# 360 Days in year for BEC?

CPA Exam Forum The Forum BEC Review 360 Days in year for BEC?

This topic contains 9 replies, has 8 voices, and was last updated by  shutterbug 4 years, 10 months ago.

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• #158604

32CPA
Participant

I am in BEC Chp 3 (Becker) and I’m seeing they use 360 days for the year in their calculations… is this normal? I thought there was 365 days.

Holidays?

#303695

michelle119
Participant

Yes a lot of the formulas are based on 360, for whatever reason. I think this might be due to excluding holidays.

#303696

MPoni123
Participant

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.

#303697

32CPA
Participant

Wow! Thanks for the advice. That’s a good trick.

#303698

Trevor
Participant

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…

#303699

big shot cpa
Participant

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!

#303700

shutterbug
Member

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%

#303701

rmm91909
Participant

I think for those types of questions it is always 365 days as that is the formula. The ones where you would see 360 versus 365 tend to be the cash conversion cycle problems or the financial ratios.

#303702

CPAMan
Participant

Use 365 days unless the question specifically tells you to use 360.

#303703

shutterbug
Member

I’ll keep that in mind, thanks. Becker still shows the APR of quick payment discount formula with 360 days (page B3-56)

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