Qestions regarding Schweser Book 7 for level 1

5 A 6 A 7 C? 8 A?

A, A, C, B

you should be ok with time- the book 7 tests run extra long, so don’t worry if you go over. i can’t think of anyone on this board who took the june test who was strapped for time at all. as for staying focused 2-3 hours into the test on your second half at 4pm and beyond, now that’s a different story. i personally only did one full 6 hr back to back real life test simulation in a day test before the real thing, but definitely got used to sitting down for 3 hrs and doing a 1/2 practice test… funny how the mind starts to wander sometimes if you’re not zoned in and in the mode of taking long tests. notice on your practice tests if you make dumb mistakes, like they ask you which is the LEAST and you picked MOST or stuff like that. if that’s an issue, some people before on this board have suggested circling that key word in the question to remind yourself what you’re looking for. i thought that was a pretty good test tip and did it a lot. you’ll be surprised how little you use your calculator on the real thing.

A,A,C,D

A A C B

I routinely do things like circling keywords and noting right on the questions. I was so afraid that this kind of practice would not be allowed on the test. Your suggestion relaxes me a great deal. Good!

how is the answer to number one a? i dont get it… i am saying b

The answer provided is that lower salvage value results lower FUTURE expense, thus increase FUTURE earning. And especially, after asset is sold, the initial write-down can be reversed and reported as a gain to increase earning.

Joe- Re: Question 1 - maybe I am misunderstanding something here, but doesn’t decreasing salvage values result in higher expense because of higher depcreciation, and thus lower NI?

just a little diversion here… where can I find Book 7 in pdf?:slight_smile: thanks a zillion…

answers for 05-08 provided by schweser are ACCC I was just as confused as you are. P.S, Daannyy: I bought book 7 on ebay.

One more FSA 7-1-PM-190 RGH entered into a sale-leaseback arrangement of its manufacturing plant. when should RGH recognize gain on the sale of the plant under IAS GAAP? A. recognize the gain immediately if the lease if an operating lease and defer the gain if the lease is a capital lease B. Defer the gain if the lease is an operating lease and recognize the gain immediately if the lease is a capital lease C. Defer the gain if the lease is a capital lease or an operating lease D. Recognize the gain immediately if the lease is a capital lease or an operating lease. My question is that is 1. is lease recognition under IAS GAAS different from U.S GAAP? 2. Clearly this one is a sales type lease if it is a capital lease. Shouldn’t gain be recognized at the beginning of the lease?

naivejoe Wrote: ------------------------------------------------------- > answers for 05-08 provided by schweser are ACCC > I was just as confused as you are. > > P.S, Daannyy: I bought book 7 on ebay. ACCC!!! :’(

Answer should be D, since it’s a sale-leaseback agreement, you sell your plant to some 3rd party and then lease it back (either capital or operating lease) from them. So irrespective of the lease type (further ahead in the transaction), you realise the initial lumsome from the sale of your plant, and should ideally be Recognized immediately. I mean what’s the use of having a sale-leaseback agreement to sell your machinary, then entering into a capital lease to buyback the same old junky machinary you just sold to them?? Any reallife use of this a collateral transaction? sale-leaseback with the lease being categorized as the operating lease seems pretty OK!! Any thoughts … ? - Dinesh S

kevin002 : Don’t worry! I got all wrong. The consensus here is how much these questions are NOT representation! Just think this way: CFAI can’t fail all of us. B/S, Book 7 only makes me realize how easy book 6 is, which is considered to be closer to the real exam. Joe

I’d go with D too.

The answer given by Schweser is A recognize the gain immediately if the lease is an operating lease and defer the gain if the lease is a capital lease. I am very confused!

naivejoe Wrote: ------------------------------------------------------- > The answer given by Schweser is > > A > recognize the gain immediately if the lease is an > operating lease and defer the gain if the lease is > a capital lease. > > I am very confused! I feel much better knowing I’m not the only one. Looks like we all need some FSA work - I KNOW I do.

If anyone into sharing bookk 7 pdf, and interested in other materials I bought, pls drop me a line at iver2340@gmail.com thanks a zillion…