R-00

CPA EXAM REVIEW

$ II i

I

"BECKERPROFESSIONAL EDUCATION

BECKER PROFESSIONAL EDUCATION COURSE DEVELOPMENT TEAM

Timothy F. Gearty, CPA, MBA, JD Editor in Chief, Financial/Regulation (Tax) National Editor

Angeline S. Brown, CPA, MAC Accounting Curriculum Manager, Audit/Financial/BEC National Editor

Tom Cox, CPA, CMA, CHFP , Financial (GASB & NFP) National Editor

Steve Levin, JD ................•..................................... Regulation (Law) National Editor

John B. Pillatsch, MAS, CPA..... , ..•..•..•..•..•..•..•.......... Director, Course Development Operations

Pete Console ................•..•..•..•..•..•..•..•..•..•.................Director, Quality Assurance

Stephen Bergens Manager, Curriculum Quality Assurance

Anson Miyashiro ..•.•..•..•..•..•..•..•..•..•..•..•..•..••............... Course Production Manager

Al Glodan .............•..•..•..•..•..•..•..•..•..•..•................ Bookstore Purchasing Manager

Michelle McCubbins Course Production Project Manager

Joe Antonio ...........•..•..•..•..•..•..•..•..•..•..•..•..••..... Course Production Project Manager

Jeff Rosier.......•..•..•..•..•..•..•..•..•..•..•..•..•..••........ Course Production Project Manager

Brian Cave .............•..•.....•..•..•..•..•..•..•..•..•.... Software Development Project Manager

Byron Gave......•..•..•..•..•...•..•..•..•..•..•..•..•..•.........Quality Assurance Project Manager

Tim Munson Course Production Editor

Linda Finestone ....•..•..•..•...•..•..•..•..•..•..•..•..•..•..•..•..•..... Course Production Editor

CONTRIBUTING EDITORS

Eric J. Brunner, PhD

Chris Cocozza, CPA, JD, LLM

Robert A. DeFilippis, CPA, MBA

Jennifer B. Deutsch, CPA, MS

Mike Farrell, JD

Dennis J. Green, CPA, MBA

John S. Grayson, JD, CPA

Liliana Hickman-Riggs, CPA, CITP, CMA, CIA, CFE, MS

Donald A. Kaniecki, CPA, MBA

Cindy Lawrence, CPA, MBA

Seth Levine, CPA, MPrA, MBA, ABD

Edward McTague, CPA, MBA

Michael Meriwether, CPA, MBA

Peter Olinto, JD, CPA

Mike Potenza, JD

Ray Rigoli, CPA, MBA

Joshua M. Rosenberg, CPA, CFA, MBA

Jonathan R. Rubin, CPA, MBA

Christopher Severson, MPA

Jeffrey Sherman, JD, CPA (inactive)

Roberta Smith, CPA

Karen Tarbet, CPA, JD

Lisa M. Thayer, CPA

Permissions

Material from Uniform CPA Examination Selected Questions and Unofficial Answers, 1989, 1990, 1991, 1992, 1993,

1994, 1995,1996,1997,1998,1999,2000,2001,2002,2003,2004,2005,2006,2007,2008,2009,2010,and2011copyright © by American Institute of Certified Public Accountants, Inc., is reprinted and/or adapted with permission.

Any knowing solicitation or disclosure of any questions or answers included on any CPA Examination is prohibited.

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Printed in the United States of America.

No part of this work may be reproduced, translated, distributed, published or transmitted without the prior writtenpermission of the copyright owner. Request for permission or further information should be addressed to the

Permissions Department, DeVry/Becker Educational Development Corp.

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Becker Professional Education I CPA EXdIll ~t"v,t:'w

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Regulation

REGULATION

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IMPORTANT NOTES TO STUDENTS REGARDING "THE BECKER PROMISE"

• You must stamp this sheet at the end of each class attended. This is the only acceptable record of your classroom attendance.

An overall percentage correct of 90% or higher is required of the homework to qualify for The Becker Promise.

Please fax documentation to 866-398-7375 no later than 30 days following the completion of each section.

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Regulation

vi

NOTES

Becker Professional Education I CPA ElCam Re\lJew

(J 2011 DeVlv/BeC~er Educational Oevelopment COlp. All rlgllU reserved.

Becker Professional Education I CPA Exam R~vlew

REGULATION

table af cantents

Regulation

Program attendance record v

Introduction Intra·1

REGULATION 1

1. Individual taxation: Filing status Rl·7

2. Individual taxation: Exemptions RI-I0

3. Individual taxation: Gross income Rl-15

4. Individual taxation: Capital gains and losses Rl-48

5. Task-based simulations Rl-71

6. Class questions Rl-75

REGULATION 2

1. Adjustments and itemized deductions R2-3

2. Tax calculations and credits R2-33

3. Individual taxation: Other taxes R2-49

4. Individual taxation: Other items R2-S5

5. Class questions .. R2-57

REGULATION 3

1. Ccorporations, depreciation, and MACRS R3-3

2. Small business corporations (S corporations) R3-52

3. Exempt organizations R3·60

4. Class questions R3-n

REGULATION 4

1. Partnership taxation R4-3

2. Estate, trust, and gift taxation R4-22

3. Ethics and professional responsibilities in tax services R4-43

4. Federal tax procedures and legislative process R4-68

5. Class questions R4-93

REGULATION 5

1. Contracts Rs-3

2, Sales" "" '" '" '" "" "" '" '" '" """"""""'" '" '" """""""""""""""" '" '" '" """ '" '" """ "" '" """""""" "" '" '" '" """'" "" '" '" "" "" '" '5-31

3. Class questions Rs-47

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Regulation Becker Professional Education I CPA Exam Review

REGULATION 6

1. Commercial paper R6-3

2. Secured transactions R6-27

3. Suretyship & creditors l rights R6-42

4. Task-based simulations R6-53

S. Class questions R6-S7

REGULATION 7

1. Agency . R7-3

2. Bankruptcy R7-16

3. Securities regulation . R7-39

4. CPA legal liability R7-53

5. Class questions R7-59

REGULATION g

i. Sale proprietorship and joint venture Rs-3

2. General partnership Rs-4

3. Limited liability partnership....................................................................................................................................... . RS-1S

4. Limited partnership . Rs-16

5. Limited liability company RS-19

6. Corporation Rs-22

7. Employer-employee law Rs-41

8. Money laundering RB-S1

9. Antitrust law RB-S8

10. Dodd-Frank Act of 2010 RS-66

11. Copyrights and patents '8-70

12. Documents of title '8-74

13. Class questions Rs-79

Class question explanations CQ·1

GJOSSQry Glossary·1

Index Index-1

viii I:l 2011 DeVrv/BllcKc!r Edu~tionll Dllvclollmllnl Corp. All rlshts rll~efWd.

2. Becker's CPA Exam Review-Course introduction , Intro-7

Surviving the examination , ,., ..".".".".".".".".""" ,., .. , , Intro-lS

Study planner , , Intro~9

Intro-7

Intro-8

Intro-3

Intro-7

Introduction .

Lecture series , , .

CoursE' software , , .

COURSE INTRODUCTION

Textbooks , ,.. ,. , ,.. , " , " .. ,.. ,.. ,.. , ,.. ,.. ,, .

Study roadmap " , , , , , " , , , , lntro-9

Managing your stress before the examination ,.".", , , , ,.. ,.. , , , , Intro-l7

Flashcards and mobile flashcard applications , , , , , Intra-lO

Support center Intro-l2

The Uniform CPA Exam-Overview Intro-l3

Passing the CPA Exam , ,.." , Intro-lS

1. Content specification outline .

Regulation

Intro-2

NOTES

Becker Professional Education I CPA Exam Revlf'w

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Becker Professional Education I CPA E"I(dtll R..,vh·w

REGULATION CONTENT SPECIFICATION OUTLINE

REGULATION

3 hours

Regulation

I 35-40 minutes l I 60-70 minutes ~

• 60 Points •Testlet #1 Testlet #2 Testlet #3

24 24 24

MC MC MC

Questions Questions Questions

I 35-40 minutes ~ I 35-40 mmutes ~

+-- 40 points ~

Testlet #4

6Task-basedsimulations

l. Ethics, professional, and legal responsibilities 15-19%

A. Ethics and responslb1litles in tax practice

1. Treasury Department Circular 230

2. AICPA Statements on Standards for Tax Services

3. Internal Revenue Code of 1986, as amended, andregulations related to tax return preparers

B. licensing and disciplinary systems

1. Role of state boards of accountancy

2. Requirements of regulatory agencies

C. legal duties and responsibilities

1. Common law duties and lIablllty to clients and third parties

2. Federal statutory liability

3. Privileged communications, confidentiality, and privacy acts

II. Business law 17-21%

A. Agency

1. Formation and termination

2. Authority of agents and principals

3. Duties and liabilities of agents and principals

B. Contracts

l. Formation

2. Performance

3. Third-party assignments

4. Discharge, breach, and remedies

c. Uniform Commercial Code

l. Sales contracts

2. Negotiable instruments

3. Secured transactions

4. Documents of title and title transfer

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D. Debtor-creditor relationships

1. Rights, duties, and liabilities of" debtors, creditors,and guarantors

2. Bankruptcy and insolvency

E. Government regulation of business

1. Federal securities regulation

2. Other federal laws and regulations (antitrust, copyright,patents, money laundering, labor, employment, and ERISA)

F. Business structures (selection of a business entity)

1. Advantages, disadvantages, implications, and constraints

2. Formation, operation, and termination

3. Financial structure, capitalization, profit and loss allocation,

and distributions

4. Rights, duties, legal obligations, and authority of ownersand management

Intro-3

Regulation Becker Professional Education I CPA Exam R~vfew

III. Federal tax procedures. accounting and planning 11-15%

A. Federal tax legislative process

B. Federal tax procedures

1. Due dates and related extensions of time

2. Internal Revenue Service (IRS) audit and appeals process

3. Judicial process

4. Required disclosure of tax retum positions

S. Substantiation requirements

6. Penalties

7. Statute of limitations

C. Accounting periods

D. Accounting methods

1. Recognition of revenues and expenses under cash, accrual.or other permitted methods

2. Inventory valuation methods, including uniformcapitalization rules

3. Accounting for long-term contracts

4. Installment sales

E. Tax return elections. Including federal status elections.alternative treatment elections. or other types of electionsapplicable to an Individual or entitY's tax return

F. Tax planning

1. Alternative treatments

2. Projections of tax consequences

3. Implications of different business entities

4. Impact of proposed tax audit adjustments

S. Impact of estimated tax payment rules on ptannlng

6. Role of taxes In decision making

G. Impact of multljurlsdictional lax issues on rederaltaxatlon(Including consideration of local, state. and multinational taxissues)

H. Tax research and communication

1. Authoritative hierarchy

2. Communications with or on behalf of clients

IV. Federal taxation of property transactions 12-16%

A. Types of assets

B. Basis and holding period of assets

c. Cost recovery (depreciation, depletion, and amortization)

D. Taxable and nontaxable sales and exchanges

E. Amount and character of gains and losses, and netting process

F. Related party transactions

G. Estate and gift taxation

1. Transfers subject to the gift tax

2. Annual exclusion and gift tax deductions

3. Determination of taxable estate

4. Marital deduction

S. Unified credit

V. Federal taxation of indIVIduals 13-19%

A. Gross Income

1. Inclusions and exclusions

2. Characterization of Income

B. Reporting of items from pass-through entities

C. Adjustments and deductions to arrive at taxable income

D. Passive activity losses

Intr0-4

E. loss limitations

F. Taxation of retirement plan benefits

G. Filing status and exemptions

H. Tax computations and credits

I. Alternative minimum tax

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Becker Professional Education I CPA EKam Review Regulation

VI. Federal taxation of entities 18-24%

A. Similarities and distinctions in tax treatment amongbusiness entities

1. Formation

2. Operation

3. Distributions

4. liquidation

B. Differences between tax and financial accounting

1. Reconciliation of book Income to taxable income

2. Disclosures under schedule M·3

c. Ccorporations

1. Determination of taxable income/loss

2. Tax computations and credlts,lncludlng alternativeminimum tax

3. Net operating losses

4. Entity/owner transactions, including contributions anddistributions

S. Earnings and profits

6, Consolidated returns

D. Scorporations

1. Eligibility and election

2. Determination of ordinary income/loss and separately stateditems

3. Basis of shareholder's interest

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4, Entity/owner transactions, Including contributions anddistributions

5, Built-in gains tax

E. Partnerships

1. Determination of ordinary income/loss and separatelystated items

2, Basis of partner's/member's interest and basis of assetscontributed to the partnership

3, Partnership and partner elections

4, Transactions between a partner and the partnership

S, Treatment of partnership liabilities

6. Distribution of partnership assets

7. Ownership changes and I1quidation and termination ofpartnership

F. Trusts and estates

1. Types of trusts

2. Income and deductions

3. Determination of beneficiary's share of taxable Income

G, Tax-exempt organizations

1. Types of organizations

2, Obtaining and maintaining tax-exempt status

3, Unrelated business income

Intro-S

Regulation

Jntro·6

NOTES

Becker Professional Education I CPA ElC<1m Revlf,'w

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Becker Professional Education I CPA Exam Revlpw Regulation

BECKER'S CPA EXAM REVIEW-COURSE INTRODUCTION

INTRODUCTION

Becker Professional Education's CPA Exam Review products were developed with you, the candidate, in

mind. To that end we have developed a series of products designed to tap all of your learning and retention

capabilities. Our course is first and foremost a time-management system. The Becker lecture series,

comprehensive texts, and course software are designed to be fully integrated but each can also stand alone.

The best resuits are achieved when all the components are used collectiveiy.

Passing the CPA Exam is difficult, but the professional rewards a CPA enjoys make this a challenge all

acecunting professionals should meet. You will pass the CPA Examination if you prepare properly. Keep this in

mind as you work with our course materials. We created our CPA Exam Review after evaluating the needs of

CPA candidates and analyzing the CPA Exam over the years. Those efforts have enabled us to produce a CPA

Exam Review unparalleled in today's market. Our ecurse materials comprehensively present topics you must

know to pass the examination, teaching you the most effective tactics for learning the material.

LECTURE SERIES

Becker gives you the option of attending live classes or viewing the lectures on your own using the Becker

online course platform or the desktop course software. No matter what format you choose, you will see and

hear the most dynamic CPA Exam Review lecturers in the country. Our lecturers are exam-oriented and spend

ecuntless hours analyzing past exams and developing strategies to help you pass-this time.

Each section of the Becker course includes a "Virtual Lecture" that is to be viewed at home by all students,

including Live Classroom students. In the Regulation ecurse, the Virtual Lecture is the R8 lecture. These

lectures were added to improve the overall pace of the Becker ecurse, to reduce the amount of work that you

must complete with each lecture, and to allow us to better ecver the topics currently tested on the CPA Exam.

You must view the Virtual Lectures in order to fully prepare for the CPA Exam.

TEXTBOOKS

Our textbooks, written by our faculty and subject matter experts, are specifically designed to prepare you for the

CPA Exam effectively and efficiently. Written in outline form, they follow the same sequence as the lectures

providing reduced note-taking and allowing students to ecncentrate their attention on the presentation.

02011 DeVry/Becker Educ.atlomll Development Corp. All rlll"U resel'\led. Intro·7

Regulation

Textbook Icons

Becker Professional Education I CPA E:.xilm Rflvirow

Throughout the Becker materials you will find icons that have been designed to assist with your preparation

for the CPA Examination. These icons are located in the margins of your textbook for easy identification of

important information.

Pass Keys

Memorize Notations

Keyword Search

FASB AccountingStandards Codification

Notes, Exceptions, etc.

IFRS-specific Content

IntemationalComparison

Throughout the course materials you will find Pass Keys that havebeen prepared to assist in your understanding of major concepts.Pass Keys will be identified with this icon in the margins.

Important items within the materials that should be memorized willbe identified with this icon in the margins.

As part of the task-based simulation portion of the exam, candidatesare required to search professional literature to find the solution toa given question. A keyword search of the relevant authoritativeliterature is a candidate's most time-effective tool. Potentiai keywordsto search with will be identified with this icon in the margins.

These numbers represent the location of this topic in the FASBAccounting Standards Codification. These will be identified with thisicon in the margins.

When important notes, exceptions, etc., are included within thematerials, it will be identified with this icon in the margins.

When IFRS-specific information is included within the materials,it will be identified with this icon in the margins.

When international comparison information is included within themalerials, it will be identified with this icon in the margins.

COURSE SOFTWARE

An integral part of Becker's CPA Exam Review program is the use of the course software, which provides

access to the nearly 100 hours of mullimedia lecture content, thousands of multiple-choice questions, and

hundreds of simulation tasks, including questions and tasks from prior exams. The multiple-choice and

simulation homework is necessary to reinforce the concepts introduced In the materials, and is organized on

a lecture-by-Iecture basis. The software also provides two comprehensive final exams for each part. The

Business (BEC) section of the CPA Exam includes simulations thai test the candidate's writing skills. We

encourage you to watch the Written Communication Lecture as it will help you gain an understanding of what

the examiners are looking for in a well-writlen response.

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Becker Professional Education I CPA E)l<1nl Rt'VIPW Regulation

Two other important features of the course software are the Study Planner and the Study Roadmap, both of

which are described below,

STUDY PLANNER

It takes time to study for the CPA Exam, However, all candidates face the challenge of fitting their CPA Exam studies

into their busy lives, The course software provides you with a Study Planner that will help you establish a study

schedule and manage your study time efficiently and effectively. You have the option of allowing the Study Planner

to prepare a study schedule for you, or you can create your own schedule, The Study Planner will allow you to see

what you need to accomplish each day and each week as you prepare to take the CPA Exam,

STUDY ROADMAP

With so many elements available to help you study, sometimes it is difficult to know where to begin and how

much time should be spent on each element of the Becker Course. Within the course software, each lecture

provides you with a Study Roadmap based on Becker's Learn-Practice-Review methodology, The Study

Roadmap allows you to see, step-by-step, what you need to do to thoroughly study the information thai will

be tested on the exam, It also gives you an estimate of the time it will take to complete each step, The Study

Roadmap includes the following elements:

LEARN-View the lecture (Estimated time: 4 hours)

PRACTICE-Complete the multiple-choice homework and the practice simulations (Estimated lime: 6-8 hours)

REVIEW-Review flashcards and take a progress test (Estimated time: 2-3 hours)

Lecture Study Roadmap Example

STUDY CENTER F2: Matching (Revenue & Expe... .....Study Roadmap

TollIlstudy tlmGl13· IS OOIlf"S

_.(5-6'--)_........

3. Review

Do~'I"t....

U -2haurs}

_.-.(I hour)

....

2_ Practice

---.

1. Leam

CI 2011 DeV'ty/8etket flllJCiltlonal Development Corp. All rlghn feselWd. lntro·9

Regulation Becker Professional Education I CPA Exam Review

Becker also provides you with a Study Roadmap for your review before you take each section of the exam.

You should give yourself at least one week to do a final review before taking the exam. Your final review should

Include reworking the multiple-choice questions and simulations, taking the two final exams, and completing as

many comprehensive Progress Tests as possible.

Review Before Exam Study Roadmap Example

~ REVIEW BEFORE EXAM: Financial

1. Rework ~ 2. Take Final Exams

~bcIdll'lNle-n.

L ~rlalb.ml

I mal Loam 2 ::::oJ

(' 3. Comprehenslver.\.!/ Progress Tests

THoo n '"""'II'" "',:01••••_.-_.. _1l'IM11IIla'

'"'or_Tau

FLASHCARDS AND MOBILE FLASHCARD APPLICATIONS

Flashcards are an important tool to assist in your preparation for the exam. Although we believe that preparing

your own flashcards is a valuable learning tool, we recognize that time is a precious commodity when preparing

for the exam. For that reason, we also offer enrolled students the opportunity to purchase preprinted flashcards

and mobile flashcard applications. Flashcards will help you commit to memory the most important principles

and rules tested in each section of the exam. The flashcards are indexed by class session to allow you to

focus your preparation in your weakest areas.

Preprinted Flashcards Example:

Front Side

Conccptull Frameworlu

Name the single source of authoritativenongovernmental U.S. GAAP,

O>tll,_... r .. _ .._

Intro-IO

FAR 1-1

Bock Side

The FASS "ACCOunting StandardS Codillcatlofl· (ASC).

FAR 1-1

0""' .._ ... , ........,_

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Becker Professional Education I C.PA ham Rt!vlew

Mobile Flashcards Application Example:

Front Side

Audited Financial Stat&ments •The Basics

What are the three standards offieldwork?

I'd like a piece of PIEI

QuestIon 4 of 41:I O'J [}O....1 B<o'~D' f~M"~h • ..oJ n.'~~'l mo "I (': ""

Bock Side

10:05 AM

H~' AUDIT 1 0 I)

Auditing & Attestation 1

- 'UOfT'" '- I_ U>I_

The audilOl' must adequately PLANthe work and must properly superviseany assistants,

The auditor must oblain a surncientunderstandIng of the entity and Its

environment. including Its INTERNALCONTROL, 10 assess the risk ofmalerial misstatement of the nnanclalstatements whelher due to error orfraud, and 10 design Ihe nature,timing, and elCtent of further auditprocedures,

Answer 4 or 41!'I rooo l"'V'Y~lec"" E~I_I 00••l.>f>rnGn1 r.:.:'!'

Regulation

The fiashcards and mobile fiashcard applications for the most popular mobile platforms can be purchased by

calling our National Student Service Center at 1-800-868-3900 or online by simply logging on to

www.beckercom/cpa and select "Flashcards" from the Courses & Products drop-down menu.

If you want to supplement the preprinted fiashcards, several blank cards are provided. If you want to prepare

your own flashcards, we recommend the following:

• Prepare flashcards as you review your lecture notes prior to working the multiple-choice questions. You

can identify those flashcards you would like to create by making a mark, such as "FC," in the margin of

your outline while viewing the lecture.

• Select major concepts from your class materials (outlines). Do not prepare fiashcards for everything

in the outlines (the outlines are already In a summarized format). Only make a fiashcard for the major

concepts, general rules and exceptions, mnemonics, formulas, and important lists. Items to consider:

../ Mnemonics

../ Formulas

../ "Heavy on exam" notations

V "Memorizetl notations

../ Other major concepts (noted while reading the explanations to the multiple-choice questions)

../ General rules and exceptions

• Keep your fiashcards as simple as possible, but do not sacrifice correctness for brevity.

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Regulation Becker Professional Education I CPA Ex<im RevIew

• Use 3" x 5" or 5" x 7" cards (whichever size is easiest for you to carry around). Write the question, the

general rule, or the title of the list you are trying to memorize on the front, and write the answer, the

exceptions, or the list, as applicable, on the back.

Example:

A-I

Front Side

A-I Code wirh"'E--- class number

Bock Side

• After each class, review all of your flashcards for all of the previous classes. When you believe that you

have a concept memorized, place those cards in a separate pile. Do not stop reviewing those cards, but

it is not necessary to review them as often. The more frequently you can review all your cards, the better

your retention will be.

SUPPORT CENTER

The Becker Support Center is your source for course updates, supplemental materials, and unlimited academic

support. Just click on the Support Center tab at:

http://www.becker.comlaccountinglcpaexamreviewl.

You can also access customer service and technical support from the Support Center or by calling

1-877-CPA-EXAM (Outside the U.S. + 1-630-472-2213).

Online course students needing technical support with this platform should call 1-866-866-7053 or visit

https:llsupportcenter.embanet.comlbecker.

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Becker Professional Education I CPA Exam RE"vlew

THE UNIFORM CPA EXAM-OVERVIEW

Exam Sections

The CPA Examination consists of four sections:

FINANCIAL ACCOUNTING & REPORTING

Regulation

The Financial section consists of a four-hour exam covering all financial accounting and reporting,

and governmental and not-for-profit accounting, including International Financial Reporting

Standards (I FRS).

AUDITING & ATTESTATION

The Auditing section consists of a four-hour exam. This section covers all topics related to auditing,

including audit reports and procedures, generally accepted auditing standards, attestation and other

engagements, and governmental auditing.

REGULATION

The Regulation section consists of a three-hour exam, combining topics from business law and

federal taxation.

BUSINESS ENVIRONMENT & CONCEPTS

The Business section consists of a three-hour exam, covering general business topics such aseconomics, financial management, information technology, managerial accounting, and process andproject management.

Question Formats

The chart below illustrates the question fonmat breakdown by exam section.

ITask-based Simulations or Wntten

Multiple-choice Questions Communication Tasks

Seaion Percentage Number Percentage Number

Financial 60% 90 40% 7

Auditing 60% 90 40% 7

Regulation 60% 72 40% 6

Business 85% 72 15% 3

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Regulation Becker Professional Education I CPA Exam Rl'vlf'w

Each exam will contain tesllets. A tesllet is either a series of multiple-choice questions (either 24 or 30

depending on the section) or a set of task-based simulations. For example, the Regulation examination will

contain four lesllets. The first three tesllets will be multiple-choice questions and the last will contain six task

based simulallon problems, including one research question. Each tesllet must be finished and submitted

before continuing to the nexttesllet. Candidates cannot go back to view a previously completed testlet or go

forward to view a subsequent tesllet before closing and submitting the earlier tesllet. Our final exam contains

these types of restrictions so you can familiarize yourself with the functionality of the CPA Exam.

Exam Schedule

The computer-based CPA Exam is offered during the first two months of each calendar quarler. Oncedetermined to be eligible to sit, candidates can schedule an exam date direclly with Prometric.

Eligibility and Application Requirements

Each state sets its own rules of eligibility for the examination, so the requirements vary from state to state.

Please visit www.becker.com/state as soon as possible to determine your eligibility to sit for the exam.

Application Deadlines

With the computer-based exam format, set application deadlines generally do not exist. To ensure that you

have a thorough understanding of your state's requirements, you should apply as early as possible.

Grading System

You must pass all four parls of the examination to earn certification as a CPA. You must score 75 or better on a

part to receive a passing grade.

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Becker Professional Education I erA EW"lm Rf'vlf'w

PASSING THE CPA EXAM

Strategy and Tactics for Taking the Examination

To ensure that you initially eam a passing grade, you should follow these tips.

Tips for Multiple-choice Questions

TIP 1 Control the amount of time you spend on each question.

Regulation

The exam time limits mentioned above are overall time limits. The recommended time to completethe task-based simulation tesllet is 60 to 75 minutes. As such, you'll be forced to closely controlthe amount of time you spend on multiple-choice questions. For Financial and Auditing, you shouldspend approximately 1'1. to 2 minutes on each multiple-choice question. For Regulation andBusiness, you should spend approximately 1 to 1'1. minutes per question.

TIP 2 Become familiar with the format.

The exam does not contain the typical muitiple-choice format such as lettered answers (a, b, c, and d).Instead, candidates are required to click on the radial dials or the text portion of the answer they arechoosing as correct. You will see this functionality in our final exams.

TIP 3 Read all four choices before choosing one as your answer.

Given that you're working under time constraints, you may be tempted to choose as your answerfor any given question the first choice that seems right. This can be a coslly mistake because theexaminers may include two or more "good" answers among the choices, one of which is the bestanswer. You'll get no credit for choosing the wrong "good" answer.

TIP 4 Answer every multiple-choice question.

The examiners don't penalize you for guessing; they don't subtract wrong answers from rightanswers. Therefore, guess when you must, and realize that you always have at least a 25 percentchance of getting the right answer. In fact, on some questions you may have a 50 percent chance ofguessing the right answer because you may immediately recognize that two of the four choices arewrong.

If you're uncertain about an answer, you can mark that question for later review. You will see thismarking functionality in our final exams. Prior to exiting the tesllet, you should make sure you haveanswered all questions.

When you're answering multiple-choice problems that require mathematical calculations and you'reunable to arrive at one of the four given numerical answers, you should perform the followingprocedure before you record a guess as an answer. First, check the mathematical accuracy of yourcalculations; that alone may lead you to the correct answer. If that doesn't produce a correct answer,check for an error in your logic by rereading the question. If that doesn't clear the ambiguity, chooseyour guess to answer the question, and mark it for review at the end of the current tesllet if timepermits. Remember though that once you submit a tesllet, you cannot go back to review it.

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Regulation

Tactics for Simulations

TIP 1 Work all homework simulations.

Becker Professional Education I CPA Exam Rf.'vl~w

We have developed extensive task-based simulations for you to work as homework. You shouldfamiliarize yourself with the types of questions and functionalities covered by the tasks. Thisfamiliarity will save you time on the actual exam because you will understand how to navigatebetween tasks and use the various tools that are provided.

TIp 2 Follow recommended progression through tasks.

It is important to have a basic approach when beginning a testle!. We recommend the following:

,/ Review each task's instructions.

,/ Allocate your time among the tasks. Remember the AICPA's approximate time frame for all

task-based simulations to be worked. Be sure, however, to take into account any additional

time you saved while completing earlier testlets and the difficulty of the particular simulation

you are working.

,/ Be sure that you have answered all requirements for each task.

TIP 3 Use the keyword search function when completing research tasks.

The Research task requires the candidate to answer a question using the appropriate authoritative

literature. It should be noted that the most time efficient way to search the authoritative literature

available on the exam is through the use of a keyword search.

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Becker Professional Education I CPA Exam Rflvlew

MANAGING YOUR STRESS BEFORE THE EXAMINATION

Expect to feel tense and uncertain during the week before the examination. You can manage stress by

following several tips.

TIP 1 Remember, every candidate taking the exam likely feels as tense as you do.

Regulation

Take some comfort from that shared misery. Realize also that the examiners indirectly recognize thatstress by curving scores on the examination and by re-grading failed parts.

TIP 2 Use those activities you usually employ to reduce stress.

Get as much rest as you can, exercise regularly. and eat balanced nutritional meals. The evidence isoverwhelming that adequate rest, exercise, and nutrition minimize the hanmful and disruptive physical

and psychological effects of tension.

TIP 3 Do not work until you drop.

You'll impair your health and threaten your performance on the examination. Treat yourself to timeaway from concentrated study. Focus on the fact that the time to study and leam new material isbehind you.

TIP 4 You may want to try a technique called "imaging."

Some people report that they improve their perfonmance on difficult or stressful tasks by visualizingthat they've already succeeded at the task. Imagine that you're taking the examination and handlingits demands well. Or. imagine you've received your passing grade. This may boost your confidence.

TIP 5 Remember, the examiners cannot test on every conceivable subject.

The examiners must limit the amount of detail they demand and the scope of topics on which theycan focus during the time allowed for the examination.

TIP 6 Remember, if a question pops up with which you are unfamiliar, don't panic.

The odds are that it will be a surprise to most exam takers. Simply gather your wits about you andprepare the best answer you can. Do not omit the question simply because you are unfamiliar withthe topic. Most likely, the examiners are looking for you to exercise professional judgment in tacklingthe topic.

TIP 7 Remember, if you have followed your study plan, you are well prepared.

You will be able to answer most of the questions on the examination easily, and you'll know howto wrestle with the harder problems in ways that will earn you a passing grade. Even if you'veaccomplished only most or some of your study goals, take comfort in the knowledge that you're betterprepared than many other candidates.

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Regulation

SURVIVING THE EXAMINATION

Becker Professional Education I CPA Exam RevIew

Make sure that you've arranged your transportation so you arrive with 30 minutes to spare before your set

appoimmenllime, This margin shouid enable you to handle any unexpected travel delays,

Second, wear comfortable clothing. The "layered look" should serve you best. The room in which you take the

examination may be perfectly comfortable, but it may be over- or under-heated for the season, and you'll want

to be able to adjust to prevailing conditions,

Additional test-center administration procedures are available on either the AICPA exam website

(www.cpa-exam.org) or at the Prometric test center website (www,2test.com).

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Becker Professional Education I CPA Exam RPVlfoW

PREPARE TO SUCCEED...

Regulation

Congratulations on your decision to join the most trusted and recommended CPA Exam Review course in the

industry-Becker Professional Education!

Upon the successful completion of our course and passing the CPA Exam, we invite you to consider joining

the esteemed faculty of Becker Professional Education. We employ a strong cadre of carefully selected

professionals with advanced academic degrees and years of practical experience. Our faculty help students

relate to the business world, make tangible connections between theory and practice, and bring immediate

reievance to you.

Becker's culture of passion among its faculty and their commitment to keeping professionally up to date are the

key factors driving all aspects of our mission.

As a Becker faculty member, you will help others achieve their career goals and personal potential while

earning a supplemental income. You wilt get the satisfaction of making a positive impact on the quality of the

CPA profession. You wiil also gel a unique opportunity to grow personally and professionally:

./' Teach part time without interrupting your full-time career.

./' Experience the satisfaction of making a difference.

./' Expand your own expertise.

./' Enhance your communication and leadership skills.

./' Network with other professionals in your field.

If you are an experienced professional with a CPA and/or an advanced degree, knowledge of the CPA

profession with strong communication skills and a desire to help others succeed, you could become a faculty

member at Becker Professional Education. Specialty areas of need include financial accounting and reporting,

governmental and not-for-profit accounting, taxation, business law, auditing and attestation, economics, cost

and managerial accounting.

In addition to competitive compensation, Becker Professional Education faculty may be eligible for CPE

credit (decided by each juriSdiction). Please send a resume or CV to [email protected] if you are

interested in preparing future CPAs. If you have questions, you can also contact a Becker faculty recruiter

at 630-706-3406.

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Regulation Becker Professional Education I CPA Exam RevIew

INSTRUCTOR EVALUATION FORM

Becker Professional Education is committed to providing high-quality instruction to our students. If you are taking Ihis course in alive classroom, you will periodically receive e-malls throughout the course. These e-mails will include a link to our online evaluation.Please take a few minutes to complete this evaluation. Your input is very important to us. You will continue to receive remindera-mails until you complete the evaluation form for every instructor teaching that section or until the evaluation period has ended.

To ensure you receive the e-mail Invitation. be sure to add [email protected] to your address book or safe senderslist. For your convenience, please find the instructions for the most commonly used a-mail services and programs at:hUp·mmages.ed4 neVimageslhtdocsJaddressbook.

If you do not receive the reminder e-mails, you can access the evaluations at www.beckereval.com throughout the section you arecurrently attending and for approximately 10 days after the last lecture of that section. If you prefer, you can complete the evaluationbelow for each instructor in that section and scan and e-mail them to instructorevals@beckercom.

Please fist your class information:

Please list your ;nstructors'llames:

CityfLocation (e.g.! OenverlWestminster-DeVryl Section (FAR, AUD, REG, or BEC)

I would give this instnJctor lhe following grade:

This instructor displayed passion andenthusiasm while presenting the lectures.

This instructor demonstraled knowledgeof the sUbject matter by giving examples,working ques"ons during the lecture, andanswering questions while at the classes.

This Instructor molivated me 10 complele thehomework and to do what I could 10 ensurethat I was prepared for the exam,

ThIs instructor showed agenuine interest inpreparing me for the exam.

Did your instructor encourage you to fill outyour course evaluations?

I would recommend this Instructor to others.

Overall, I would give this instructor thefollowing grade:

How kmg was the class?

Describe at least one characteristic or aspectof your instructo(s teaching thai could beimproVed in order to provide students with abetter learning experience:(Use Ihe back of this page for additionalspace, if needed.)

Describe alleasl one of your instructor'steaching strengths that you found helpful orvaluable:(Use the next page for addi"onal space,if needed.)

Intro·20

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Regulation

Inlto.22

NOTES

Becker Professional Education I CPA Exam Hp\I''''w

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