MPoni123
offlineMember
An exam trick you can use on exam day per Cindy at Yaeger Homestudy...if the question gives nice whole numbers (like 40, 60, 90 etc) you can assume 360 days. If the days are ugly, like 42, 47, etc. you can assume 365. However, the question usually states "based on a 365 calendar year" or something so you know what number to use.
Trevor
offlineMember
Just to follow up on what MPoni said, think of it like this... If the question says 90 days - you are assuming 3 months (they might even say that), so thats 30 days/mo. multiply that by 12 and you get 360. I think it helps the candidate in the sense that you do not have to know how many days are in a specific month...
big shot cpa
offlineMember
It's def 360 days! I remember trying to calc multiple questions on the exam w 365 and it won't be any of the answers. So I used 360 and wohhoo, it worked!
shutterbug
offlineMember
I know, old topic but I just came across this question on cpareviewforfree.com
Your supplier gives you credit terms of 2/10 net 30. This means that if you pay within 10 days you take a 2% discount. If not, the balance is due in full within 30 days. What is the annual percentage cost to you of not taking the discount and paying on the 30th day?
A 2%
B 37.24%
C 36%
D 24%
I calculated with 360 days and got C 36%, but the answer was B (365 days). Urgh, I hope the exam states how many days in a year.
Your choice is to pay $.98 on the dollar on day 10 or $1 on day 30. The extra cost is .02/.98 or .0204081. You save 20 days (30-10) by paying later. To annualize the cost take 365 days and divide by the days saved. 365/20=18.25 and multiply this by the .0204081 percent cost ( .0204081) (18.25) = 37.24%
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