Common stock has a _____ balance and is a/an _____ to the Corporation.
(A)debit; liability
(B)credit; liability
(C)debit; asset
(D)credit; asset
(E)credit; equity
A corporation’s penalty for underpaying federal estimated taxes is
(A)Not deductible. (B)Fully deductible in the year paid. (C)Fully deductible if reasonable cause can be established for the underpayment. (D)Partially deductible.
Correct Answer: A
Which one of the following would constitute a highly inflationary economy when determining the functional currency of a foreign entity?
(A)20% inflation for each of the past 5 years. (B)30% inflation for each of the past 3 years. (C)35% inflation for each of the past 3 years. (D)20%, 35%, and 40% inflation, respectively, for each of the past 3 years.
Correct Answer: C
In the statement of owner’s equity, owner’s equity or capital is calculated using: Mark one answer:
(A)Gross income (B)The positive or negative cash flow figure from the statement of cash flows (C)Assets (D)Total income from operating activities (E)Net income
Correct Answer: E
More CPA Exam Questions
- 1One purpose of GAAP is to provide _____ between accounting periods.
- 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:
- 3The General Fund pays an invoice for telecommunications that includes charges owed by the Water Utility Enterprise Fund. The Enterprise Fund subsequently remits its share of the telecommunications charges to the General Fund. The General Fund records the amount received from the Enterprise Fund as:
- 4Which one of the following would constitute a highly inflationary economy when determining the functional currency of a foreign entity?
- 5According to COSO, which of the following components addresses the need to respond in an organized manner to significant changes resulting from international exposure, acquisitions, or executive transitions?