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Give yourself a pat for attempting this quiz! Do remember to attempt the mock exams provided by CFA Institute to prepare for the kind of questions you might get for the exam!
Which of the following is least likely a defining quality of an asset?
Which of the following is the closest definition of solvency?
Which of the following costs should most likely be included in inventory costs for a manufacturing firm?
A carmaker, which reports under IFRS, recently completed production of a batch of cars.
The cost of manufacturing the batch of cars is $20 million. Due to a recent oversupply in the market, the firm estimates that the cars can only be sold for around $22 million. The cost to sell these cars is estimated to be $5 million.
What amount should this batch of cars be reported in the firm’s balance sheet?
A carmaker, which reports under US GAAP, recently completed production of a batch of cars.
The cost of manufacturing the batch of cars is $20 million. Due to a recent oversupply in the market, the firm estimates that the cars can only be sold for around $22 million. The cost to sell these cars is estimated to be $5 million. The cost to replace these cars is around $18 million.
What amount should this batch of cars be reported in the firm’s balance sheet?
A travel agency collects the full fee of $10,000 for a tour package from a customer, for a tour that will take place 6 months later. This $10,000 should be recorded in its balance sheet as:
On 1 Jan 2014, a company bought a machine at a cost of $100,000. At the point of purchase, the company determined that the machine shall be depreciated using the straight line method, with a depreciation expense of $10,000 per year.
On 1 Jan 2017, the company realises that the recoverable amount for the machine is $50,000. Under the cost model, how should the company report for this machine on its balance sheet and income statement for 1 Jan 2017?
A company spent $2 million on the research of a new glass making technique, which was eventually patented.
What should be the most appropriate treatment of this $2 million research cost?
ACQ Corp paid $20 million cash to fully acquire its key supplier SUB Corp.
At the point of acquisition, SUB’s net assets was $17 million. ACQ independently assessed the plant, property and equipment of SUB to be $1 million higher than reported by SUB.
How much goodwill, if any, should ACQ report on its balance sheet from this acquisition exercise?
1 year ago, a manufacturing company bought 100,000 shares of a key supplier at $5 per share. The shares were reported as available-for-sale. During the year, a cash dividend of $0.30 per share was distributed.
Today, the market price of the shares are trading at $4 per share. How should the company report these shares in its financial statements?
A company initially issued 1,000 common shares at $12 per share.
During the year, the company paid out $1 cash dividend per common share.
At the end of the year, the company issued 500 preferred shares at $15 per share, and bought back 200 common shares at $20 per share.
What is the contributed capital of the company at the end of the year?
The net assets of SUB is valued at $2 million.
ACQ Corp agrees to pay $1.6 million cash to acquire a controlling 80% stake in SUB Corp.
Which of the following best describes what is likely to happen to ACQ’s balance sheet if the deal goes through?
Which of the following will most likely not affect the statement of changes in stockholder’s equity?
An analyst scribbled the 3 liquidity ratios of a company in her notepad, but forgot to label them.
The 3 ratios are: 0.42, 0.65, 1.98
In this order, what are the 3 ratios most likely to be?
Why is the language of the Learning Outcome Statements (LOS) different from the curriculum?
The LOS are protected under the CFA Institute's copyright, and we don't have permission to duplicate them verbatim. Therefore, we've rephrased the LOS and included alphabetical labels (a, b, c, …) to simplify cross-referencing with the original LOS in the curriculum when needed.
Now available for all Level I topics! Try it now!
Enter a search term (e.g. ‘LIFO reserve’), or bookmark the glossary page!
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Are you a CFA Level I candidate, or someone who is exploring taking the CFA exam? Four years ago, I was in your shoes. I am a Computer Engineering graduate and have been working as an engineer all my life. Having developed a keen interest in finance, I decided on a career switch to the finance field and enrolled into the CFA program at the same time.
Adjusting to the drastic career change was tough. I naturally neglected the preparation for my Level I exam in June 2014. It was not until the middle of March 2014 that I realized I only had a little more than 2 months to the exam. To compound my problems, I basically did not have a preparation strategy. Having no background in finance at all, I tried very hard to read the curriculum from cover to cover, but eventually that fell flat. I can still recall the number of times I dozed off while studying, or just going back and forth trying to understand even the simplest concept. My mind simply could not keep up after a hard day at work.
Does all these sound familiar to you? Well, take heart. No matter how bleak it seems, at least sit for the exam and treat it as a learning experience. That was basically my attitude as I burrowed through my exam prep with toil and stress. By God’s grace, I did pass my Level I exam in June 2014. It was an experience I would not want to revisit though.
For the Level II exam, I endeavoured not to repeat the mistakes I made. Based on the Pareto 80/20 principle, I learnt to extract the most essential bits from the curriculum enough to give me that 80% result to pass. Being a visual learner, I took notes and summaries in pictorial form. Instead of reserving huge segments of time to study, I carved out pockets of time to learn and practise – accommodating to my full-time job. I managed to pass my Level II and Level III exams consecutively with considerably less effort and stress than when I did my level I.
I love the CFA Program and truly value the skills and ethics that are imparted to make me a better finance professional. My desire is to help candidates who are keen to pursue this path to do so in the most effective and painless process as possible – based on the lessons that I learnt as a candidate. I have set up PrepNuggets with the vision to revolutionise learning by using technology, catering to the short attention span that we can afford. If this makes sense to you, join the PrepNuggets community by signing up for your free student account. I am confident that the materials that we have laboriously crafted will bring you closer to that dream pass with just that 20% effort. Let us do the hard work for you.
Regards,
Keith Tan, CFA
Founder and Chief Instructor
PrepNuggets
Keith is the founder and chief instructor of PrepNuggets. He has a wide range of interests in all things related to tech, from web development to e-learning, gadgets to apps. Keith loves exploring different cultures and the untouched gems around the world. He currently lives in Singapore but frequently travels to share his knowledge and expertise with others.
Have you ever gotten stuck in your study because you can’t remember a formula, or what a specific term means? Now, say goodbye to scanning through all the videos and ploughing through pages and pages just to find what you are looking for. All the important formulas, definitions and diagrams you need for the exam are now at your fingertips at prepnuggets.com/glossary.
What’s more, these quick references are deeply integrated in our lessons, so you get a good idea of what the lesson covers even before watching the video. The references also point you to specific video lessons where it is covered, so you can quickly access the corresponding video to learn more about the term.
Available now for all Level I topics, this service is exclusive for our Premium and Pro members only. We will progressively add the rest of the topic areas over the next few months.
We think this is a game-changer for your CFA success!
Thank you for purchasing one of our courses on Udemy! Now that you have experienced the PrepNuggets way of learning, are you ready to take your exam prep to the next level with us?
We have an irresistible offer for you to upgrade to our Level I Premium Membership, where you will gain full access to ALL 10 topical courses under the CFA Level I curriculum.
Simply log in to any of our courses on Udemy, and head to the last lecture titled ‘BONUS: Continue Your Exam Prep With Us!‘. You will find the exclusive link to sign up for this offer!
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On the 1st of March 2018, we took a bold step of faith to put our Financial Reporting and Analysis (FRA) course on Udemy.
For those of you who are new to Udemy, it is the world’s largest marketplace for online courses. Think of it like the EBay of online courses.
So imagine our trepidation in pitting our course in this highly competitive platform, against the many CFA prep providers already entrenched on the platform.
Overwhelming.
Yes, that’s the word that aptly describes the response to our course from the Udemy community.
The “Best Seller” tag from Udemy is attached to only one best selling course in its category. In just 1 month, our FRA course became the best selling CFA course on the platform. If you do a search for ‘CFA Level 1’, our course comes out on top in the search rankings.
Since the launch on 1 March, we have had more than 250 paid enrolments. While we are heartened by this figure, nothing beats knowing that our course has reached 50 countries around the world! It was simply heartwarming to receive messages from students from countries we barely know about, telling us how much they love the course and their wish that we would produce more of such courses. This certainly spurs us on to produce more materials to ease the burden of CFA candidates worldwide.
As of today, our course has a high average rating of 4.8 out of 5.0. 74% of the reviewers gave us 5 stars! We take this as endorsement that we are doing things right, and will continue in using the Pareto principle approach for our course materials. There are, of course, constructive feedback as well, and we aim to incorporate some of the feedback in producing the upcoming courses.
We are working hard to bring more of our courses to Udemy! We realise some candidates prefer to purchase courses as they need individually, so we endeavour to give more options to our potential students. Check out our Udemy Courses Page to find out which of our courses are available on Udemy for your purchase.
If you have purchased our course on Udemy and would like to continue with the PrepNuggets study approach for other topics, we have an awesome upgrade offer to Premium membership for you!
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