Regulation CPA Exam Review: Explanation of Cash Basis Accounting

Roger Philipp, CPA describes Cash Basis accounting, which is the standard reporting method for individual taxpayers. Follow along closely, as Roger explains which entities and organizations are prohibited from using this method. As an added bonus, Roger clarifies the successful construction of a written communication... a very important element of the CPA Exam. This video is an excerpt from the REGULATION portion of the Roger CPA Review Online/USB course.

For more information, please visit http://www.rogercpareview.com/cpa-exam-review-course-overview.cfm

------Companion text from the Roger CPA Review REGULATION Text Book------

Cash Basis

Most individuals use the Cash basis of accounting, however the accrual method is required for purchases and sales of inventory.

• Service type businesses whose gross receipts do not exceed $10M may use the cash basis. This includes:
  
  
  • Most individuals, S-corps and individually owned Partnerships
  
  

Some entities that are prohibited from using the cash basis include:

• C corporations with gross receipts exceeding $5M
• Partnerships that have a C corporation as a partner exceeding $5M
• Tax shelters
• Certain trusts

Cash Basis:

• Recognize Income
  
  
  • Cash or property received
  • Actually or Constructively received(made available – earlier of two)
  
  
• Report Deductions
  
  
  • Cash or check is disbursed
  • Expense charged on a credit card
  
  

Resolve to Stick With Your Resolutions

Now that it is well into January, we thought we might give you a little reminder of those little things called New Year's Resolutions. You know... all those promises you made to yourself the week in between inhaling candy canes and popping those loud cardboard popper things. Still don't remember? How about "This year, I resolve to study at least 50 hours a week and pass all four parts of my CPA exam on the first try."? Remember that promise to yourself?

Only 8% of people ever reach their New Year's resolutions. And less than half of people are still trying past the end of January. But not you - no, you know that the reasons for becoming a CPA far outweigh the costs and you are going to stick to your goals like gum in your 5 year-old kid's hair. That's why we are offering this small little reminder of ways that you can keep your resolutions - we want you to hit those books, stick to your schedule, and reach your dream career.

• Write it down. Even if you didn't write it down and track your progress from the 1st of the year, writing down your goals will give you small milestones to aim for, a reminder in your bathroom mirror, and solidify your renewed vigor at conquering the exam.
  

• Tell your plan to the people closest to you. Then, make sure that they keep you accoutable and on track.

• Don't forget to reward yourself. Get in 3 hours of studying every day and 2 practice exams this week? Treat yourself to a little something-something. This will help keep you motivated and rev-up your engines for the next small goal.

• Expect setbacks. Just because you didn't meet a small goal does not mean to need to beat yourself up and give-in. Life happens, and sometimes there is nothing you can do to change circumstances. Just wake up the next day and go at it full-force again. There's no reason to let one bad day or week keep you from fulfilling your accomplishment

• Start a New Year's Resolution today. Who says you have to make an irrevocable decision on the 31st of the year? Make the decision today to start studying more, getting help when you need it, practicing your simulations, and buckling down.

Live Tomorrow - Ask Roger all of your CPA Exam Questions!

We here at Roger CPA Review are crazy excited to a announce our first scheduled CPA Exam Chat on Tuesday January 19th from 11am to 12pm PST. (That's tomorrow!) Roger will be available on the CPA Exam Club site to take questions, discuss study methods, and talk over anything and everything Exam related.

In the words of CPA Exam Club:

Roger Philipp, CPA of Roger CPA Review will be taking your questions!!!

Are you struggling with a particular exam question, topic or section? Curious about the 2011 exam changes? Trying to figure out how to choose exam materials? Our exam chat is a great place to have your questions answered.


Don't forget! You need to be a member of CPA Exam Club to participate in Tuesday's chat, so if you haven't already joined, please do so now so you are all set for Tuesday's chat. (Join Here)

The Chat link will be available via the CPA Exam Club home page about 15-20 minutes prior to chat time. Once chat is available, you will see a long bar at the bottom of the home page with a button to connect to Chat.

Find out more information here.

So join in on the fun and get your questions and concerns answered- see you all tomorrow!

2010 Window One Scoring Info

We know that it is only the second full week of the first testing window of 2010, but we also know that people are already curious about score releases and when they can expect their results.

Last week, CPA Zone published a great post on expected Window 1, Wave 1 & 2 scoring predictions and estimates. In fact, we thought that it was so good that we would share their predictions and add some key take-away points.

• The Wave 1 cutoff is predicted to be February 5th. This means that if you want your scores to be included in Wave 1, you need to sit for the exam on or before February 5th.

• The AICPA releases scores to NASBA, or directly to the state if it is a non-NASBA jurisdiction. Individual states release their scores via Board of Accountancy websites, email, or snail mail. NASBA posts scores 24-48 hours after receiving them from the AICPA, generally around 9pm EST.

• Wave 1 scores are generally released around the 15th of the second month of the window and conclude around the 22nd or 23rd.

• Wave 2 scores are generally released 2 weeks after the end of the window, in the third blackout month, and conclude around the 22nd or 23rd.

• The order of score releases is historically BEC, REG, AUD, FAR or BEC, AUD, REG, FAR

CPA Zone's scoring predictions, which we here at Roger agree with, are as follows:

WAVE 1 Jan/Feb 2010 Window
Score Release Start - Week of February 15th
Score Release Finish - Week of February 22nd

WAVE 2 Jan/Feb 2010 Window
Score Release Start - Week of March 15th
Score Release Finish - Week of March 22nd

As the only CPA Review provider with the RealResults® system, and the highest passing rates in the industry (86%!), we know that our students are able to worry a bit less when it comes to the score waiting game.

Want more? Learn more about passing the CPA Exam.

*image credit: pbo31

CPA Exam Changes in 2011

The CPA Exam will undergo some dramatic changes and updates as it makes the transition to CBTe, or "computer based testing evolved," beginning on January 1st, 2011. Start your preparation now with Roger CPA Review! Join CPA Exam Advisor Mitra Wilson as she describes the major new features and changes you can expect to see on the CPA Exam. Find out what you'll need to be ready for when you sit for the CPA Exam. Don't be caught by surprise!