CBA Tax Planning & Accounting Fundamentals Flashcards
6 cards from real CBA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CBA Tax Planning & Accounting Fundamentals flashcards as text
A Qualified Opportunity Zone (QOZ) investment allows taxpayers to defer and potentially reduce capital gains taxes by investing realized gains into:
Answer: A Qualified Opportunity Fund within 180 days of the gain
Investing capital gains into a Qualified Opportunity Fund within 180 days defers the original tax and can reduce it, with gains from the QOF investment potentially excluded if held 10+ years.
For a business with irregular cash flow, which budgeting method is most appropriate because it resets and justifies every expense from zero each period?
Answer: Zero-based budgeting
Zero-based budgeting requires every expense to be justified from scratch each period, eliminating the assumption that prior-year spending levels are appropriate, which is valuable for businesses with variable cash flows.
The 'qualified business income' (QBI) deduction under Section 199A primarily benefits owners of:
Answer: Pass-through entities such as S corporations, partnerships, and sole proprietorships
Section 199A allows eligible pass-through business owners to deduct up to 20% of qualified business income, reducing their effective tax rate closer to the corporate rate.
Which financial statement reports a company's assets, liabilities, and stockholders' equity at a specific point in time?
Answer: Balance sheet
The balance sheet presents a snapshot of the business's financial position on a specific date, showing what the company owns (assets), owes (liabilities), and the residual equity (net worth).
A business advisor reviewing a client's accounts receivable aging report would be most concerned about invoices classified as:
Answer: Over 90 days outstanding
Invoices over 90 days are the most concerning because the probability of collection drops significantly with age, and these balances may require write-offs that impact reported income.
When a business sells a capital asset held for more than one year, the resulting gain is generally taxed at:
Answer: Long-term capital gains rates, which are lower than ordinary income rates
Long-term capital gains (from assets held over one year) are taxed at preferential rates of 0%, 15%, or 20% depending on taxable income, significantly lower than ordinary income rates.