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IRS Enrolled Agent Unit 2 TEST with complete solutions
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IRS Enrolled Agent Unit 2 TEST
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IRS Enrolled Agent Unit 2 TEST1. jWhich jof jthe jfollowing jdate jranges jwould jbe ja jpermissible jfiscal jtax jyear? j
A. jJanuary j1, j2016 jto jDecember j31, j2016 j
B. jFebruary j2, j2016 jto jFebruary j2, j2017 j
C. jJuly j1, j2016 jto jJune j30, j2017 j
D. jMay j1, j2016 jto jMay j31, j2017 j- jCorrect jAnswers j-c
2. jAll jof jthe jfollowing jcosts jmust jbe jincluded jin jinventory jexcept: j
A. jThe jcost jof jhipping jraw jmaterials jto jthe jseller's jfactory. j
B jThe jcost jof jshipping ja jfinished jproduct jto ja jcustomer. j
C jRaw jmaterial j. j
D. jDirect jlabor jcosts. j- jCorrect jAnswers j-B
3. jWhich jof jthe jfollowing jchanges jin jaccounting jmethod jdoes jnot jrequire jprior
japproval jfrom jthe jIRS? j
A. jA jchange jfrom jFIFO jto jLIFO jinventory jvaluation. j
B. jA jchange jfrom jthe jcash jmethod jto jthe jaccrual jmethod. j
C. jA jer j1nge jin jthe joverall jmethod jof jfiguring jdepreciation. j
D. jA jcorrection jof ja jmath jerror jin jdepreciating jan jasset. j- jCorrect jAnswers j-D
4. jWhich jof jthe jfollowing jentities jcan juse jthe jcash jmethod jof jaccounting? j
A. jA jfamily jfarming jcorporation jwith javerage jgross jreceipts jof j$22 jmillion. j
B. jA jC jcorporation jwith javerage jgross jreceipts jof j$50 jmillion. j
C. jA jtax jshelter jwith javerage jgross jreceipts jof j$50,000. j
D. jA jcorporation jwith jlong-term jcontracts jand javerage jgross jreceipts jof j$900,000. j-
jCorrect jAnswers j-A
5. jWhich jwould jnot jbe jconsidered jthe jend jof jan jacceptable jtax jyear? j
A. jJanuary j31 j
B. jApnl j15 j
C. jDecember j31 j
D. jThe jlast jFriday jin jFebruary. j- jCorrect jAnswers j-B
6. jWhich jof jthe jfollowing jentities jcannot juse jthe jcash jmethod jof jaccounting? j
A. jA jpartnership jthat jproduces jinventory jfor jsale jto jcustomers jand jhas j$1.2 jmillion jof
javerage jannual jgross j
receipts. j
, B. jA jC jcorporation jwithout jinventory jthat jhas j$4.5 jmillion jof javerage jannual jgross
jret:e1pts j
C. jA jqualified jfamily jfarming jcorporation jwith j$24 jmillion jof javerage jannual jgross
jreceipts. j
D. jA jsole jproprietor jwith jinventory jand j$500,000 jof javerage jannual jgross jreceipts. j-
jCorrect jAnswers j-A
7. jUnder jthe jlower jof jcost jor jmarket jmethod jof jvaluing jinventory, jwhat jis jthe jvalue jof
jthe jinventory jas ja jwhole, j
based jon jthe jtable jbelow? j
Cost jMarket j
$200 j$500 j
$300 j$200 j
$225 j$150 j
$725 j$850 j
A. j$725 j
B.$850 j
C. j$750 j
D.$550 j- jCorrect jAnswers j-D
8. jHelen jis jthe jowner jof jBanner jCustom jSofas, ja jcalendar jyear, jaccrual-basis jS
jcorporation. jShe jsells jfive jsofas jto j
Sonny's jInterior jDesign jon jDecember j21, j2016, jand jbills jSonny's jfor j$2,500 jon jthat
jdate. jSonny's jpays jthe jinvoice j
in jfull jon jJanuary j15, j2017. jBanner jwould jinclude jthis jincome jin: j
A.2015 j
B.2016 j
C.2017 j
D. jNone jof jthe jabove. j- jCorrect jAnswers j-B
9. jVargas jCellular jCorporation, ja jC jcorporation, jwas jorganized jon jApril jl, j2016. jIt
jelected jthe jcalendar jyear jas jits j
tax jyear. jWhen jis jthe jfirst jtax jreturn jdue jfor jVargas jCellular jfor jthis jshort jtax jyear? j
A. jApril j18, j2017 j
B. jApril j15, j2016 j
C. jMarch j15, j2018 j
D. jMay j15, j2017 j- jCorrect jAnswers j-A
10. jWhich jof jthe jfollowing jactivities jwould jmake ja jtaxpayer jsubject jto jthe juniform
jcapitalization j(UNICAP) jrules? j- jA. jAn jindividual jtaxpayer jwho jproduces jitems jas ja
jhobby jand joccasionally jsells jthem jat ja jprofit. j
B. jA jtaxpayer jwho jproduces jproperty jfor jsale jto jwholesale jretailers. j
c. jA jt jaxpayer jwho jacquires jland jand jholds jit jfor jinvestment. j
D. jA jfreelance jartist jwho jcarries jan jinventory jof jartwork jvalued jat j$1.2 jmillion. j-
jCorrect jAnswers j-B
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