Reg Memorize Mixed - Missed More Than Once

Front 1

Under the "ULTRAMARES " rule , to which of the parties will an accountant be liable for NEGLIGENCE?

Back 1

ONLY PARTY IN PRIVITY

Front 2

Certification of a check is __________. Where a holder procures (gets) certification the drawer and ALL PRIOR ENDORSERS ARE discharged .

Back 2

ACCEPTANCE

Front 3

A CPA firm must do what before if can participate in the preparation of an audit report of a company registered with the SEC?

Back 3

register with the PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD - PCAOB

Front 4

A review of a client-prepared business plan and the preparation of information for obtaining financing are both appropriate as ____________ of a CPA

Back 4

CONSULTING SERVICES

Front 5

The general rule on priorities ( who has the wright to collect the debt first) is ___________

Back 5

FIRST TO FILE OF PERFECT - WINS

Front 6

A cash-base taxpayer should report income for the year in which it is either _______ or _______ received.
Income is ______ received in the taxable year during which it is credited to his account, set apart for him, or otherwise made available so that he may draw upon it at any time.

Back 6

ACTUALLY OR CONSTRUCTIVELY

CONSTRUCTIVELY

Front 7

The first estimated tax payment is due by the _______ following the close of the tax year. Other payments are due on the ________ of the fiscal year.

Back 7

15th day if the 4th month
6th, 9th, and 12th month

Front 8

What type of expenses are these?
1.Expenses of temporary directors
2. Fees paid to a state for incorporation
3. Accounting and legal fees incident to organization

Back 8

ORGANIZATIONAL EXPENSES - they are directly connected with the creation of the corp.
$5000 may be deducted in the taxable year in which the business begins if total expenses are less than $50,000; or reduce by amount that is above $50,000.

Front 9

Under Uniform Capitalization Rule, these costs MUST be included in inventory:
1. ________
2. ________
These costs are never capitalized to inventory : (4)

Back 9

1. ALL DIRECT COSTS
2. indirect cost - OFF-SITE STORAGE COSTS

SELLING, MARKETING, ADVERTISING, AND DISTRIBUTION EXP.

Front 10

Unless the IRS consents to a change of method, the ACCRUAL method of TAX reporting is mandatory for a sole proprietor when there are _________

Back 10

YEAR-END RETAIL TRADE MERCHANDISE INVENTORIES

Front 11

Under UCC, a Purchase Money Security Interest PMSI in noninventory take priority over all other competing securtiry interests in the same collateral if the PMSI is perfected by filing a financing statement properly within a _______ grace period.

Back 11

10-day

Front 12

3 things are required for "ATTACHMENT" to occur:

Back 12

1. The debtor must have signed a security agreement OR the goods must be in the possession of the creditor
2. The creditor must have given "value" to the debtor
3. The debtor must have rights in the collateral

Note - Security agreement relates to 'perfection' not 'attachment'

Front 13

If the seller is a MERCHANT, the risk of loss passes to the buyer when ______
If th seller is NOT A MERCHANT the risk of loss passes to the buyer when ______

Back 13

1 when the buyer actually RECEIVES THE GOODS
2. upon TENDER OF DELIVERY

Front 14

How to calculate MARCS depresication ?

Back 14

Value of the asset x 2/life of the asset x time of the convention/12
1st quarter =10.5
2nd quarter =7.5
3rd quarter = 4.5
4th quarter convention = 1.5

Front 15

The best way to remember the REAL defenses is with the acronym 'FAIDS' - must memorize 10 in all

Back 15

Forgery, Fraud in the execution,
Alteration, Adjudicated insanity,
Infancy, Illegality,
Duress, Discharge in bankruptcy,
Suretyship if status known, Statue of limitations

Front 16

The list of PERSONAL defenses (which are not good against an HDC ) is nearly endless, the most common on exam are

Back 16

UNAUTHORIZED COMPLETION - giving a party an instrument with the amout left blank. ( do not confuse with the material alteration)
2) FAILURE OF CONSIDERATION - did not pay

Front 17

Makers and acceptors take on __________ liability.
Drawers and endorsers take on __________ liability.

Back 17

primary - MAP
secondary

Front 18

To be a NEGOTIABLE INSTRUMENT within Article 3, the instrument must :
MEMORIZE 7

Back 18

1) be in writing
2) be signed by the maker or drawer
3) contain an unconditional promise (note) or order (draft) to pay
4) be for a fixed amount of $
5) be payable on demand or at a defined time
6) be payable to order or to bearer; with the exception of checks
7) contain no additional undertaking or instruction not authorized by the UCC

Front 19

Five transfer warranties on Negotiable instrument:

Back 19

1) the transferor is entitled to enforce the instrument ( good title) or is authorized to act for one who is entitle to enforce
2) All signatures are genuine or authorized
3) The instrument has not been materially altered
4) No defense of any party is good against the transferor
5) The transferor has no knowledge of any insolvency proceeding that has been instituted against the maker, acceptor , or drawer of an unaccepted instrument

Front 20

To become HDC
1) and 2)

Back 20

1) first become a holder, which requires proper NEGOTIATION
2) holder takes the paper :
a) For VALUE
b) in good FAITH
c) without notice of any defenses to or claims of ownership on the instrument

Front 21

Each endorsement has 3 qualities:
1Special or ________
2 Restrictive or _________
3 Qualified or _________

Back 21

1 Blank - bearer paper; if special - " pay J. Smith" - he must signed to transfer
2 Unrestrictive; restrictive - "for deposit only" - do not effect negotiation
3 Unqualified; qualified - "without recourse"

Front 22

Capital loss rules vs Net operating loss
1. Net operating loss - Offset other income, Carry back, Carry forward?
2. Corporate NET Cap. loss - Offset other income, Carry back, Carry forward?
3. Individual Net Cap. loss - Offset other income, Carry back, Carry forward?

Back 22

1. N/A, 2, 20
2. 0, 3, 5
3. $3,000 max, 0, Unlimited

Front 23

MACRS 5-year class includes __________
MACRS 7-year class includes __________

Back 23

5-year - cars, light trucks, computers, office machinery - calculators, copiers
7-year - heavy, special-purpose trucks, office fumiture

Front 24

________ and _________ are allowed a NOL deduction.

Back 24

Trusts and Estates

Front 25

The holder of a negotiable promissory note is a holder in due course taking the note free of the defense of nonperformance of a condition precedent. A HDC takes a note free of contractual or _________ defenses including nonperformance of the contract, lack of consideration, and fraud in the inducement.
A HDC will not prevail in the face of __________ defenses including minority of the maker, forgery of the maker's signature, or discharge of the maker in bankruptcy.

Back 25

1. "PERSONAL"
2. "REAL"

Front 26

A shipment contract means that the seller is authorized or required to ship the goods by carrier and as a result, the risk of loss passed to the buyer when the goods are _____________

Back 26

DELIVERED TO THE CARRIER

Front 27

If the gain is relized on the exchange of properties, the gain is recognized to the extent of the LESSER of the _________ or the ___________

Back 27

GAIN REALIZED (New value+mortgage relief + cash)
FMV of the Boot received (Cash + MORTGAGE RELIEF)

Front 28

For the year 2008, the maximum section 179 expense is _______. Howver, if qualifying purchases exceed $_______, the maximum must be reduced dollar-for-dollar.

Back 28

$250,000
$800,000

EX 250,000 - ( 850K-800K) = 200K

Front 29

If a C Corp. has $____ in annual sales, it is required to use the accrual method of accounting

Back 29

10 million

Front 30

The IRS has ____ years to collect after a tax has been assessed.

Back 30

10 years

Front 31

To cancel a contract and to restore the parties to their original positions before the contract, the parties should execute a ___________

Back 31

RESCISSION