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Question 1

3 levels of financial reports from a CPA

Answer 1

1. Compilation
2. Review - (mainly for loans)
3. Audit

Question 2

Three kinds of tax professionals allowed to represent a tax payer in an event of an audit

Answer 2

CPA
attorney
EA (enrolled agent)

Question 3

EA enrolled agents

Answer 3

Individual who has demonstrated competence in the field of taxation.

Enrolled/licensed by the feds

Question 4

CPA vs EA

Answer 4

CPA = financial reporting, attestation, auditing, basic business-law concepts, and business advisory services

EA = taxation

Question 5

Accounting equation

Answer 5

Assets = equities
Equities = liabilities + owner’s equity

Question 6

Owner’ equity equation

Answer 6

Assets - Liability = Owner’s equity

Question 7

4 financial statements

Answer 7

Balance Sheet

P&L

Cash Flow,

Statement of Stockholders’ Equity

Question 8

What is cash-based accounting?

Answer 8

A method of accounting in which revenues and losses are only tracked when bills are paid (versus when transactions occur).

Question 9

What is accrual-based accounting?

Answer 9

A method of accounting in which revenues and losses are tracked transactions occur, regardless of when cash is paid/received.

Question 10

Merchandise vs Suppies

Answer 10

Merchandise is passed to the customer like meds or vaccines

Supplies are consumed during services like exam gloves and guaze