AICPA Regulation 3

Question 1

Under the Uniform Commercial Code Article 2, a merchant's firm offer is irrevocable for up to how many months even without consideration?

Accepted Answer

3 months

Answer

UCC §2-205 makes a merchant's written, signed firm offer irrevocable for the stated period, not to exceed 3 months, without requiring consideration.

Question 2

For AMT purposes, which of the following is an adjustment that may increase alternative minimum taxable income for individual taxpayers?

Accepted Answer

Standard deduction claimed instead of itemizing

Answer

The standard deduction is not allowed for AMT purposes, so taxpayers who claim it for regular tax must add it back when computing AMTI.

Question 3

A CPA discovers during an audit that a client's financial statements materially misstate revenues. The client refuses to correct the statements. What is the CPA's most appropriate course of action?

Accepted Answer

Issue an adverse or qualified opinion

Answer

When a client refuses to correct a material misstatement, the CPA should issue a qualified opinion (material but not pervasive) or adverse opinion (pervasive), not withdraw without warning.

Question 4

Under IRC §1031, a like-kind exchange defers recognition of gain. Which of the following types of property does NOT qualify for like-kind exchange treatment after TCJA 2017?

Accepted Answer

Intellectual property or personal property such as equipment

Answer

After TCJA, §1031 like-kind exchange treatment is limited to real property; personal property (equipment, vehicles, IP) no longer qualifies.

Question 5

A surety who pays the creditor on behalf of the principal debtor is entitled to which of the following rights against the principal?

Accepted Answer

Subrogation and reimbursement

Answer

After payment, a surety has the right of subrogation (stepping into the creditor's position) and reimbursement (recovering from the principal what the surety paid).

(AICPA) American Institute of Certified Public Accountants Practice Test

(AICPA) American Institute of Certified Public Accountants Practice Test

AICPA Regulation 3