QUESTION 1 Accounting year end issues may be described as follows:
a. The due date for a calendar year corporation return is April 15.
b. All corporations must utilize a calendar year end.
c. Corporations may never change year ends.
d. Personal Service Corporations are generally required to have calendar year ends.
QUESTION 2 The cash method of accounting:
a. May not be used by corporations who have inventories.
b. May not be used by corporations who have accrued retirement plan deductions.
c. May not be used by Personal Service Corporations.
d. Is not an acceptable method for income tax return reporting for corporations.
QUESTION 3 The accrual method of accounting is:
a. Dependent on the "Economic Performance Test" for accrual of expenses.
b. Dependent on the date an invoice is collected for the accrual of income.
c. More likely to be used than the cash method because of its inherent qualities. d. Dependent on the recurring item exception for accrual of income.
QUESTION 4 Corporations may not:
a. Make loans to related taxpayers.
b. Accrue and deduct expenses until they are paid to related taxpayers.
c. Expense items of commissions paid to related taxpayers. d. Have transactions with related taxpayers.
QUESTION 5 Related taxpayers include:
a. The fiduciary of a trust that owns 50% or more of a corporation.
b. Corporations with common ownership.
c. Individuals who own more than 50% of a corporation.
d. Partnerships who have any common ownership with the corporation.