MGMT MISC – SU10 Exam Latest 2022/2023

MGMT MISC – SU10 Exam Latest 2022/2023. In Year 1, Brun Corp. properly accrued $10,000 for an income item on the basis of a reasonable estimate. In Year 2, Brun determined that the exact amount was $12,000. Which of the following statements is true? A. Brun is required to file an amended return to report the additional $2,000 of income. B. Brun is required to notify the IRS within 30 days of the determination of the exact amount of the item. C. The $2,000 difference is includible in Brun’s Year 2 income tax return. D. The $2,000 difference of income must be included when the reasonable estimate amount is determined. 2. An S corporation engaged in manufacturing has a year end of June 30. Revenue consistently has been more than $30 million under both cash and accrual basis of accounting. The stockholders would like to change the tax status of the corporation to a C corporation using the cash basis with the same year end. Which of the following statements is correct if it changes to a C corporation? A. The year end will be December 31, using the cash basis of accounting. B. The year end will be December 31, using the accrual basis of accounting. C. The year end will be June 30, using the accrual basis of accounting. D. The year end will be June 30, using the cash basis of accounting. 3. In order to adopt a fiscal tax year on its first federal income tax return, a corporate taxpayer must A. Maintain books and records and report income and expenses using the tax year B. Attach a completed Form 1128, Application to Adopt, Change, or Retain a Tax Year, to his or her fiscal-year-basis income tax return. C. File a short-period return D. Get IRS approval 4. ABC, a C corporation, ends its tax year on October 30. When must ABC’s income tax return be filed for the year ending October 30, 2020? A. Jan. 15, 2021 B. March 15, 2021 C. Feb. 15, 2021 D. Apr. 15, 2021 5. Most unincorporated businesses can choose whether to be taxed as a partnership or a corporation. The new regulations provide for a default rule if no election is made. If an election is not made and the default rules apply, which of the following is true? A. Any new domestic eligible entity having at least two or more members is classified as a partnership. B. Any new domestic eligible entity with a single member is disregarded as an entity separate from its owner. C. If all members of a new foreign entity have limited liability, the entity is classified as an association taxed as a corporation. D. All of the answers are correct. 6. In 2020, CPAs, Inc., a corporation owned entirely by its employees, all of whom are certified public accountants performing only services in the accounting profession, had taxable income of $110,000. What is the tax liability of CPAs, Inc., for 2020? A. $11,000 B. $13,200 C. $38,500 D. $23,100 7. Martin Corporation’s (a C corporation) bookkeeper told the owner that she could not have all the tax information ready for the accountant immediately after the tax year end of June 30. She was having surgery and asked if the tax return could be postponed. The accountant’s answer should be: A. No, the return must be filed by September 15. B. Yes, we can request an extension until October 15. C. Yes, we can request an extension until the following April 15. D. No, the return must be filed by October 15. 8. Which of the following entities may adopt any tax year end? A. C corporation B. S corporation C. Partnership D. Trust 9. Which of the following is an advantage of forming a limited liability company (LLC) as opposed to a partnership? A. The entity may avoid taxation B. There is no limit on the number of owners. C. The owner may participate in management while limiting personal liability. D. The entity may make disproportionate allocations and distributions to members. 10. A C corporation must use the accrual method of accounting in which of the following circumstances? A. The business had average sales for the past 3 years of less than $10 million. B. The business is a service company and has over $10 million in sales. C. The business is a personal service business with over $75 million in sales. D. The business has more than $50 million in average sales. 11. One of the elections a new corporation must make is its choice of an accounting period. Which of the following entities has the most flexibility in choosing an accounting period? A. C corporation B. S corporation C. Partnership D. Personal service corporation 12. The selection of an accounting method for tax purposes by a newly incorporated C corporation A. Is made on the initial tax return by using the chosen method B. Is made by filing a request for a private letter ruling from the IRS C. Must first be approved by the company’s board of directors D. Must be disclosed in the company’s organizing documents 13. Which of the following corporations would be taxed as a personal service corporation? A. A real estate brokerage B. A catering service C. An architecture and engineering firm D. A groundskeeping firm. We offer online tutoring, help with assignments and essay writing for all Majors with a guaranteed pass. For assistance Contact Tutor Lucas: