AICPA Certified Public Accountant CPA Regulation - CPA-Regulation Exam Practice Test
On December 1, 1997, Krest, a self-employed cash basis taxpayer, borrowed $200,000 to use in her business. The loan was to be repaid on November 30, 1998. Krest paid the entire interest amount of
$24,000 on December 1, 1997. What amount of interest was deductible on Krest's 1997 income tax return?
$24,000 on December 1, 1997. What amount of interest was deductible on Krest's 1997 income tax return?
Correct Answer: A
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DAC Foundation awarded Kent $75,000 in recognition of lifelong literary achievement. Kent was not required to render future services as a condition to receive the $75,000. What condition(s) must have been met for the award to be excluded from Kent's gross income?
I. Kent was selected for the award by DAC without any action on Kent's part.
II. Pursuant to Kent's designation, DAC paid the amount of the award either to a governmental unit or to a charitable organization.
I. Kent was selected for the award by DAC without any action on Kent's part.
II. Pursuant to Kent's designation, DAC paid the amount of the award either to a governmental unit or to a charitable organization.
Correct Answer: B
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Under the uniform capitalization rules applicable to property acquired for resale, which of the following costs should be capitalized with respect to inventory if no exceptions are met?
Correct Answer: C
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Which of the following is subject to the Uniform Capitalization Rules of Code Sec. 263A?
Correct Answer: C
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Clark bought Series EE U.S. Savings Bonds after 1989. Redemption proceeds will be used for payment of college tuition for Clark's dependent child. One of the conditions that must be met for tax exemption of accumulated interest on these bonds is that the:
Correct Answer: D
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Tom and Joan Moore, both CPAs, filed a joint 1994 federal income tax return showing $70,000 in taxable income. During 1994, Tom's daughter Laura, age 16, resided with Tom. Laura had no income of her own and was Tom's dependent.
Determine the amount of income or loss, if any that should be included on page one of the Moores'
1994 Form 1040.
In 1994, Joan received $1,300 in unemployment compensation benefits. Her employer made a $100 contribution to the unemployment insurance fund on her behalf.
Determine the amount of income or loss, if any that should be included on page one of the Moores'
1994 Form 1040.
In 1994, Joan received $1,300 in unemployment compensation benefits. Her employer made a $100 contribution to the unemployment insurance fund on her behalf.
Correct Answer: E
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In which of the following situations may taxpayers file as married filing jointly?
Correct Answer: C
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