FAC Finance and Accounting Taxation & Regulatory Compliance 2

Question 1

Under IRC Section 199A, qualified business income (QBI) deduction for pass-through entities is generally limited to what percentage?

Accepted Answer

20%

Answer

The QBI deduction under IRC Section 199A allows eligible taxpayers to deduct up to 20% of qualified business income from pass-through entities.

Question 2

Which IRS form must a corporation file to report its annual income tax return?

Accepted Answer

Form 1120

Answer

C corporations file Form 1120, the U.S. Corporation Income Tax Return, to report income, gains, losses, deductions, and credits.

Question 3

The FASB Accounting Standards Codification (ASC) 740 primarily addresses which accounting topic?

Accepted Answer

Income taxes

Answer

ASC 740 provides guidance on accounting for income taxes, including current and deferred tax assets and liabilities.

Question 4

A company has a deferred tax liability when:

Accepted Answer

Book income exceeds taxable income, creating future taxable amounts

Answer

A deferred tax liability arises when book income exceeds taxable income, meaning the company will owe more taxes in future periods when those amounts become taxable.

Question 5

Under the Sarbanes-Oxley Act, Section 302 requires corporate officers to certify which of the following?

Accepted Answer

Accuracy of financial statements and disclosure controls

Answer

SOX Section 302 requires the CEO and CFO to personally certify the accuracy of financial statements and the effectiveness of disclosure controls and procedures.

(FAC) Finance and Accounting Certification Practice Test

(FAC) Finance and Accounting Certification Practice Test

FAC Finance and Accounting Taxation & Regulatory Compliance 2