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AICPA CPA Regulation Sample Questions:

1. Darr, an employee of Sorce C corporation, is not a shareholder. Which of the following would be included
in a taxpayer's gross income?

A) The dividend income on shares of stock that the taxpayer received for services rendered.
B) A $10,000 gift from the taxpayer's grandparents.
C) The fair market value of land that the taxpayer inherited from an uncle.
D) Employer-provided medical insurance coverage under a health plan.

2. Under the uniform capitalization rules applicable to property acquired for resale, which of the following
costs should be capitalized with respect to inventory if no exceptions are met?

A) Option B
B) Option C
C) Option A
D) Option D

3. Under the uniform capitalization rules applicable to taxpayers with property acquired for resale, which of
the following costs should be capitalized with respect to inventory if no exceptions have been met?

A) Option B
B) Option C
C) Option A
D) Option D

4. Which of the following is subject to the Uniform Capitalization Rules of Code Sec. 263A?

A) Research and experimental expenditures.
B) Editorial costs incurred by a freelance writer.
C) Mine development and exploration costs.
D) Warehousing costs incurred by a manufacturing company with $12 million in annual gross receipts.

5. 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) $0
B) $500
C) $4,000
D) $4,500

Solutions: