June 15th Quiz

Question 1

When a creditor refuses to accept the principal debtor’s tender of payment, the debtor will…

Answer 1

Remain liable as the accrual of additional interest stops

Question 2

When the owner of a coat leaves it in the closet voluntarily, the owner of the premises where the cost is left is…

Answer 2

The caretaker of the coat until the owner retrieves it

Question 3

Under the Securities Act of 1933, an accountant is liable to a purchaser of securities if the purchaser proves…2

Answer 3

1 a false financial statement/omission and

2 security was offered through registration statement

Question 4

An offering made under the provisions of Regulation A of the Securities Act of 1933 requires that the issuer…

Answer 4

File an offering circular with the SEC

Question 5

If a custom order is made for $50,000 and it costs $40,000 to make the custom order, and the buyer refuses to accept the order, how much can the seller recover?

Answer 5

$50,000

Question 6

At what level must all tax cases start?

Answer 6

Trial court

Question 7

The penalty for late filing of a partnership return is…

Answer 7

$195 per partner X # of months

Question 8

A principal will not be liable to a third party for a tort committed by an agent unless the tort was…

Answer 8

Committed within the scope of the agency relationship

Question 9

If a household employer files a schedule H, they do…

Answer 9

Not have to file Form 940 or Form 941

Question 10

If an agent sells to a buyer at a larger discount than allowed, the principal (employer) may seek to recover from…

Answer 10

The agent only

Question 11

Forming an agency relationship requires that…

Answer 11

Both principal and agent consent to the agency

Question 12

What is not considered personal holding company income?

Answer 12

Capital gains

Question 13

If a debtor files a petition for reorganization under Chapter 11 of the Federal Bankruptcy Code, a creditor’s committee if appointed will…

Answer 13

Consist of unsecured creditors

Question 14

A distinction between a surety and a co surety is that only a co surety is entitled to…

Answer 14

Contribution

Question 15

Contribution

Answer 15

Other co sureties contribute their share of liability to surety that had
To make full payment

Question 16

Reimbursement is the right of sureties and cosureties to be paid by the principal debtor if they have to…

Answer 16

Make good on their guarantee to the creditor

Question 17

Subrogation gives the sureties and co-sureties the right to any…

Answer 17

Assignments of property

Question 18

Exoneration gives both sureties and cosureties the right to…

Answer 18

Compel principal debtor to make payment to creditor if it can

Question 19

If a return omits an amount of income greater than 25%…

2) otherwise the IRS has…

Answer 19

IRS has 6 years to assess the deficiency

2) 3 years from time return is filed

Question 20

If common stock has an original basis of $1,000 and FMV of $1,900 and nontaxable preferred shares are issued for a FMV of $100? What is the basis of the preferred shares?

Answer 20

$1,000 x ($100/($1,900 + $100)) = $50

Question 21

Which of the following negotiable instruments is subject to the UCC Commercial Paper Article?

Answer 21

Installment note payable on the first day of each month

Question 22

$6,000 of a profit on a Residence used for business purposes is attributable to depreciation for the period after May 6, 1997. Home sale exclusion is $120,000. Of this gain…

Answer 22

$6,000 does not qualify for the home sale exclusion

Question 23

In order for an organization to qualify for an exemption…

Answer 23

No part of the organizations net earnings will benefit private
Shareholder or individual

Question 24

The right to avoid any statutory liens against the debtor’s property that were ineffective before the bankruptcy petition was filed is…

Answer 24

Not a power of a bankruptcy trustee

Question 25

Under the liability provisions of Section 11 of the Securities Act of 1933, which of the following must a plaintiff prove to hold a CPA liable?

Answer 25

Misstatements contained in financial statements certified by CPA
were material

Question 26

If a married couple gets divorced and the wife sells the house that the husband lives in, the special use tacking provision allows…

Answer 26

The wife to use the full $250,000 exclusion on the gain

Question 27

Chapter 11 bankruptcy was revised under the 2005 Bankruptcy Reform Act. Some of the more material changes and additions include…

Answer 27

Confirmation of Chapter 11 plan of reorganization does not

discharge an individual debtor

Question 28

When a creditor refuses to accept the principal debtor’s tender of payment…

Answer 28

The surety is released