and was secured by title to the copier.
When I wrote that question I assumed the loan was used to buy the copier, and I believe most questions on the exam make the same assumption.
Al

Call AIS Toll Free at (800) 635-9442

A real person in the Mountain Time zone answers this number weekdays between 9 and 5.

AIS...We provide the formula....

Accounting Institute Seminars® (AIS) provides intensive review courses for people taking the United States CPA examination. These seminars are taught in person by one of the two authors of the course and are offered in a number of cities in the U.S. each year.

For information on the seminars, return to the CPA Exam Home Page at www.AIS-CPA.com

We also offer self study CPA exam books written by the same authors. Most are available on-line, for download to your computer. The electronic version is less expensive than paper books. You can magnify pages on your screen, fill the screen (view - full screen), search for terms, and print pages. Best of all, you can start studying it now instead of waiting days for it to arrive!

Here is the list of our currently available E-BOOKS CPA REVIEW.

For more information on e-books or for paper copies, refer to CPA REVIEW SELF STUDY BOOKS.

Comments or questions to Yvette at

Return to Top of This Page

Copyright© 1995-2011 Accounting Institute Seminars®, Inc. All Rights Reserved.