TAX
This is the uniform federal corporate tax rate that applies to all C corporations filing Form 1120
What is 21%?
Original cost of asset - accumulated depreciation = ?
What is Net Book Value?
This is the minimum score required to pass each CPA exam.
What is 75?
Which of these opinion types represents the auditor's satisfaction with the company's financial reporting?
A. Adverse
B. Qualified
C. Disclaimer
D. Unqualified
What is answer D?
This is the year Arthur Andersen as a firm surrendered it's CPA license after the Enron scandal.
What is 2002?
This is the standard deduction for a taxpayer filing as 'Single' in 2025
What is $15,750?
Sales revenue - cost of goods sold = ?
What is gross profit?
This is the length in hours of each CPA exam.
What is four hours?
An auditor most likely would make inquiries of production and sales personnel concerning possible obsolete or slow-moving inventory to support management’s financial statement assertion of:
A) valuation or allocation.
B)presentation and disclosure.
C) rights and obligations
D) existence or occurrence.
What is answer A?
This is the difference between a tax credit and a tax deduction.
What is: Deductions reduce the amount of your income that is subject to tax (Ex: Charitable contributions) while Credits reduce the amount of tax you owe, dollar for dollar (Ex: Child Tax Credit)?
This element of a complete set of financial statements is reported at a specific date in time.
What is a balance sheet?
This is the number of multiple choice 'testlets' contained in each section of the CPA exam.
What is 2?
Which of the following will not result in modification of the auditor's report due to a scope limitation?
A) Reliance placed on the report of another auditor.
B)Restrictions imposed by the client.
C)Inability to obtain sufficient competent evidential matter.
D)Inadequacy in the accounting records.
What is answer A?
In determining a taxpayer’s amount of taxable gifts for the year, the Internal Revenue Code (IRC) allows each of the following except:
A.Charitable contribution donation
B.Gift Tax Annual Exclusion
C.Marital Deduction
D. Standard Deduction
What is answer D.
This component of a complete set of financial statements is said to measure the operating performance of a business.
What is the income statement?
CPA licenses are issued by
A. American Institute of Certified Public Accountants (AICPA)
B. National Association of State Boards of Accountancy (NASBA)
C. Financial Accounting Standards Board (FASB)
D. Individual States (e.g., Virginia Board of Accounting
What is answer choice D?
In searching for unrecorded liabilities, an auditor most likely would examine the:
A. Cutoff bank statement for deposits recorded in the books, but not by the bank.
B. Details of accounts receivable confirmations that are classified as "exceptions".
C. Receiving reports for items received before year end, but not yet recorded.
D. Files of purchase requisitions for items ordered just before the year end.
What is answer D.
This is how much of a foreign corporation's stock must a U.S. person must own to be deemed a U.S. shareholder for the purposes of the CFC (Controlled Foreign Corporation) rules?
What is 10%?
What is ASC 842?
This is the number of months candidates have to pass all four sections after they pass the first exam.
What is 30 months?
Before accepting an audit engagement, a CPA should evaluate whether conditions exist that raise questions as to the integrity of management. Which of the following conditions most likely would raise such questions?
A. There are significant differences between the entity's forecasted financial statements and the financial statements to be audited.
B. The CPA will not be permitted to have access to sensitive information regarding the salaries of senior management.
C. There have been substantial inventory write-offs just before the year end in each of the past four years.
D. The CPA becomes aware of the existence of related party transactions while reading the draft financial statements
What is answer B?
Tara is 55 years old and had $4,000 worth of taxable earned income in 2024, this number represents the maximum amount that Tara can contribute to an IRA for the current year.
A. 4,000
B. 7,000
C. 5,000
D. 8,000
What is answer C?
Explanation: The maximum amount that a taxpayer can contribute to an IRA is the lesser of earned income or $7,000 (2025). Taxpayers aged 50 or older can contribute an additional $1,000.
This is a balance sheet that distinguishes between current and non-current assets and liabilities.
What is a classified balance sheet?
This is the authoritative body that prepares the CPA exam.
What is the AICPA?
According to rules issued under the Sarbanes-Oxley Act, which of the following non-audit services is an accounting firm permitted to provide for an issuer audit client without impairing the accounting firm's independence?
A. Providing an expert opinion in order to advocate the client's interest in litigation.
B. Providing an expert opinion in order to advocate the client's position in a regulatory investigation.
C. Providing factual accounts in testimony explaining positions taken during the performance of any services provided to the client.
D. Providing legal services to the client in a foreign jurisdiction
What is answer C.
This is the percentage a parent corporation must have of the voting power and total value of stock in a subsidiary, to file a consolidated return?
What is 80% ownership?
This is the basic formula used to calculate EPS (earning per share)
What is Income available to common shareholders / weighted average number of common shares
This is the document you receive once you have been approved to take the CPA exam.
What is notice to schedule?
Which of the following factors most likely would cause a CPA not to accept a new audit engagement?
A. Management reputation for failing to provide schedules to prior auditors on a timely basis.
B. Management's unwillingness to make all financial records available to the CPA.
C. The CPA's inability to review the predecessor auditor's working papers.
D. The CPA's lack of understanding of the entity's operations and industry.
What is answer B?