HRB FINAL EXAM | NEWEST ACTUAL
EXAM COMPLETE QUESTIONS AND
VERIFIED ANSWERS GRADED A+ | 100%
PASS | 2025 UPDATE!
What are the advantages of a traditional IRA? - ✔✔✔ Correct
Answer > "Contributions may be deductible from gross income.
Earnings are not
Who is eligible to establish a traditional IRA? - ✔✔✔ Correct Answer
> "Any taxpayer who has not reached age 70½ at the end of the year
and who
has received compensation during the tax year. This includes
selfemployed - ✔✔✔ Correct Answer >
taxpayers" - ✔✔✔ Correct Answer >
"What is the last date on which a contribution may be made and -
✔✔✔ Correct Answer >
,qualify as a contribution for a given year?" - ✔✔✔ Correct Answer >
The due date (not including extensions) of the return for that year
"What is the impact of a taxpayer being covered by an
employersponsored - ✔✔✔ Correct Answer >
What are the contribution limitations for a spousal IRA? - ✔✔✔
Correct Answer > "An eligible person may establish an IRA for their
spouse. The total
What income reporting form should an independent contractor
sometimes receive from the person who paid him for his services? -
✔✔✔ Correct Answer > Form 1099-MISC
"Schedule C, Line F asks for the accounting method used in the
business. - ✔✔✔ Correct Answer >
What is the difference between the cash method and the accrual
method of accounting?" - ✔✔✔ Correct Answer > "• Under the
accrual method, total sales and total charges for services are included
in income even though payment may be received in another tax year.
• Under the cash method, only income actually received or expenses
actually paid during the year are included. (15.5)" - ✔✔✔ Correct
Answer >
,What does it mean if a proprietor "materially participates" in the
business - ✔✔✔ Correct Answer > He is active in running the
business in a substantial way on a day-to-day basis.
Why is it important to know whether or not the proprietor materially
participates? - ✔✔✔ Correct Answer > If the proprietor does not
materially participate, any loss from the business is a passive loss and
generally may be currently deducted only against passive income.
What are returns and allowances? - ✔✔✔ Correct Answer > "•
Amounts that were refunded to customers who returned merchandise
for refund or partial refund.
• These amounts are subtracted from gross receipts." - ✔✔✔ Correct
Answer >
How is cost of goods sold determined? - ✔✔✔ Correct Answer >
Beginning inventory plus purchases, plus labor, supplies, depreciation,
etc. attributable to product manufacture or preparation for sale, minus
ending inventory.
If the client has contract labor, what should you remind the client that
they should do? - ✔✔✔ Correct Answer > • Provide a Form 1099-
MISC to any independent contractor who worked and earned $600 or
more.
, What is the purpose of self-employment tax? - ✔✔✔ Correct Answer
> To pay social security and medicare taxes
What amounts does a proprietor have "at risk"? - ✔✔✔ Correct
Answer > Amounts invested in the business plus any business debts for
which the proprietor is personally liable.
What difference does it make if the proprietor is "at risk" or not? -
✔✔✔ Correct Answer > Only amounts at risk may be used to
determine the actual loss on Schedule C.
How does a Tax Professional meet due diligence requirements? - ✔✔✔
Correct Answer > "• Tax Professionals fulfill due diligence
requirements by making every effort to prepare accurate and complete
returns.
• Tax Professionals must have knowledge of tax law, and apply a
reasonability check to the information provided by their clients." -
✔✔✔ Correct Answer >
Is there a time limit for filing amended returns? - ✔✔✔ Correct
Answer > "Yes.
EXAM COMPLETE QUESTIONS AND
VERIFIED ANSWERS GRADED A+ | 100%
PASS | 2025 UPDATE!
What are the advantages of a traditional IRA? - ✔✔✔ Correct
Answer > "Contributions may be deductible from gross income.
Earnings are not
Who is eligible to establish a traditional IRA? - ✔✔✔ Correct Answer
> "Any taxpayer who has not reached age 70½ at the end of the year
and who
has received compensation during the tax year. This includes
selfemployed - ✔✔✔ Correct Answer >
taxpayers" - ✔✔✔ Correct Answer >
"What is the last date on which a contribution may be made and -
✔✔✔ Correct Answer >
,qualify as a contribution for a given year?" - ✔✔✔ Correct Answer >
The due date (not including extensions) of the return for that year
"What is the impact of a taxpayer being covered by an
employersponsored - ✔✔✔ Correct Answer >
What are the contribution limitations for a spousal IRA? - ✔✔✔
Correct Answer > "An eligible person may establish an IRA for their
spouse. The total
What income reporting form should an independent contractor
sometimes receive from the person who paid him for his services? -
✔✔✔ Correct Answer > Form 1099-MISC
"Schedule C, Line F asks for the accounting method used in the
business. - ✔✔✔ Correct Answer >
What is the difference between the cash method and the accrual
method of accounting?" - ✔✔✔ Correct Answer > "• Under the
accrual method, total sales and total charges for services are included
in income even though payment may be received in another tax year.
• Under the cash method, only income actually received or expenses
actually paid during the year are included. (15.5)" - ✔✔✔ Correct
Answer >
,What does it mean if a proprietor "materially participates" in the
business - ✔✔✔ Correct Answer > He is active in running the
business in a substantial way on a day-to-day basis.
Why is it important to know whether or not the proprietor materially
participates? - ✔✔✔ Correct Answer > If the proprietor does not
materially participate, any loss from the business is a passive loss and
generally may be currently deducted only against passive income.
What are returns and allowances? - ✔✔✔ Correct Answer > "•
Amounts that were refunded to customers who returned merchandise
for refund or partial refund.
• These amounts are subtracted from gross receipts." - ✔✔✔ Correct
Answer >
How is cost of goods sold determined? - ✔✔✔ Correct Answer >
Beginning inventory plus purchases, plus labor, supplies, depreciation,
etc. attributable to product manufacture or preparation for sale, minus
ending inventory.
If the client has contract labor, what should you remind the client that
they should do? - ✔✔✔ Correct Answer > • Provide a Form 1099-
MISC to any independent contractor who worked and earned $600 or
more.
, What is the purpose of self-employment tax? - ✔✔✔ Correct Answer
> To pay social security and medicare taxes
What amounts does a proprietor have "at risk"? - ✔✔✔ Correct
Answer > Amounts invested in the business plus any business debts for
which the proprietor is personally liable.
What difference does it make if the proprietor is "at risk" or not? -
✔✔✔ Correct Answer > Only amounts at risk may be used to
determine the actual loss on Schedule C.
How does a Tax Professional meet due diligence requirements? - ✔✔✔
Correct Answer > "• Tax Professionals fulfill due diligence
requirements by making every effort to prepare accurate and complete
returns.
• Tax Professionals must have knowledge of tax law, and apply a
reasonability check to the information provided by their clients." -
✔✔✔ Correct Answer >
Is there a time limit for filing amended returns? - ✔✔✔ Correct
Answer > "Yes.
