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Study Resources (Accounting)

31) The citation "Reg. Sec. 1.199-2" refers to A) the first regulation issued in 1999. B) the second regulation issued in 1999. C) a regulation that interprets Code Section 199. D) a regulation that can be found on page 199. 32) Which regulation deals with Code Section 165? A) Reg. Sec. 1.165-5 B) Reg. Sec. 165.183-5 C) Reg..
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71) Identify which of the following statements is true. A) The assignment of income doctrine requires a cash method of accounting for a transferor/shareholder to recognize income when accounts receivable are transferred by the shareholder to the corporation in a Sec. 351 exchange in which no gain is otherwise recognized. B) The.
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108) On May 1 of the current year, Kiara, Victor, Pam, and Joe form Newco Corporation with the following investments: Property Transferred Number of TransferorAssetBasis to TransferorFMVcommon shares issued KiaraLand $12,000              $30,000 Building              38,000              70,000              400 Mortgage and the land & building              60,000              60,000 VictorEquipment              25,000              40,000              300 PamVan 15,000              10,000              .
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21) The following details are provided by a manufacturing company: Product line Investment $1,000,000 Useful life 12 years Estimated annual net cash inflows for first year $400,000 Estimated annual net cash inflows for second year $350,000 Estimated annual net cash inflows for next ten years $300,000 Residual value $50,000 Depreciation method Straight-line Required rate of return 12% Calculate the payback period for the investment. A) 2.5 years B) 2.83 year C).
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11) When a company is evaluating an investment proposal with high risk, a low discount rate should be used, and vice versa. 12) Compound interest used in discounted cash flow calculations assumes that companies will reinvest future cash flows whenever they are received. 13) If an investment project's internal rate of return.
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94) Zoe Ann transfers machinery having a $36,000 adjusted basis and a $70,000 FMV for all 100 shares of Zeema Corporation's stock. Before the transfer, Zoe Ann used the machinery in her business. She originally paid $50,000 for the machinery and claimed $14,000 of depreciation before transferring the machinery. Zoe.
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Learning Objective 26-3 1) The fact that invested cash earns income over time is called the time value of money. 2) An annuity refers to a series of equal cash flows received or paid annually. 3) All else being equal, the shorter the investment period, the higher the total amount of interest earned. 4).
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21) An accounting information system is said to be relevant, if it ________. A) works smoothly with the business's employees and organizational structure B) safeguards a business's assets and reduces the likelihood of fraud and errors C) provides information that will improve decision making and reduce uncertainty D) accommodates changes in the business over.
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31) The following details are provided by Doppler Systems: Project A Project B Project C Project D Initial investment $420,000 $200,000 $550,000 $500,000 PV of cash inflows $570,000 $380,000 $800,000 $390,000 Payback period (years) 3.6 3.2 4.0 2.0 NPV of project $150,000 $180,000 $250,000 ($110,000) Calculate the profitability index for Project A. A) 0.98 B) 1.08 C) 1.36 D) 1.66 32) The following details are provided by Doppler Systems: Project A Project B Project C Project D Initial investment $420,000 $200,000 $550,000 $500,000 PV of cash inflows $570,000 $380,000 $800,000 $390,000 Payback period (years) 3.6 3.2 4.0 2.0 NPV of.
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11) Which of the following most accurately describes the annuity? A) an investment which produces increasing cash flows overtime B) an installment loan with amortizing principal payments C) a stream of equal installments of cash flows made at equal time intervals D) a term life insurance policy 12) Lora Corp. is going to receive $10,000.
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115) Discuss the IRS reporting requirements under Sec. 351. 116) Jane and Joe plan to go into business together. They plan to incorporate the business. What tax issues should they consider when deciding whether or not to elect S corporation status? •Are their individual marginal tax rates lower or higher than a.
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111) Describe the appeals process in tax litigation. 112) Discuss the differences and similarities between regular and memorandum decisions issued by the U.S. Tax Court. 113) Assume that the Tax Court decided an expenditure in question was deductible. The government appealed to the Fifth Circuit, which reversed the decision and held it.
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21) A company has four vendors and the accounts payable subsidiary ledger shows the following balances. Alpha $275,821 Beta 143,474 Gamma 78,943 Delta 34,187 Calculate the accounts payable balance in the general ledger. A) $419,295 B) $532,425 C) $275,821 D) $256,604 22) Which of the following is true of a sales journal? A) It is a special journal used to record all the cash sales. B).
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51) Jeremy transfers Sec. 351 property acquired three years earlier having a $100,000 basis and a $160,000 FMV to Jeneva Corporation. Jeremy receives all 200 shares of Jeneva stock having a $140,000 FMV, and a $20,000 90-day Jeneva note. What is Jeremy's recognized gain? A) $0 B) $60,000 C) $20,000 D) $160,000 52) Carolyn transfers.
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11) Any losses on the sale of Section 1244 stock are ordinary. 12) Upon formation of a corporation, its assets have the same bases for book and tax purposes. 13) Business assets of a sole proprietorship are owned by A) a member. B) an individual. C) a partner. D) a stockholder. 14) Identify which of the following.
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Learning Objective APP. C-4 1) Hardware is electronic equipment that includes computers, monitors, printers, and the network that connects them. 2) Enterprise resource planning (ERP) systems are software systems that can integrate all of a company's functions, departments, and data into a single system. 3) One of the main disadvantages of a typical.
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Learning Objective 26-4 1) Net present value is defined as the difference between the present value of the project's net cash inflows and the cost of investment. 2) Management's minimum desired rate of return on a capital investment is known as the return on investment. 3) The residual value is discounted as a.
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21) Identify which of the following statements is true. A) Paragraph references are most commonly used when citing or referring to the tax statutes. B) Title 26 of the United States Code and the Internal Revenue Code of 1986 are synonymous. C) Before 1939, tax statutes were codified or compiled into one document. D).
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21) Which of the following transactions is recorded in the "Receive Payments" function of QuickBooks? A) electricity bill payments B) merchandise inventory sold on account to a customer C) products sold for cash to a customer D) coupon payments to the bondholders Functional:  Reporting 22) Which of the following transactions is recorded in the "Enter Bills".
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88) Tanicia owns all 100 shares of Midwest Corporation's stock, valued at $100,000. Gwen owns property that has a $15,000 adjusted basis and a $100,000 FMV. Gwen contributes the property to Midwest Corporation in exchange for 100 shares of newly issued Midwest stock. Does Section 351 apply to Gwen's exchange?.
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61) Identify which of the following statements is true. A) Section 351 provides for nonrecognition of gain for the transferee corporation when it distributes appreciated land that is boot property to a shareholder. B) A corporation must recognize a loss when transferring noncash boot property that has declined in value and its.
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1) A sole proprietor is required to use the same reporting period for both business and individual tax information. 2) S corporations are flow-through entities in which S income is allocated to shareholders. 3) S corporations must allocate income to shareholders based on their proportionate stock ownership. 4) The check-the-box regulations permit an.
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104) According to the Statements on Standards for Tax Services, what belief should a CPA have before taking a pro-taxpayer position on a tax return? 105)  According to the AICPA's Statements on Standards for Tax Services, what duties does the tax practitioner owe the client? 106) Outline and discuss the tax research.
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11) When a taxpayer contacts a tax advisor requesting advice as to the most advantageous way to dispose of a stock, the tax advisor is faced with A) a restricted-fact situation. B) a closed-fact situation. C) an open-fact situation. D) a recognized-fact situation. 12) Investigation of a tax problem that involves a closed-fact situation means.
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Learning Objective APP. C-3 1) Cash purchases are recorded in the purchases journal. 2) The purchases journal is a special journal used to record all purchases of merchandise inventory, office supplies, and other assets on account. 3) When recording in a purchases journal with a periodic inventory system, the Merchandise Inventory DR column.
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11) The purchases journal is a special journal used to record ________. A) cash receipts, interest rate payments, and purchases B) credit sales of assets that occur infrequently such as buildings, property, and equipment C) credit sales of inventory D) merchandise inventory, office supplies, and other assets purchased on account 12) Which of the following.
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11) One of the advantages of a computerized accounting information system, as compared to a manual one, is that it does not cost to ensure that the firm's data and information are secure. 12) In an accounting information system, outputs are the reports used for decision making, including the financial statements. 13).
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79) Explain the difference between a closed-fact and open-fact situation. 80) In all situations, tax considerations are of primary importance. Do you agree or disagree? Support your answer. 81) Describe the format of a client memo. 82) Explain how committee reports can be used in tax research. What do they indicate? 83) In 1998,.
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Learning Objective APP. C-2 1) A general ledger is an accounting journal designed to record one specific type of transaction. 2) Sales on account are recorded in a cash receipts journal. 3) A subsidiary ledger is a record of accounts that provides supporting details on individual balances, the total of which appears in.
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11) Which of the following is an example of hardware? A) monitor B) malware C) firewall D) operating system 12) Which of the following is an entry-level accounting software package? A) Microsoft Word B) QuickBooks C) Minitab D) Router 13) An enterprise resource planning (ERP) is a ________. A) hardware system that controls the access of employees to different levels of.
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21) Gamma Corporation is considering an investment of $500,000 in a land development project. It will yield cash flows of $200,000 for 5 years. The company uses a discount rate of 9%. What is the net present value of the investment? Present value of annuity of $1: 8% 9% 10% 1 0.926 0.917 0.909 2 1.783 1.759 1.736 3 2.577 2.531 2.487 4 3.312 3.24 3.17 5 3.993 3.89 3.791 A) $230,000 B) $278,000 C) $330,000 D) $200,000 22).
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84) In which of the following independent situations is the Sec. 351 control requirement met? a)Jane transfers property to Jet Corporation for 75% of Jet Corporation's stock, and Susan provides services to Jet Corporation for the remaining 25% of Jet Corporation stock. b)Paul transfers property to Pride Corporation for 60% of Pride's.
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41) Carmen and Marc form Apple Corporation. Carmen transfers land that is Sec. 1231 property, with an adjusted basis of $18,000 and an FMV of $20,000 in exchange for one-half of the Apple Corporation stock. Marc transfers equipment that originally cost $28,000 on which he has taken $5,000 in depreciation.
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Learning Objective APP. C-1 1) An accounting information system (AIS) collects, records, stores, and processes accounting data to produce information that is useful for decision makers. 2) The collection of time records is an accounting information system activity that is classified as a business transaction that involves the sale of merchandise inventory. 3).
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21) Identify which of the following statements is true. A) C corporation operating losses are deductible by the individual shareholders. B) If a C corporation does not distribute its income to its shareholders annually, double taxation cannot occur. C) Capital losses incurred by a C corporation can be used to offset the corporation's.
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