CDFA Exam Study Materials; Questions with Complete
Solutions 100% Verified
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.
, CDFA Exam Study Materials; Questions with Complete
Solutions 100% Verified
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.
, CDFA Exam Study Materials; Questions with Complete
Solutions 100% Verified
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.
, CDFA Exam Study Materials; Questions with Complete
Solutions 100% Verified
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.
Solutions 100% Verified
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.
, CDFA Exam Study Materials; Questions with Complete
Solutions 100% Verified
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.
, CDFA Exam Study Materials; Questions with Complete
Solutions 100% Verified
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.
, CDFA Exam Study Materials; Questions with Complete
Solutions 100% Verified
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.
