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Taxes – Practice Exam

By Beth McTeer / August 31, 2022

CDB Taxes Taxes – Practice Exam

This practice exam can be taken as many times as needed to feel confident and prepared for the Taxes Exam.

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Question 1 of 10

1. Question
If a client purchases gifts for a total of $75 per person, what is the correct entry?
- Debit Gifts $25, Debit Gifts Non-Deductible $50, Credit Cash $75
- Debit Owners Draw $75, Credit Cash $75
- Debit Gifts $25, Debit Owners Draw $50, Credit Cash $75
- Debit Gifts $75, Credit Cash $75
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Question 2 of 10

2. Question
Who should be excluded from receiving a 1099? (Select all that apply.)
- LLC taxed as corporation
- Attorneys
- C corp
- LLC not taxed as a corporation
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Question 3 of 10

3. Question
Client sponsors the local girl scout troop as a charitable contribution. They ask you if it’s deductible for their business. Select all that are TRUE.
- If they are a C-Corp, it is deductible on the business return.
- If they are a S-Corp, it is deductible on the business return.
- If they are a S-Corp, it is NOT deductible on the business return.
- If they are a sole proprietor, it is deductible on the Schedule C.
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Question 4 of 10

4. Question
Your client collects sales tax on each product sold. How do you enter the expense?
- You don't enter an expense; it's a liability.
- You put it into Sales tax expense.
- You don't enter it on the books, it stays in the Point of Sale (POS) system.
- Only record the credit card sales tax collected.
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Question 5 of 10

5. Question
Your books should always match the tax return.
- True
- False
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Question 6 of 10

6. Question
Accountable plans allow an owner to take an amount as a reimbursement, but the owner still has to provide documentation of the expense.
- True
- False
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Question 7 of 10

7. Question
Where can you get the retained earnings balance from a tax return? (Select all that apply.)
- 1120S Schedule L
- 1040 Schedule L
- 1065 Schedule L
- 1120 Schedule L
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Question 8 of 10

8. Question
A dentist purchased office furniture. How many years is it depreciated?
- 5
- 7
- 15
- 27.5
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Question 9 of 10

9. Question
What helps determine whether a worker is a 1099 contractor or a W2 employee? (Select all that apply.)
- How many hours of work performed
- Whether the worker is new to the company
- Who has control over the pay and schedule of the worker
- Who provides the equipment that the worker uses
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Question 10 of 10

10. Question
The gym owner purchases new workout clothes and gym shoes. They ONLY wear it to work. Is it deductible?
- Yes, they only wear it to work.
- Yes, they bought with business money.
- Yes, they are ordinary and necessary expenses for their industry.
- No, they can be worn outside of their work; therefore not deductible.
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