Certified Public Accountant (CPA) Regulation 3

Question 1

Which of the following is NOT a requirement for a valid Chapter 7 bankruptcy petition under the means test?

Accepted Answer

Debtor must have no prior bankruptcies

Answer

A prior bankruptcy does not automatically disqualify a debtor from Chapter 7; prior filings only affect eligibility for discharge timing.

Question 2

An S corporation has $100,000 of ordinary income. Shareholder A owns 30% of shares. What amount flows through to Shareholder A?

Accepted Answer

$30,000

Answer

S corporation income is allocated to shareholders based on their pro-rata percentage of stock ownership.

Question 3

Under the Foreign Corrupt Practices Act (FCPA), which of the following payments is a permissible 'facilitating payment'?

Accepted Answer

Paying a low-level official to expedite routine permit processing

Answer

The FCPA permits facilitating payments made to foreign officials to expedite or secure performance of routine non-discretionary governmental actions.

Question 4

A taxpayer has net operating loss (NOL) carryforward provisions under post-TCJA rules. Which statement is correct?

Accepted Answer

NOLs can only be carried forward indefinitely but limited to 80% of taxable income

Answer

Post-TCJA, NOLs generated after 2017 cannot be carried back (generally) but can be carried forward indefinitely, limited to 80% of taxable income.

Question 5

Which element is NOT required to establish negligence in a tort claim against a CPA?

Accepted Answer

Intent to deceive

Answer

Negligence does not require intent; the four elements are duty, breach, causation, and damages.

Certified Public Accountant Practice Test