Gleim Questions Essays

26401 Words 106 Pages
In Year 1, Brun Corp. properly accrued $10,000 for an income item on the basis of a reasonable estimate. In Year 2, Brun determined that the exact amount was $12,000. Which of the following statements is true? | | A. | Brun is required to file an amended return to report the additional $2,000 of income. | B. | Brun is required to notify the IRS within 30 days of the determination of the exact amount of the item. | C. | The $2,000 difference is includible in Brun’s Year 2 income tax return. | | ABC Corporation ends its tax year on October 30. When must ABC’s income tax return be filed for the year ending October 30, Year 1? | | A. | January 15, Year 2. | | An S corporation engaged in manufacturing has a year end of June …show more content…
| D. | $38,500 | | Martin Corporation’s bookkeeper told the owner that she could not have all the tax information ready for the accountant immediately after the tax year end of June 30. She was having surgery and asked if the tax return could be postponed. The accountant’s answer should be: | | A. | No, the return must be filed by September 15. | B. | Yes, we can request an extension until October 15. | C. | Yes, we can request an extension until the following March 15. | | Which of the following entities may adopt any tax year end? | | A. | C corporation. | | Which of the following is an advantage of forming a limited liability company (LLC) as opposed to a partnership? | | A. | The entity may avoid taxation. | B. | The entity may have any number of owners. | C. | The owner may participate in management while limiting personal liability. | | A C corporation must use the accrual method of accounting in which of the following circumstances? | | A. | The business had average sales for the past 3 years of less than $1 million. | B. | The business is a service company and has over $1 million in sales. | C. | The business is a personal service business with over $15 million in sales. | D. | The business has more than $10 million in average sales. | | One of the elections a new corporation must make is its choice of an accounting period. Which of the following entities has the most flexibility in choosing an

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