CPA REG PRACTICE TEST – APRIL 2026 (UPDATED)
REVIWED FROM ACTUAL TEST 100 QUESTIONS AND
100% VERIFIED ANSWERS| A+ GRADE Q&A |
INSTANT DOWNLOAD PDF
1. The primary purpose of the Sarbanes-Oxley Act (SOX) is to:
A. Provide tax incentives for corporations
B. Enhance financial reporting and internal controls
C. Regulate state tax procedures
D. Establish GAAP
It strengthens internal controls and financial disclosures for public companies.
2. Which entity establishes U.S. GAAP?
A. IRS
B. FASB
C. AICPA
D. SEC
FASB issues accounting standards in the U.S.
3. A taxpayer’s filing status primarily affects:
A. Audit risk
B. Tax brackets and standard deduction
C. Penalty amounts
D. Due dates
Filing status determines tax rates and deduction amounts.
4. Income tax is imposed on the basis of:
A. Cash flows
B. Taxable income
,C. Gross receipts
D. Assets
Taxable income determines tax liability.
5. For tax purposes, a dependent must meet the:
A. Capital gains test
B. Income test only
C. Support test only
D. Relationship, age, and support tests
All criteria define a qualifying dependent.
6. Self-employment tax is imposed to fund:
A. Unemployment insurance
B. Federal income tax
C. Social Security and Medicare
D. Corporate tax credits
Self-employment tax covers FICA components.
7. Which of the following is a tax credit (not deduction)?
A. Mortgage interest
B. State income tax
C. Child tax credit
D. Charitable contributions
Credits directly reduce tax liability.
8. The deadline for individual tax returns (without extension) is:
A. March 15
B. April 15
C. June 15
D. October 15
, Standard due date for individuals.
9. A net operating loss (NOL) for a sole proprietor can be:
A. Carried forward indefinitely
B. Carried back 5 years
C. Carried forward to offset future income
D. Only carried back
Current rules allow carryforwards.
10. Which income is NOT taxable?
A. Wages
B. Interest
C. Life insurance proceeds received due to death
D. Retirement distributions
Life insurance paid upon death is non-taxable.
11. A capital gain arises when an asset is:
A. Exchanged at book value
B. Sold for more than its basis
C. Donated to charity
D. Sold at a loss
Gain occurs when sale price > basis.
12. The basis of property received as a gift is generally:
A. Fair market value at date of gift
B. Donor’s basis
C. $0
D. Appraised value
Carryover basis applies for gifts.
REVIWED FROM ACTUAL TEST 100 QUESTIONS AND
100% VERIFIED ANSWERS| A+ GRADE Q&A |
INSTANT DOWNLOAD PDF
1. The primary purpose of the Sarbanes-Oxley Act (SOX) is to:
A. Provide tax incentives for corporations
B. Enhance financial reporting and internal controls
C. Regulate state tax procedures
D. Establish GAAP
It strengthens internal controls and financial disclosures for public companies.
2. Which entity establishes U.S. GAAP?
A. IRS
B. FASB
C. AICPA
D. SEC
FASB issues accounting standards in the U.S.
3. A taxpayer’s filing status primarily affects:
A. Audit risk
B. Tax brackets and standard deduction
C. Penalty amounts
D. Due dates
Filing status determines tax rates and deduction amounts.
4. Income tax is imposed on the basis of:
A. Cash flows
B. Taxable income
,C. Gross receipts
D. Assets
Taxable income determines tax liability.
5. For tax purposes, a dependent must meet the:
A. Capital gains test
B. Income test only
C. Support test only
D. Relationship, age, and support tests
All criteria define a qualifying dependent.
6. Self-employment tax is imposed to fund:
A. Unemployment insurance
B. Federal income tax
C. Social Security and Medicare
D. Corporate tax credits
Self-employment tax covers FICA components.
7. Which of the following is a tax credit (not deduction)?
A. Mortgage interest
B. State income tax
C. Child tax credit
D. Charitable contributions
Credits directly reduce tax liability.
8. The deadline for individual tax returns (without extension) is:
A. March 15
B. April 15
C. June 15
D. October 15
, Standard due date for individuals.
9. A net operating loss (NOL) for a sole proprietor can be:
A. Carried forward indefinitely
B. Carried back 5 years
C. Carried forward to offset future income
D. Only carried back
Current rules allow carryforwards.
10. Which income is NOT taxable?
A. Wages
B. Interest
C. Life insurance proceeds received due to death
D. Retirement distributions
Life insurance paid upon death is non-taxable.
11. A capital gain arises when an asset is:
A. Exchanged at book value
B. Sold for more than its basis
C. Donated to charity
D. Sold at a loss
Gain occurs when sale price > basis.
12. The basis of property received as a gift is generally:
A. Fair market value at date of gift
B. Donor’s basis
C. $0
D. Appraised value
Carryover basis applies for gifts.
