About Me
CPA
1 Regulation (REG)
1.1 Ethics, Professional Responsibilities, and Federal Tax Procedures
1.1 1 Professional ethics and responsibilities
1.1 2 Federal tax procedures and practices
1.1 3 Circular 230
1.2 Business Law
1.2 1 Legal rights, duties, and liabilities of entities
1.2 2 Contracts and sales
1.2 3 Property and bailments
1.2 4 Agency and employment
1.2 5 Business organizations
1.2 6 Bankruptcy
1.2 7 Secured transactions
1.3 Federal Taxation of Property Transactions
1.3 1 Basis determination and adjustments
1.3 2 Gains and losses from property transactions
1.3 3 Like-kind exchanges
1.3 4 Depreciation, amortization, and depletion
1.3 5 Installment sales
1.3 6 Capital gains and losses
1.3 7 Nontaxable exchanges
1.4 Federal Taxation of Individuals
1.4 1 Gross income inclusions and exclusions
1.4 2 Adjustments to income
1.4 3 Itemized deductions and standard deduction
1.4 4 Personal and dependency exemptions
1.4 5 Tax credits
1.4 6 Taxation of individuals with multiple jobs
1.4 7 Taxation of nonresident aliens
1.4 8 Alternative minimum tax
1.5 Federal Taxation of Entities
1.5 1 Taxation of C corporations
1.5 2 Taxation of S corporations
1.5 3 Taxation of partnerships
1.5 4 Taxation of trusts and estates
1.5 5 Taxation of international transactions
2 Financial Accounting and Reporting (FAR)
2.1 Conceptual Framework, Standard-Setting, and Financial Reporting
2.1 1 Financial reporting framework
2.1 2 Financial statement elements
2.1 3 Financial statement presentation
2.1 4 Accounting standards and standard-setting
2.2 Select Financial Statement Accounts
2.2 1 Revenue recognition
2.2 2 Inventory
2.2 3 Property, plant, and equipment
2.2 4 Intangible assets
2.2 5 Liabilities
2.2 6 Equity
2.2 7 Compensation and benefits
2.3 Specific Transactions, Events, and Disclosures
2.3 1 Leases
2.3 2 Income taxes
2.3 3 Pensions and other post-retirement benefits
2.3 4 Derivatives and hedging
2.3 5 Business combinations and consolidations
2.3 6 Foreign currency transactions and translations
2.3 7 Interim financial reporting
2.4 Governmental Accounting and Not-for-Profit Accounting
2.4 1 Governmental accounting principles
2.4 2 Governmental financial statements
2.4 3 Not-for-profit accounting principles
2.4 4 Not-for-profit financial statements
3 Auditing and Attestation (AUD)
3.1 Engagement Planning and Risk Assessment
3.1 1 Engagement acceptance and continuance
3.1 2 Understanding the entity and its environment
3.1 3 Risk assessment procedures
3.1 4 Internal control
3.2 Performing Audit Procedures and Evaluating Evidence
3.2 1 Audit evidence
3.2 2 Audit procedures
3.2 3 Analytical procedures
3.2 4 Substantive tests of transactions
3.2 5 Tests of details of balances
3.3 Reporting on Financial Statements
3.3 1 Audit report content
3.3 2 Types of audit reports
3.3 3 Other information in documents containing audited financial statements
3.4 Other Attestation and Assurance Engagements
3.4 1 Types of attestation engagements
3.4 2 Standards for attestation engagements
3.4 3 Reporting on attestation engagements
4 Business Environment and Concepts (BEC)
4.1 Corporate Governance
4.1 1 Internal controls and risk assessment
4.1 2 Code of conduct and ethics
4.1 3 Corporate governance frameworks
4.2 Economic Concepts
4.2 1 Microeconomics
4.2 2 Macroeconomics
4.2 3 Financial risk management
4.3 Financial Management
4.3 1 Capital budgeting
4.3 2 Cost measurement and allocation
4.3 3 Working capital management
4.3 4 Financial statement analysis
4.4 Information Technology
4.4 1 IT controls and security
4.4 2 Data analytics
4.4 3 Enterprise resource planning (ERP) systems
4.5 Operations Management
4.5 1 Strategic planning
4.5 2 Project management
4.5 3 Quality management
4.5 4 Supply chain management
4 2 1 Microeconomics Explained

2 1 Microeconomics Explained

Key Concepts

Supply and Demand

Supply and demand are fundamental concepts in microeconomics that describe the relationship between the quantity of a good or service that producers offer and the quantity that consumers demand. The law of demand states that as the price of a good decreases, the quantity demanded increases, and vice versa. The law of supply states that as the price of a good increases, the quantity supplied increases, and vice versa.

Example: If the price of apples decreases, consumers are likely to buy more apples (demand increases), while apple producers may reduce the quantity of apples they supply (supply decreases).

Market Equilibrium

Market equilibrium occurs where the quantity supplied equals the quantity demanded at a given price. This is the point where the market clears, and there is no surplus or shortage of the good. The equilibrium price and quantity are determined by the intersection of the supply and demand curves.

Example: In a perfectly competitive market for oranges, the equilibrium price is $1 per orange, and the equilibrium quantity is 100 oranges. At this price, consumers demand exactly 100 oranges, and producers supply exactly 100 oranges.

Elasticity

Elasticity measures the responsiveness of one variable to changes in another variable. Price elasticity of demand measures how much the quantity demanded of a good changes in response to a change in its price. Price elasticity of supply measures how much the quantity supplied of a good changes in response to a change in its price.

Example: If the price of gasoline increases by 10%, and the quantity demanded decreases by 5%, the price elasticity of demand for gasoline is 0.5. This indicates that the demand for gasoline is inelastic, meaning consumers are relatively unresponsive to price changes.

Consumer and Producer Surplus

Consumer surplus is the difference between the maximum price a consumer is willing to pay for a good and the actual price they pay. Producer surplus is the difference between the price a producer receives for a good and the minimum price they are willing to accept. Together, consumer and producer surplus represent the total economic benefit of a market transaction.

Example: If a consumer is willing to pay $5 for a cup of coffee but only pays $3, the consumer surplus is $2. If a producer is willing to sell a cup of coffee for $2 but receives $3, the producer surplus is $1. The total surplus is $3.

Market Structures

Market structures describe the competitive environment in which firms operate. The four primary market structures are perfect competition, monopoly, oligopoly, and monopolistic competition. Each structure has different characteristics, such as the number of firms, the degree of product differentiation, and the level of market power.

Example: In a perfectly competitive market, there are many firms selling identical products, and no single firm has market power. In contrast, a monopoly is a market with only one firm, giving it significant market power to set prices and control supply.

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