November 25, 2018 at 8:09 pm #2071043Tiramisu McNuggetsParticipant
I started studying for the FAR exam this week and my exam is February 9th. I know for some, 12 weeks seems way too long but I really didn't properly learn the material in college. I almost had to just memorize it all cuz my professor threw so much at once and I'm practically learning it all new this time around I feel like.
Anyways, I'm doing 1 chapter a week and the last 2 weeks being review. But here and there I will do progress tests to remind myself of older topics.
But for F1 I'm afraid that thats maybe one of the easier chapters yet I'm struggling so much with Revenue recognition and Adjusting entries in terms of the mathematic MCQ. They murdered me, like 30% I got on them. But the other 6 modules I scores between 60 and 90%.
Any advice???November 26, 2018 at 10:13 pm #2072459Accountant405Participant
Do not feel bad at all! I am on my last part of the CPA exam which is FAR and I felt like Becker did not do a very good job in certain modules in FAR and that was one of them for sure! I have used Becker for all my parts and the other 3 were great. I have had multiple issues with FAR were I read the text watch the video and then try the multiple choice questions and feel like I am being asked questions that were not even covered in the text, or the MCQ comes from an angle that the text did not cover. If I can give you any advice it would be do not take 3 months to study for FAR there is so much information that after a month when you go back to the first few chapters you study it going to feel like it’s the first time you have seen it. I did the same thing with my first attempt with FAR and after 2 weeks I could not even remember the stuff I study the week before because it’s so much Information. When I got done with chapter 10 governmental I went back to chapter 1 and I could not remember anything so I ended trying to go back through all the chapter again because it had been so long since I saw the material. So I did not spend my last week or two reviewing I spent it trying to go back through everything I couldn’t remember which is so much information. I know everyone is different but hopefully that helps. FAR is just nasty and a beastNovember 27, 2018 at 12:22 pm #2073116Mike030882Participant
The basic Revenue Receipts J/Es (in general fund) is similar to for-profit world.
For these exams, I tried to find some connective tissue and logic. To keep things straight, I summarized the following in my FAR notes:
(1). Also not an entry but you have to know what type of income it is. I have a memory trick. It's lame and stupid but so is this topic at times. Think of PREIST when you think of Property taxes, REal estate, Income taxes, Sales, Taxes from other governments. Some taxes, like some priests are crooked like the spelling I used and require more steps. Some priests are not crooked and can be treated more easily
(2a) For PREIST income. Not an entry, but you must know the basics that the revenue recognized is both available (considered available to pay current expenditures) and measurable (collectible within 60 days of end of fiscal year). This isn't too dissimilar to the constructive receipt doctrine. Except, that governmental accounting is a current resources focus. In other words, available and measurable. Then, you have to reconcile this to the government wide financials, but this is beyond your question.
(2b) Impose a levy (eg 108G) in real estate taxes and estimate an uncollectible amount (eg 8G). Revenue can be considered available and measurable, if coll wi 60 days. Thus DR Taxes Receivable for the imposed levy bc it is the tax (or sales of a profit company) due. Unlike the traditional for-profit entry for initial income recognition you have 2 not one CRs–One for a Estimated Uncollectible of 8G and another for the balance to a Revenue Account.
(2c) Once you have collections, you make 2 entries. First, Increase cash (DR) and reduce the receivable (CR) for the receipts (eg 106G). This is similar to cash proceeds received in for profit world. The added step is to Reduce the collectible account and increase the revenue account, by a plug figure. This requires a use of a T Account. Est Coll has a credit balance of 8. The balance of the Receivable account after part (2) and the first collection entry is 2G (108 tax levy – 106 actual collections); this balance becomes the Ending Balance of Est Collections; solve for X un Estimated Collections acct for the balance of the second entry here. This second step has a similar machination to adjusting AR for recoveries under Balance Sheet approach for profit companies.
(3) For non-PREIST income, it becomes simpler, IMO. Eg A govt coll collects revenue from on-street parking meters. Debit Cash and Cr Revenue for proceeds received.
Hopefully that helps clear things up a little. I tried my best to approach each test logically and understand the logic for the various accounting treatments rather than just try to memorize. In practice, I wound up memorizing it.
Also, if I got something wrong, please let me know on here.
Best of luck, all.February 10, 2020 at 2:46 pm #29260292017cpaParticipant
I am currently studying FAR F1 adjusting journal entries and I felt like the Simulation was so confusing and didn't understand it. I also feel like you that I didn't learn much in college and am relearning everything but I noticed you passed FAR (Congratulations!!). Did you change your study habits after this post? Did you feel you studied too long? Did you look into other resousrces to understand adjusting journal entries or did you just move forward and hope for the best?
Any tips or suggestions are welcome! Also congrats on being one test away and thanks for posting on here because it helps.February 10, 2020 at 3:24 pm #2926089Biff TannenParticipant
I got a simulation on adjusting entries. It was a in the ass. I probably answered about 30% of the sim and I filled out the remaining answers as 0. I ended up passing FAR with a 79. It was probably a protest sim, thank god
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