QUARTERLY CPE EXAM ON THE

Size: px

Start display at page:

Download "QUARTERLY CPE EXAM ON THE"

Scot Williamson
6 years ago
Views:

1 Name (Print) Firm Address City/State/Zip Telephone (Day) Address Accounting Education Associates ( Worsham Place, Greensboro, NC Address: Phone: (800) CPE-Exam; Fax: (800) QUARTERLY CPE EXAM ON THE Journal of Accountancy Fourth Quarter (October - December), 2012 (Course # 1204) A Formal CPE Course using the JoA as Reference Material Recommended CPE Credit: 7 Hours (Exceptions noted on next page) Subject division: Tax 3; A/A 2; Computer Science 1; Finance 1. To which state board(s) or agencies do you report CPE? On my honor as a CPA or CMA, I have neither given nor received assistance on this Exam. (Signed) (Dated) INSTRUCTIONS: 1. Complete but do not submit all the Assignments in the Supplementary Study Packet with Course objectives available at our Web site: 2. Answer the 50 multiple-choice questions by selecting the one best answer. Blacken the letter; do not circle. A score of 70 or better is required. 3. If applicable, please submit a Payment Voucher with your completed Exam. 4. Scan/ , fax or snail mail your answer sheet to AEA for grading. 5. For CPE credit, please be sure your name and address above are legible. 6. For faster response, please provide your and fax information above. COURSE EVALUATION: On a scale of A (highest) to F (lowest), please evaluate the following: 1. The course met the objectives described in the promotional material? 2. Any stated prerequisites were necessary or desirable? 3. The course was timely and effective? 4. The course met your professional education needs? 5. The course materials were understandable and helpful? Please leave this space blank for your Certificate of Completion. We encourage you to scan and your answer sheet to info@accounting-education.com For CPE credit, this exam must be completed by 12/31/14. Copyright AEA Fax 1. =a= =b= =c= =d= =e= 2. =a= =b= =c= =d= =e= 3. =a= =b= =c= =d= =e= 4. =a= =b= =c= =d= =e= 5. =a= =b= =c= =d= =e= 6. =a= =b= =c= =d= =e= 7. =a= =b= =c= =d= =e= 8. =a= =b= =c= =d= =e= 9. =a= =b= =c= =d= =e= 10. =a= =b= =c= =d= =e= 11. =a= =b= =c= =d= =e= 12. =a= =b= =c= =d= =e= 13. =a= =b= =c= =d= =e= 14. =a= =b= =c= =d= =e= 15. =a= =b= =c= =d= =e= 16. =a= =b= =c= =d= =e= 17. =a= =b= =c= =d= =e= 18. =a= =b= =c= =d= =e= 19. =a= =b= =c= =d= =e= 20. =a= =b= =c= =d= =e= 21. =a= =b= =c= =d= =e= 22. =a= =b= =c= =d= =e= 23. =a= =b= =c= =d= =e= 24. =a= =b= =c= =d= =e= 25. =a= =b= =c= =d= =e= 26. =a= =b= =c= =d= =e= 27. =a= =b= =c= =d= =e= 28. =a= =b= =c= =d= =e= 29. =a= =b= =c= =d= =e= 30. =a= =b= =c= =d= =e= 31. =a= =b= =c= =d= =e= 32. =a= =b= =c= =d= =e= 33. =a= =b= =c= =d= =e= 34. =a= =b= =c= =d= =e= 35. =a= =b= =c= =d= =e= 36. =a= =b= =c= =d= =e= 37. =a= =b= =c= =d= =e= 38. =a= =b= =c= =d= =e= 39. =a= =b= =c= =d= =e= 40. =a= =b= =c= =d= =e= 41. =a= =b= =c= =d= =e= 42. =a= =b= =c= =d= =e= 43. =a= =b= =c= =d= =e= 44. =a= =b= =c= =d= =e= 45. =a= =b= =c= =d= =e= 46. =a= =b= =c= =d= =e= 47. =a= =b= =c= =d= =e= 48. =a= =b= =c= =d= =e= 49. =a= =b= =c= =d= =e= 50. =a= =b= =c= =d= =e= Date completed: D.

2 This is a formal self-study CPE course using the Journal of Accountancy as reference material designed to keep you abreast of the latest changes affecting our profession. Our course consists of a Supplementary Study Packet (available at our Web site: and this Final Exam; it is divided into sections, each corresponding to selected articles appearing in the JoA. This series of quarterly formal self-study programs that can be completed in your home or office without the inconvenience and high costs associated with many CPE courses. New courses normally appear at our Web site around the beginning of each quarter. LEARNING OBJECTIVES: The specific learning objectives are stated in the individual sections of the Supplementary Study Packet at our Web site. PREREQUISITES: None. LEVEL: Basic. COURSE NUMBER: The course number we assign to each Quarterly CPE Exam is derived from the Year and Quarter, YYQQ; e. g., the course number for 2012 s Fourth Quarter Exam is COURSE SPONSOR: Accounting Education Associates ( AEA ) has offered Quarterly CPE Exams on the Journal of Accountancy every quarter since James H. Ogburn prepares the courses. In addition to working in public accounting and finance, his experience includes 18 years teaching accounting at the University of North Carolina at Greensboro, as well as serving as Assistant Director of Graduate Programs in Accounting and Business, and 31 years of experience in developing CPE courses for CPAs. AEA is not affiliated with the AICPA that holds the copyright to the Journal of Accountancy Scan/ , fax or mail your answer sheets to us. HOW TO CONTACT AEA: info@accounting-education.com ESTIMATED COMPLETION TIME: The estimated average completion time to read three monthly journal issues and to complete our Supplementary Study Packet and Quarterly CPE Exam on the Journal of Accountancy is 14 hours. These estimates are based on pilot-tests and 50-minute hours, and it is possible that the numbers could vary from quarter to quarter. RECOMMENDED CPE CREDIT: We recommend CPE credit of seven (7) hours, one-half of the estimated completion time of 14 hours based on pilot-tests. Exceptions: A few state boards may grant CPE credit of 100% of estimated completion time for formal self-study courses (i.e., 14 hours for each Exam on the Journal of Accountancy); check with your own state board's rules for guidance. Because the completion times could vary (based on pilot tests each quarter), the recommended CPE credit is subject to change from quarter to quarter. Please check with your state board for further guidance. SUBJECT DIVISIONS OF CPE CREDIT: The following subject division (for the seven hours of recommended CPE credit): Accounting/Auditing 2; Tax 3; Computer Science 1; Finance 1. (NASBA Subject areas). This division applies to this quarter only and is likely to vary from quarter to quarter. PROGRAM SPONSOR AGREEMENTS: AEA has sponsor agreements with the following state boards: AL, HI (94007), IL ( ), IN (CE ), KY, OH (CPE.20), PA (PX00005-L), and TX (000211). AEA s courses are accepted by many but not all state boards of accountancy. We do not have a sponsor agreement with the CFP Board, the IRS, NASBA or QAS. PRICES: The price of a Quarterly CPE Exam is $39, with lower prices when an order involves four or more courses: Price per course for orders of 1 to 3 courses: $39 Price per course for orders of 4 to 7 courses: $36 Price per course for orders of 8 to 23 courses: $33 Price per course for orders of 24 or more: $30 Telephone: CPE-EXAM ( ) Fax: Mail: 1809 Worsham Place Greensboro, NC For faster response, please provide your and fax information on your answer sheet. You may scan and your answer sheet to us at: info@accounting-education.com Checks, Visa, and MasterCard are accepted as payment. REFERRAL INCENTIVE PROGRAM - WE LL PAY YOU FOR REFERRING NEW QUALIFYING CUSTOMERS: Receive $10 for each new customer you refer to us. For every new qualifying customer who pays for an exam and mentions your name, we ll send you a check for $10. It s as simple as that. We welcome any questions by either phone or . *Please notify AEA of changes to your mailing address.*

3 Payment Voucher: Please complete and submit this form with your downloaded Exam(s). Accounting Education Associates 1809 Worsham Place Greensboro, NC Phone: (800) (CPE-Exam) Fax: (800) (For ing scanned order form or answer sheets) Name Firm (If part of address) Address City/State/Zip Phone Fax To which state board(s) do you report CPE? Source of referral if applicable: I am submitting completed Exams on the JoA that I ve downloaded from (We no longer accept orders for unpublished exams or subscriptions.) Quantity Year(s) First Quarter (J-M), 20 Second Quarter (A-J), 20 Third Quarter (J-S), 20 Fourth Quarter (O-D), 20 First Quarter (J-M), 20 Second Quarter (A-J), 20 Third Quarter (J-S), 20 Fourth Quarter (O-D), 20 Total Quantity times Unit price of $ = $ Total charge Unit price depends on total number of Exams: 1 3 Exams: $ Exams $ Exams: $36 24 and over: $30 Paid by: Check I m mailing today, Visa or MC. (Checks are preferred. Amex cards are not accepted.) Card # Exp date / Local (street or PO box) address printed on your credit card bill if different from your address above. and 5-digit zip code Please estimate the time you spent completing this course. Thank you for your order.

4 The Learning Objectives for this course are stated in the Study Packet at Sections I VII and Exam Questions 1 18 Relate to the Journal of Accountancy of October Section I. Plan Now for Inside Buyouts (Page 26) 1. A buyout in the form of a(n) purchase generally results in stepped-up basis to the buyer. a. Asset b. Stock c. Both a and b d. Neither a nor b 2. As a result of a stepped-up basis, the buyer: a. Recognizes less gain on any eventual sale of the assets. b. Recognizes depreciation and amortization while owning the assets. 3. Under a Sec. 338(h)(10) election: a. The buyer purchases the stock of the seller. b. The transaction is treated as an asset sale. c. The buyer gets a step-up in basis for the assets purchased. 4. The most tax-efficient structure for the seller of a business is typically a(n) sale. a. Asset b. Stock 5. ESOPs are probably not suitable for: a. Manufacturing companies. b. Exporters. c. Service companies. d. Companies without consistent and predictable cash flows. e. Highly-leveraged companies. Section II. Choose Wisely New Brochures Can Help CPAs Vet Investment Advisers. (Page 32) 6. Investment advisers must disclose all of the following except: a. Business practices. b. Conflicts of interest. c. Background information. d. Exact percentage of markup or markdown of securities. 7. Most major broker-dealers such as Morgan Stanley and Merrill Lynch are regulated under: a. The Securities and Exchange Act of b. The Investment Advisers Act of Under current regulations, large Wall street firms are considered fiduciaries when acting as: a. Broker-dealers. b. Investment advisers. c. Either a or b. 9. Which of the following are subject only to the standard of suitability relates to: a. Firms governed by the Investment Advisers Act. b. Broker-dealers and their registered representatives under the 1934 Act.

5 REFERRAL INCENTIVE PROGRAM - WE LL PAY YOU FOR REFERRING NEW QUALIFYING CUSTOMERS: Receive $10 for each new customer you refer to us. For every new qualifying customer who pays for an exam and mentions your name, we ll send you a check for $10. It s as simple as that. We welcome any questions by either phone or . Section III. Restorative Benefits and Equity-Based Performance Plans for Highly Compensated Executives (P. 50) 10. Employee pretax contributions to are limited by IRS annual caps. a. Qualified retirement plans b. Nonqualified deferred compensation (NQDC) arrangements c. Both a and b d. Neither a nor b 11. Under an elective NQDC: a. Participants' contributions to the plan reduce their current taxable incomes. b. The earnings on the accounts grow on a tax-deferred basis. 12. Which of the following statements is / are true of a NQDC? a. NQDC plans must be properly documented. b. The company can make greater matching and nonelective contributions than under qualified plans. c. The plan design can generally be discriminatory. 13. Supplemental executive retirement plans (SERPs) are funded by contributions. a. Employer b. Employee c. Both a and b d. Neither a nor b 14. Carve-out benefit plans can be: a. Equity-based. b. Nonequity-based. c. Either a or b. Section IV. IRS's Fresh Start Program Expands Payment Options (Page 56) 15. Which of the following taxpayers may be eligible for the IRS's Fresh Start program? a. A taxpayer who owes $25,000 in federal taxes. b. A taxpayer who owes $50,000 in federal taxes. c. A taxpayer who owes $75,000 in federal taxes. d. All of the above. 16. To qualify for an installment agreement, a taxpayer must be up-to-date with: a. Current year tax obligations. b. All required tax return filings. 17. A taxpayer who cannot pay the income tax of $50,000 due as shown on Form 1040 but who can pay the entire amount within 120 days of the due date should: a. File Form 9465-FS. b. File Form c. Call the IRS at (800) or apply online to request the option to pay in full. d. None of the above.

6 18. A taxpayer who timely files the federal return and meets all of the requirements of the installment agreement will avoid: a. The failure-to-file penalty. b. Interest. c. The late payment penalty. REFERRAL INCENTIVE PROGRAM - WE LL PAY YOU FOR REFERRING NEW QUALIFYING CUSTOMERS: Receive $10 for each new customer you refer to us. For every new qualifying customer who pays for an exam and mentions your name, we ll send you a check for $10. It s as simple as that. We welcome any questions by either phone or . Sections V VIII and Exam Questions Relate to the Journal of Accountancy of November Section V. Back to Basics: Proposed Framework for SMEs Geared for Reliability and Simplicity (Page 32) 19. The proposed Financial Reporting Framework relates to enterprises. a. Small-sized d. A, b and c b. Medium-sized e. A and b but not c c. Large-sized 20. The goals of the proposed Financial Reporting Framework moving toward fair value accounting. a. Include b. Do not include 21. The proposed Financial Reporting Framework requires that companies carrying goodwill on their balance sheets: a. Amortize goodwill over the same period as required for income taxes, or ten years if not amortized for federal income tax purposes. b. Make an annual assessment of goodwill impairment and make any required accounting entries. 22. The proposed Financial Reporting Framework require consolidation of variable-interest entities into companies' financial statements. a. Would b. Would not 23. The proposed Financial Reporting Framework requires: a. Derivative accounting for interest rate swaps. b. Reporting comprehensive income. Section VI. Applying the Principles: COSO Proposal Relates Framework to External Financial Reporting (Page 36) 24. The proposed Internal Control Over External Financial Reporting: Compendium of Approaches and Examples applies to all of the following except: a. Public company financial statements. b. Financial reports prepared by private companies for their banks and lenders. c. Reports that not-for-profits prepare for potential donors. d. Financial reporting that governmental entities may provide to the public or oversight agencies. e. Financial reports prepared by private companies for labor negotiations. 25. Which component of internal control did the COSO proposal recommend changing? a. Risk assessment. d. Information and communication. b. Control activities. e. None of the above. c. Monitoring activities. 26. Principle 3 of the COSO framework states that establish(es) reporting lines and appropriate authorities and responsibilities in pursuit of objectives. a. Shareholders d. COSO b. Management e. PBAOB c. The Board of Directors

7 27. Principle 7 of the COSO framework states that the organization should: a. Identify risks to the achievement of its objectives across the entity. b. Analyze risks as a basis for determining how the risks should be managed. Section VII. Windows 8: Jump or Wait? (Page 40) 28. The Windows 8 Modern user interface responds to: a. Finger gestures on a touchscreen-enabled monitor. b. Mouse clicks and keyboard commands. c. Either a or b. 29. The Charm Bar appears when you: a. Mouse over the top-right or bottom-right corners of the screen. b. Press the Windows Key+C. c. On a touchscreen, swipe in from the right side of the screen. d. A, b or c. e. A or b but not c. 30. Which of the following Charm Bar tools enables you to documents from current applications such as Word or Excel? a. Search. b. Share. c. Start. d. Devices. e. Settings. 31. Users of can upgrade to Windows 8. a. Windows 7 d. A, b or c b. Windows XP e. A or b but not c c. Vista 32. Which of the following are among the new features of Windows 8? a. Longer battery life. b. Improved security. c. Ease of later reverting to previous operating system after upgrading to Windows 8. Section XIII. Schedule UTP: The Early Returns Are In (Page 54) 33. For the 2012 and 2013 tax years, the asset threshold for filing Schedule UTP is $ million. a. 100 b.75 c. 50 d. 25 e Schedule UTP requires all of the following for each tax position except: a. The relevant primary Code sections. b. Whether the expected tax effect is temporary, permanent, or both. c. A concise description of the uncertain tax position. d. For multiple reported tax positions, their relative ranking in size. e. An assessment of the horizons of a tax position. 35. A majority of 2010 tax returns that included a Schedule UTP were large enough to: a. Receive a coordinated team examination through the Large Business and International Division. b. Meet the initial Schedule UTP filing threshold. 36. Significant changes that took effect for the 2011 tax year relating to Schedule UTP, Uncertain Tax Position Statements include: a. Filing requirements for taxpayers who change consolidated groups. b. The treatment of reserves affected by changed circumstances. c. The disclosure of interest and penalties related to uncertain tax positions.

8 REFERRAL INCENTIVE PROGRAM - WE LL PAY YOU FOR REFERRING NEW QUALIFYING CUSTOMERS: Receive $10 for each new customer you refer to us. For every new qualifying customer who pays for an exam and mentions your name, we ll send you a check for $10. It s as simple as that. We welcome any questions by either phone or . Sections IX XII and Exam Questions Relate to the Journal of Accountancy of December Section IX MAP Survey: Signs of Recovery (P. 26) 37. Which of the following three years' surveys showed the highest growth rate in client-fee billings? a b c Partner compensation associated with CPA firms with revenues was higher in 2012 than a. Less than $200,000 b. Between $200,000 and $500,000 c. Between $500,000 and $750,000 d. A, b or c e. A or b but not c 39. Which group's compensation showed the greatest decline in the 2012 survey? a. Directors. d. Associates. b. Senior managers. e. New professionals. c. Managers. 40. There was an increase in 2012 from 2010 in the percentage of CPA firms offering: a. Vacation days. b. Health insurance. c. Paid time off for activities such as professional training. Section X. A Quest for Relevance (P. 32) 41. The proposed special-purpose framework calls for the use of: a. Historical cost. b. The accrual basis. 42. The proposed Financial Reporting Framework for Small- and Medium-Sized Entities: a. Increases the use of fair value accounting. b. Should offer reporting entities increased optionality. 43. The proposal is directed at entities that required to issue financial statements prepared in accordance with generally accepted accounting principles. a. Are not b. Are Section XI. Impairment Testing: Effectively Using the Qualitative Assessment (Page 36) 44. Recent Accounting Standards Updates changed the quantitative tests for impairment. a. Goodwill c. Both a and b b. Indefinite-lived intangible asset d. Neither a nor b 45. Recent Accounting Standards Updates require that entities carrying goodwill or indefinite-lived intangible assets must perform quantitative tests at least once every years. a. Two b. Three c. Four d. Five e. None of the above 46. If an entity concludes from its qualitative assessment that it is more likely than not that the fair value of a reporting unit is than its carrying value, the entity is required to perform Step 1 of the quantitative test. a. More b. Less c. Either a or b 47. Recent Accounting Standards Updates reporting entities to repurpose valuations done for other reasons to comply with Step 1 of the goodwill impairment testing model. a. Permits b. Does not permit

9 Section XII. Year-End Tax Planning: Preparing for the Tax Cliff (P. 49) (To ensure timeliness of course content beyond year-end 2012, the following Exam questions focus on post-2012 taxes.) 48. Flowthrough business income from S corporations is subject to: a. The 3.8% Medicare surtax on net investment income. b. The 0.9% Medicare surtax on earned income. 49. Distributions from traditional IRAs are: a. Subject to the 3.8% medicare surcharge. b. Included in modified adjusted gross income. 50. Classifying a rental building used in a related active trade or business can be classified as a nonpassive activity (under Regs. Sec ) can result in avoiding the Medicare surtax. a. 3.8% c. Both a and b b. 0.9% d. Neither a nor b You may , fax or mail your answer sheet to AEA. Our address: info@accounting-education.com Thank you for your business and referrals. REFERRAL INCENTIVE PROGRAM - WE LL PAY YOU FOR REFERRING NEW QUALIFYING CUSTOMERS: Receive $10 for each new customer you refer to us. For every new qualifying customer who pays for an exam and mentions your name, we ll send you a check for $10. It s as simple as that. We welcome any questions by either phone or .

QUARTERLY CPE EXAM ON THE

QUARTERLY CPE EXAM ON THE Accounting Education Associates (www.accounting-education.com) 1809 Worsham Place, Greensboro, NC 27408-3113 Email Address: info@accounting-education.com Phone: (800) CPE-Exam; Fax: (800) 645-1099 QUARTERLY