(CPA) Regulation Flashcards
7 cards from real Certified Public Accountant practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 (CPA) Regulation flashcards as text
Which of the following individuals is subject to self-employment tax?
Answer: A sole proprietor with net earnings from self-employment of $500
A sole proprietor with net earnings from self-employment of $400 or more is subject to self-employment tax.
Under the UCC, a 'firm offer' made by a merchant is irrevocable for up to:
Answer: 90 days
Under UCC Article 2, a merchant's firm offer is irrevocable for the time stated, or if no time is stated, for a reasonable time not exceeding 3 months (90 days).
A taxpayer sells their primary residence for a $350,000 gain. They are single and have lived in the home for 3 of the last 5 years. How much gain is excluded?
Answer: $250,000
Single taxpayers may exclude up to $250,000 of gain on the sale of a principal residence if ownership and use tests are met.
Which of the following is true regarding the attorney-client privilege as it applies to a CPA working alongside an attorney?
Answer: The CPA's work product may be protected if assisting an attorney in legal representation
A CPA's communications may be protected under attorney-client privilege if the CPA is acting as an agent of an attorney providing legal services.
Which of the following is a 'hot asset' for purposes of IRC Section 751?
Answer: Unrealized receivables and substantially appreciated inventory
Hot assets under Section 751 include unrealized receivables and substantially appreciated inventory items, which trigger ordinary income recognition on sale.
A C corporation has $500,000 of accumulated earnings and no business justification. The IRS may impose the accumulated earnings tax at what rate?
Answer: 20%
The accumulated earnings tax is imposed at a flat rate of 20% on accumulated taxable income beyond the allowed credit.
Which of the following contracts is enforceable despite the absence of consideration?
Answer: A promise under promissory estoppel where the promisee reasonably relied to their detriment
Promissory estoppel is an equitable doctrine that makes a promise enforceable when the promisee reasonably relied on it to their detriment, substituting for consideration.