CDFA UPDATED Exam Questions and
CORRECT Answers
5-year cliff vesting - CORRECT ANSWER- An employee who has at least five years of
service must have a non-forfeitable right to 100% of the employee's accrued benefit [IRC
§411(a)(2)(A)].
3- to 7-year vesting (7-year graded vesting) - CORRECT ANSWER- An employee who has
completed at least three years of service must have a non-forfeitable right to at least the
following percentages of his or her accrued benefit: 20% after three years of service, 40%
after four years of service, 60% after five years of service, 80% after six years of service, and
100% after seven years of service [IRC §411(a)(2)(B)].
Top-heavy plans or matching contributions typically use _________ vesting - CORRECT
ANSWER- 3-year cliff vesting or 6-year graded vesting.
Schedule A: Itemized Deductions - CORRECT ANSWER- Schedule ____ may help identify
unlisted assets or sources of income. For example, property taxes may reveal real property or
a boat that one spouse does not know exists; and gambling losses would reveal that there are
gambling winnings.
Schedule B: Interest and Ordinary Dividends - CORRECT ANSWER- Schedule ____
identifies the assets and investments generating interest and dividends.
Schedule C: Profit or Loss from Business - CORRECT ANSWER- Schedule ___ may be a
place to hide assets or income. For example, depreciation expense is not a cash outflow and
should sometimes be added back to net income to determine actual income. The depreciation
schedule may also reveal additional assets in the business.
Schedule D: Capital Gains and Losses - CORRECT ANSWER- Schedule _______ is used to
report gains and losses from the sale of stocks, bonds, and real estate.
Schedule E: Supplemental Income and Loss - CORRECT ANSWER- Schedule _____ is used
to report income from rental properties, royalties, partnerships, and S-corporation income.
Depreciation would be something to review.
,Form 1065 - CORRECT ANSWER- Form _________ is used to report partnership income.
Form 1120 - CORRECT ANSWER- Form __________ is used to report corporate income
Form 1120S - CORRECT ANSWER- Form ___________ is used to report corporate income
for S corporations.
Schedule 1: Additional Income and Adjustments to Income - CORRECT ANSWER-
Schedule ____________________ includes additional income, such as capital gains,
unemployment compensation, prize or award money, and gambling winnings. It also includes
deductions such as student loan interest, self-employment tax, and educator expenses.
Schedule 2 Tax - CORRECT ANSWER- Schedule _________ details the alternative
minimum tax (ATM) or an excess advance premium tax credit repayment.
Schedule 3 Nonrefundable Credits - CORRECT ANSWER- Schedule _________ is used to
claim a nonrefundable credit other than the child tax credit or the credit for other dependents,
such as the foreign tax credit, education credits, or general business credit.
Schedule 4 Other Taxes - CORRECT ANSWER- Schedule ___________ reports other taxes,
such as self-employment tax, household employment taxes, additional tax on IRAs or other
qualified retirement plans and tax-favored accounts.
Schedule 5: Other Payments and Refundable Credits - CORRECT ANSWER- Schedule
_________ is used to claim a refundable credit other than the earned income credit, American
opportunity credit, or additional child tax credit.
Form 4562 - CORRECT ANSWER- Form _________ reports deductions for depreciation
and amortization as well as provides information on the business/investment use of
automobiles and other listed property.
Form 4797 - CORRECT ANSWER- Form ___________ reports the sale or exchange of
business property and the computation of recapture amounts under sections 179 and
280F(b)(2).
, Accountant - CORRECT ANSWER- An __________________ is a person who is qualified
to keep, audit, and inspect the financial records of individuals or business concerns and
prepares financial and tax reports.
Actuary - CORRECT ANSWER- An ___________ is a person whose work is to calculate
statistically risks, premiums, and life expectancies for insurance and pension plans.
Attorney - CORRECT ANSWER- An ________________ person who is legally qualified
and licensed to represent a person in a legal matter, such as a transaction or lawsuit.
Business Valuator - CORRECT ANSWER- A _________________ is an individual who is
trained in evaluating and assigning a value to a business.
Divorce - CORRECT ANSWER- A __________________ is the legal proceeding by which a
marriage is legally terminated. It may be contested (where one party denies the allegation or
wants to keep the marriage in place) or uncontested.
Mediator - CORRECT ANSWER- A _______________ is an individual who has been trained
to assist people in coming to an agreement, especially one that reconciles differences between
disputants.
Pension Valuator - CORRECT ANSWER- A ________________________ is an individual
who is qualified to calculate the value of defined benefit pension plans, such as the marital
portion of a plan for the division of assets in a divorce.
Arbitration - CORRECT ANSWER- _________________ is submitting a disputed matter for
decision to a person who is not a judge. The decision of an arbitrator is usually binding and
final. Arbitration varies greatly from mediation.
Best Interest of the Child - CORRECT ANSWER- _____________________________ is a
discretionary legal standard used by judges when making decisions about custody, visitation,
and support for a child when the parents are divorcing.
Change of Venue - CORRECT ANSWER- A ______________________ is a change of
judges or geographical location, requested by a party to the action who feels that the change
is justified by state law.
CORRECT Answers
5-year cliff vesting - CORRECT ANSWER- An employee who has at least five years of
service must have a non-forfeitable right to 100% of the employee's accrued benefit [IRC
§411(a)(2)(A)].
3- to 7-year vesting (7-year graded vesting) - CORRECT ANSWER- An employee who has
completed at least three years of service must have a non-forfeitable right to at least the
following percentages of his or her accrued benefit: 20% after three years of service, 40%
after four years of service, 60% after five years of service, 80% after six years of service, and
100% after seven years of service [IRC §411(a)(2)(B)].
Top-heavy plans or matching contributions typically use _________ vesting - CORRECT
ANSWER- 3-year cliff vesting or 6-year graded vesting.
Schedule A: Itemized Deductions - CORRECT ANSWER- Schedule ____ may help identify
unlisted assets or sources of income. For example, property taxes may reveal real property or
a boat that one spouse does not know exists; and gambling losses would reveal that there are
gambling winnings.
Schedule B: Interest and Ordinary Dividends - CORRECT ANSWER- Schedule ____
identifies the assets and investments generating interest and dividends.
Schedule C: Profit or Loss from Business - CORRECT ANSWER- Schedule ___ may be a
place to hide assets or income. For example, depreciation expense is not a cash outflow and
should sometimes be added back to net income to determine actual income. The depreciation
schedule may also reveal additional assets in the business.
Schedule D: Capital Gains and Losses - CORRECT ANSWER- Schedule _______ is used to
report gains and losses from the sale of stocks, bonds, and real estate.
Schedule E: Supplemental Income and Loss - CORRECT ANSWER- Schedule _____ is used
to report income from rental properties, royalties, partnerships, and S-corporation income.
Depreciation would be something to review.
,Form 1065 - CORRECT ANSWER- Form _________ is used to report partnership income.
Form 1120 - CORRECT ANSWER- Form __________ is used to report corporate income
Form 1120S - CORRECT ANSWER- Form ___________ is used to report corporate income
for S corporations.
Schedule 1: Additional Income and Adjustments to Income - CORRECT ANSWER-
Schedule ____________________ includes additional income, such as capital gains,
unemployment compensation, prize or award money, and gambling winnings. It also includes
deductions such as student loan interest, self-employment tax, and educator expenses.
Schedule 2 Tax - CORRECT ANSWER- Schedule _________ details the alternative
minimum tax (ATM) or an excess advance premium tax credit repayment.
Schedule 3 Nonrefundable Credits - CORRECT ANSWER- Schedule _________ is used to
claim a nonrefundable credit other than the child tax credit or the credit for other dependents,
such as the foreign tax credit, education credits, or general business credit.
Schedule 4 Other Taxes - CORRECT ANSWER- Schedule ___________ reports other taxes,
such as self-employment tax, household employment taxes, additional tax on IRAs or other
qualified retirement plans and tax-favored accounts.
Schedule 5: Other Payments and Refundable Credits - CORRECT ANSWER- Schedule
_________ is used to claim a refundable credit other than the earned income credit, American
opportunity credit, or additional child tax credit.
Form 4562 - CORRECT ANSWER- Form _________ reports deductions for depreciation
and amortization as well as provides information on the business/investment use of
automobiles and other listed property.
Form 4797 - CORRECT ANSWER- Form ___________ reports the sale or exchange of
business property and the computation of recapture amounts under sections 179 and
280F(b)(2).
, Accountant - CORRECT ANSWER- An __________________ is a person who is qualified
to keep, audit, and inspect the financial records of individuals or business concerns and
prepares financial and tax reports.
Actuary - CORRECT ANSWER- An ___________ is a person whose work is to calculate
statistically risks, premiums, and life expectancies for insurance and pension plans.
Attorney - CORRECT ANSWER- An ________________ person who is legally qualified
and licensed to represent a person in a legal matter, such as a transaction or lawsuit.
Business Valuator - CORRECT ANSWER- A _________________ is an individual who is
trained in evaluating and assigning a value to a business.
Divorce - CORRECT ANSWER- A __________________ is the legal proceeding by which a
marriage is legally terminated. It may be contested (where one party denies the allegation or
wants to keep the marriage in place) or uncontested.
Mediator - CORRECT ANSWER- A _______________ is an individual who has been trained
to assist people in coming to an agreement, especially one that reconciles differences between
disputants.
Pension Valuator - CORRECT ANSWER- A ________________________ is an individual
who is qualified to calculate the value of defined benefit pension plans, such as the marital
portion of a plan for the division of assets in a divorce.
Arbitration - CORRECT ANSWER- _________________ is submitting a disputed matter for
decision to a person who is not a judge. The decision of an arbitrator is usually binding and
final. Arbitration varies greatly from mediation.
Best Interest of the Child - CORRECT ANSWER- _____________________________ is a
discretionary legal standard used by judges when making decisions about custody, visitation,
and support for a child when the parents are divorcing.
Change of Venue - CORRECT ANSWER- A ______________________ is a change of
judges or geographical location, requested by a party to the action who feels that the change
is justified by state law.
