June 6 Wrong Answers Flashcards
Normally a majority of shareholders of each corporations must…
Approve the merger
If a contract violates a regulatory licensing statute, it will be…
Unenforceable by either party
The main function if a regulatory licensing statute is to…
Protect the public against unskilled or dishonest persons
Violation of a revenue seeking statute is…
Enforceable
The purpose of a revenue seeking statute is to…
Gain revenue for governmental unit issuing the license
When a lease is treated as a capital lease…
Title passes when the company receives the leased goods
The issuer of a note payable must pay…
A holder in due course
Cumulative voting gives the shareholder…
One vote for each share owned times the number of directors being elected
Cumulative voting gives minority shareholders an opportunity to get some representation on the board by…
Voting all shares for 1 or 2 directors
It is improper for the bank to refuse to honor the check in this case since it is…2
1 At fault in misdirecting the funds and
2 therefore has duty to pay the check
A creditor may choose to proceed immediately against the surety for full payment of a loan instead of…
Against the principal debtor or the collateral
A cosurety is not released from his obligation to perform merely because…
His cosurety refuses to perform
Upon full payment of the obligation, the cosurety can…
Demand a pro rata contribution from his nonperforming cosurety
Under the Bankruptcy Code, a trustee has the power to set aside…
Preferential transfers made by debtor to creditors
Enabling loan
Trustee does not have power to stop preferential transfer
In an enabling loan, trustee does not have power to stop preferential transfers when a security interest is given by debtor to acquire property that is…
Perfected within 10 days after security interest attached
Taxable gain on insurance proceeds, what is subtracted from total insurance proceeds?
Lesser of FMV or Adjusted basis of destroyed property
Unified transfer tax rate schedule applies the same tax rates on cumulative basis to…
Both life and death transfers
A unified rate schedule does not…
Apply different rates for gift tax and estate tax
Tax payers who aid and abet federal tax evasion are subject to…
injunction prohibiting them from acting as tax preparers
Notifying clients that the accountants are providing their confidential information to outsourcing firms for processing is…
Not required by law
When a stockholder sues a CPA for common law fraud based on false statements, what is the CPA’s best defense?
False statements were immaterial
When a partnership interest does not exceed 50% and a partner sells stock (that was held long term) to the partnership for a capital loss, how is the loss treated?
The entire loss is recognized as a longterm capital loss
If a partner dies during a fiscal year, how are the earnings and profits allocated?
Allocated to partner for months he is living
And his estate for months after death
Donee’s adjusted basis of gift tax, what is the fraction in the calculation?
((FMV - adjusted basis)/(FMV - exclusion))
Depreciation deduction for nonresidential real property, placed in service after 1986 under MACRS?
Straight line method over 39 years
A self employed tax payer can deduct…
100% of health insurance premiums
Generally no gain or loss is recognized on the transfer of property to a partnership in…
Exchange for partnership interest
Generally no gain or loss is recognized on the transfer of property to a partnership in exchange for a partnership interest. As a result the basis of partnership interest is equal to…
Basis of property transferred
The merger of 2 corporations requires…
Approval from the board of directors of both merging corporations
