If an exempt organization is a corporation, the tax on unrelated business taxable income is
(A)Computed at corporate income tax rates.
(B)Computed at rates applicable to trusts.
(C)Credited against the tax on recognized capital gains.
When capital is increased in the double-entry method of accounting, the result is: Mark one answer:
(A)A credit (B)A debit (C)It is dependent on the situation (D)There is not enough information to determine the answer. (E)None of the above
Correct Answer: A
GAAP refers to: Mark one answer:
(A)General accounting assistance program (B)Generally accepted accounting principles (C)Generally acceptable account procedures (D)The theory that accounting and the general public look at financial statements differently
Correct Answer: B
Jenny's Bakery recently delivered a bad batch of cakes to a local restaurant. Jenny quickly refunded the cost of the cakes to the restaurant. Her accountant made a _____ to her Refunds of Sales account for this transaction:
(A)note (B)debit (C)credit (D)cost adjustment (E)deposit
Correct Answer: B
More CPA Exam Questions
- 1If equipment is used by a corporation in its operations and is sold at a loss, under which section on the statement of cash flows is this reported? Mark one answer:
- 2Larry, who uses the accrual basis of accounting, hired an extra driver to help him make deliveries in December. The extra driver only works from December 1st through the 31st . Larry pays the driver on January 5th, but the expense is shown on the December income statement. Why? Mark one answer:
- 3Nala Inc. reported deferred tax assets and deferred tax liabilities at the end of 20X4 and at the end of 20X5. Acording to FASB 109, for the year ended 20X5, Nala should report deferred income tax expense or benefit equal to the
- 4Jim's Jeans decided to shut down their Jimmy Jean Division. Where on the income statement would this closing be addressed? Mark one answer:
- 5Which of the following is subtracted from net sales to determine gross profit?