AIPB EXAMINATION TEST 2026 COMPLETE QUESTIONS AND SOLUTIONS

AIPB EXAMINATION TEST 2026 COMPLETE
QUESTIONS AND SOLUTIONS



◉(True of False) If a company's year-end financial statements are to be
reviewed or audited by a CPA, the depreciation amount for the
statements is generally computed under GAAP rules. Answer: True


◉(True of False) Even if a company's tax and GAAP depreciation
expense are not materially different, a CPA conducting an audit will
require the company to use the amount computed under GAAP.
Answer: False


◉The adjusting entry to record $5,000 of depreciation expense in the
general ledger is: Answer: Depreciation Expense $5,000
Accumulated Depreciation Expense $5,000


◉Which of the following does not require using an independent CPA?


a. An audit of company financial statements
b. Preparation of the company tax return
c. A review of the company's financial statements

,d. An opinion on whether the financial statements materially conform to
GAAP rules. Answer: b. Preparation of the company tax return


◉If a company is required to have an audit of its financial statements,
then


a. GAAP depreciation must be the same as tax depreciation


b. If GAAP depreciation is materially different from the tax depreciation
the company must use the GAAP amount for its financial statements and
the tax amount for it tax return


c. GAAP depreciation must always be used for the company's financial
statements even if tax depreciation is not materially different


D. It does not matter whether the company uses GAAP or tax
depreciation Answer: b. If GAAP depreciation is materially different
from the tax depreciation the company must use the GAAP amount for
its financial statements and the tax amount for it tax return


◉The balance sheet account showing total depreciation expense taken to
date is called: Answer: Accumulated Depreciation


◉Depreciation __________________ the cost of an asset over its
estimated life. Answer: allocates (expenses)

,◉The purpose of depreciation is to _____________ the asset's cost to
the revenue that it helps the organization earn each year over its life.
Answer: match


◉(True of False) Annual depreciation expense is the amount of cash a
company sets aside to replace a plant or equipment asset. Answer:
False


◉(True or False) Depreciation expense computed under tax or GAAP
rules is usually not materially different Answer: False


◉(True or False) A company that wants a CPA to do a review of its
financial statements depreciates its plant and equipment assets under
GAAP for its federal income tax return. Answer: False


◉(True or False) Many of the concepts underlying tax depreciation rules
are similar to the concepts underlying GAAP depreciation rules
Answer: True


◉A company is required to have an independent CPA audit its year-end
financial statements if...


a. the company needs to file an income tax return

, b. The company must demonstrate that its financial statements conform
with GAAP


c. The company's stock is publicly traded


d. b and c Answer: d. b and c


◉Which of the following statements is true?


a. If depreciation expense under GAAP is not very different from
depreciation under federal income tax rules, the GAAP amount can be
used on the federal income tax return


b. If depreciation expense under federal income tax rules is not
materially different from depreciation expense under GAAP, the
company can use the tax amount on its financial statements and a CPA
reviewing the statements may not have to change this amount.


c. Both a and b are true. Answer: b. If depreciation expense under
federal income tax rules is not materially different from depreciation
expense under GAAP, the company can use the tax amount on its
financial statements and a CPA reviewing the statements may not have
to change this amount.