Enrolled Agent (EA) Special Enrollment
Examination – Part 2 (AGACNP-C)
2026–2027 | Comprehensive Question
Practice Test with Answers & Rationales|
Free Pdf Access
1. A sole proprietorship reports its business income on:
A. Schedule C (Form 1040)
B. Form 1120
C. Form 1065
D. Form 1120-S
Correct Answer: A
Rationale: Sole proprietors report business income and expenses on Schedule C, which is
filed with Form 1040.
2. Which business entity is generally a pass-through entity?
A. Partnership
B. C Corporation
C. Personal Service Corporation
D. Public Corporation
Correct Answer: A
Rationale: Partnerships generally do not pay income tax; income passes through to the
partners.
,3. A partnership files which federal income tax return?
A. Form 1065
B. Form 1040
C. Form 1120
D. Form 941
Correct Answer: A
Rationale: Form 1065 is the U.S. Return of Partnership Income.
4. Which form reports each partner's share of partnership income?
A. Schedule K-1
B. Schedule C
C. Form W-2
D. Form 1099-NEC
Correct Answer: A
Rationale: Schedule K-1 reports each partner's distributive share of income, deductions,
and credits.
5. An S corporation generally files:
A. Form 1120-S
B. Form 1120
C. Form 1041
D. Form 990
Correct Answer: A
Rationale: Form 1120-S is the federal income tax return for S corporations.
6. A C corporation is generally subject to:
A. Corporate income tax
B. Self-employment tax
, C. Estate tax only
D. Partnership tax treatment
Correct Answer: A
Rationale: C corporations are separate taxable entities that pay corporate income tax.
7. Corporate distributions from earnings and profits are generally treated as:
A. Dividends
B. Wages
C. Capital contributions
D. Business expenses
Correct Answer: A
Rationale: Distributions from current or accumulated earnings and profits are generally
taxable dividends.
8. Which entity may experience double taxation?
A. C Corporation
B. Sole Proprietorship
C. Partnership
D. S Corporation
Correct Answer: A
Rationale: Corporate income is taxed at the corporate level and dividends may be taxed
again to shareholders.
9. The due date for a calendar-year C corporation return is generally:
A. April 15
B. March 15
C. January 31
D. December 31
Correct Answer: A
Examination – Part 2 (AGACNP-C)
2026–2027 | Comprehensive Question
Practice Test with Answers & Rationales|
Free Pdf Access
1. A sole proprietorship reports its business income on:
A. Schedule C (Form 1040)
B. Form 1120
C. Form 1065
D. Form 1120-S
Correct Answer: A
Rationale: Sole proprietors report business income and expenses on Schedule C, which is
filed with Form 1040.
2. Which business entity is generally a pass-through entity?
A. Partnership
B. C Corporation
C. Personal Service Corporation
D. Public Corporation
Correct Answer: A
Rationale: Partnerships generally do not pay income tax; income passes through to the
partners.
,3. A partnership files which federal income tax return?
A. Form 1065
B. Form 1040
C. Form 1120
D. Form 941
Correct Answer: A
Rationale: Form 1065 is the U.S. Return of Partnership Income.
4. Which form reports each partner's share of partnership income?
A. Schedule K-1
B. Schedule C
C. Form W-2
D. Form 1099-NEC
Correct Answer: A
Rationale: Schedule K-1 reports each partner's distributive share of income, deductions,
and credits.
5. An S corporation generally files:
A. Form 1120-S
B. Form 1120
C. Form 1041
D. Form 990
Correct Answer: A
Rationale: Form 1120-S is the federal income tax return for S corporations.
6. A C corporation is generally subject to:
A. Corporate income tax
B. Self-employment tax
, C. Estate tax only
D. Partnership tax treatment
Correct Answer: A
Rationale: C corporations are separate taxable entities that pay corporate income tax.
7. Corporate distributions from earnings and profits are generally treated as:
A. Dividends
B. Wages
C. Capital contributions
D. Business expenses
Correct Answer: A
Rationale: Distributions from current or accumulated earnings and profits are generally
taxable dividends.
8. Which entity may experience double taxation?
A. C Corporation
B. Sole Proprietorship
C. Partnership
D. S Corporation
Correct Answer: A
Rationale: Corporate income is taxed at the corporate level and dividends may be taxed
again to shareholders.
9. The due date for a calendar-year C corporation return is generally:
A. April 15
B. March 15
C. January 31
D. December 31
Correct Answer: A
