CAT Accounting Technician Taxation & Regulatory Compliance 3

Question 1

Which of the following is a 'below-the-line' deduction on an individual tax return?

Accepted Answer

Charitable contribution deduction

Answer

Charitable contribution deductions are itemized deductions taken below the line (after AGI), not adjustments to gross income.

Question 2

An S corporation election is made by filing which IRS form, and by what date for it to be effective for the current tax year (first 2.5 months)?

Accepted Answer

Form 2553, within 75 days of year-start

Answer

Form 2553 must be filed within the first 2 months and 15 days (75 days) of the tax year to be effective for that year.

Question 3

The Foreign Corrupt Practices Act (FCPA) prohibits U.S. companies from bribing foreign officials. Which two key provisions does it contain?

Accepted Answer

Anti-bribery and books/records provisions

Answer

The FCPA has two main provisions: the anti-bribery provision and the accounting/books and records provision requiring accurate record-keeping.

Question 4

A business purchased equipment for $50,000. In Year 1, it claimed $20,000 of bonus depreciation. If the equipment is sold in Year 2 for $40,000, what is the adjusted basis for gain calculation?

Accepted Answer

$30,000

Answer

Adjusted basis equals original cost ($50,000) minus depreciation taken ($20,000), resulting in a $30,000 basis.

Question 5

Under the Bank Secrecy Act, a financial institution must file a Currency Transaction Report (CTR) for cash transactions exceeding what threshold?

Accepted Answer

$10,000

Answer

The Bank Secrecy Act requires CTR filings for cash transactions over $10,000 in a single business day.

(CAT) Certified Accounting Technician Practice Test

(CAT) Certified Accounting Technician Practice Test

CAT Accounting Technician Taxation & Regulatory Compliance 3