IRS ENROLLED AGENT UNIT 2024
2 TEST
ANSWER ALL QUESTIONS IN THIS SECTION
QUESTION 1
Ray operates a retail clothing store using the accrual method and reports Income
on schedule C, Net Profit or
Loss from Business. He also runs a lawn care service that he operates only in the
summer months. Which of the
following statements is correct?
A. The lawn care business is required to use the accrual method of accounting
because Ray has already elected
this method for his other business, and all businesses operated by one individual
must use the same method of
accounting.
B. The lawn care business may use either the cash or accrual method, so long as
both businesses have separate
and distinct records.
C. Ray may keep one set of records for the two businesses and use different
methods of accounting for them.
D. Ray must combine the income for both businesses and keep one set of record
books for both. - ANSWERS-B
END OF
PAGE 1
, IRS ENROLLED AGENT UNIT 2024
2 TEST
QUESTION 2
Ben owns a jewelry store. All of the following transactions are examples of
constructive receipt of income in
2016 except:
A. Ben receives a check payment in his mailbox on December 31, 2016, but does
not pick up the check from the
mailbox and deposit the check in the bank until January 2, 2017.
B. Ben receives a direct deposit of funds to his bank account on December 15,
2016, but does not withdraw any
of the funds until March 2017.
C. Ben receives a signed IOU from a delinquent account in November 2016. He
receives payment on this account
on Jar .iary 10, 2017.
D. An escrow agent receives a payment on Ben's behalf that is restricted for his
use. It 1s an advance payment for a custom ring, but he cannot access any of the
funds until the ring is delivered and inspected by the buyer on December 28, 2016,
the ring is delivered and the restriction is lifted. Ben picks up the cash on January
9, 2017. - ANSWERS-C
END OF
PAGE 2
2 TEST
ANSWER ALL QUESTIONS IN THIS SECTION
QUESTION 1
Ray operates a retail clothing store using the accrual method and reports Income
on schedule C, Net Profit or
Loss from Business. He also runs a lawn care service that he operates only in the
summer months. Which of the
following statements is correct?
A. The lawn care business is required to use the accrual method of accounting
because Ray has already elected
this method for his other business, and all businesses operated by one individual
must use the same method of
accounting.
B. The lawn care business may use either the cash or accrual method, so long as
both businesses have separate
and distinct records.
C. Ray may keep one set of records for the two businesses and use different
methods of accounting for them.
D. Ray must combine the income for both businesses and keep one set of record
books for both. - ANSWERS-B
END OF
PAGE 1
, IRS ENROLLED AGENT UNIT 2024
2 TEST
QUESTION 2
Ben owns a jewelry store. All of the following transactions are examples of
constructive receipt of income in
2016 except:
A. Ben receives a check payment in his mailbox on December 31, 2016, but does
not pick up the check from the
mailbox and deposit the check in the bank until January 2, 2017.
B. Ben receives a direct deposit of funds to his bank account on December 15,
2016, but does not withdraw any
of the funds until March 2017.
C. Ben receives a signed IOU from a delinquent account in November 2016. He
receives payment on this account
on Jar .iary 10, 2017.
D. An escrow agent receives a payment on Ben's behalf that is restricted for his
use. It 1s an advance payment for a custom ring, but he cannot access any of the
funds until the ring is delivered and inspected by the buyer on December 28, 2016,
the ring is delivered and the restriction is lifted. Ben picks up the cash on January
9, 2017. - ANSWERS-C
END OF
PAGE 2
