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AICPA CPA Regulation Sample Questions:

1. During 1993 Kay received interest income as follows:
On U.S. Treasury certificates $4,000
On refund of 1991 federal income tax 500
The total amount of interest subject to tax in Kay's 1993 tax return is:

A) $4,000
B) $4,500
C) $500
D) $0

2. Which one of the following will result in an accruable expense for an accrual-basis taxpayer?

A) A signed contract for repair work to be done and the work is to be completed at a later date.
B) A repair completed prior to year end and paid upon completion.
C) A repair completed prior to year end but not invoiced.
D) An invoice dated prior to year end but the repair completed after year end.

3. Freeman, a single individual, reported the following income in the current year:
Guaranteed payment from services rendered to a partnership $50,000
Ordinary income from a S corporation $20,000
What amount of Freeman's income is subject to self-employment tax?

A) $20,000
B) $0
C) $70,000
D) $50,000

4. Tom and Joan Moore, both CPAs, filed a joint 1994 federal income tax return showing $70,000 in taxable
income. During 1994, Tom's daughter Laura, age 16, resided with Tom. Laura had no income of her own
and was Tom's dependent.
Determine the amount of income or loss, if any that should be included on page one of the Moores' 1994
Form 1040.
Tom received $10,000, consisting of $5,000 each of principal and interest, when he redeemed a Series
EE savings bond in 1994. The bond was issued in his name in 1990 and the proceeds were used to pay
for Laura's college tuition. Tom had not elected to report the yearly increases in the value of the bond.

A) $2,500
B) $75,000
C) $1,250
D) $1,500
E) $3,000
F) $900
G) $2,000
H) $25,000
I) $500
J) $0
K) $10,000
L) $55,000
M) $50,000
N) $1,300
O) $1,000

5. Tom and Joan Moore, both CPAs, filed a joint 1994 federal income tax return showing $70,000 in taxable
income. During 1994, Tom's daughter Laura, age 16, resided with Tom. Laura had no income of her own
and was Tom's dependent.
Determine the amount of income or loss, if any that should be included on page one of the Moores' 1994
Form 1040.
The Moores received a $500 security deposit on their rental property in 1994. They are required to return
the amount to the tenant.

A) $2,500
B) $75,000
C) $1,250
D) $1,500
E) $3,000
F) $900
G) $2,000
H) $25,000
I) $500
J) $0
K) $10,000
L) $55,000
M) $50,000
N) $1,300
O) $1,000

Solutions: