June 6 Wrong Answers Flashcards Preview

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Flashcards in June 6 Wrong Answers Deck (30)
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1
Q

Normally a majority of shareholders of each corporations must…

A

Approve the merger

2
Q

If a contract violates a regulatory licensing statute, it will be…

A

Unenforceable by either party

3
Q

The main function if a regulatory licensing statute is to…

A

Protect the public against unskilled or dishonest persons

4
Q

Violation of a revenue seeking statute is…

A

Enforceable

5
Q

The purpose of a revenue seeking statute is to…

A

Gain revenue for governmental unit issuing the license

6
Q

When a lease is treated as a capital lease…

A

Title passes when the company receives the leased goods

7
Q

The issuer of a note payable must pay…

A

A holder in due course

8
Q

Cumulative voting gives the shareholder…

A

One vote for each share owned times the number of directors being elected

9
Q

Cumulative voting gives minority shareholders an opportunity to get some representation on the board by…

A

Voting all shares for 1 or 2 directors

10
Q

It is improper for the bank to refuse to honor the check in this case since it is…2

A

1 At fault in misdirecting the funds and

2 therefore has duty to pay the check

11
Q

A creditor may choose to proceed immediately against the surety for full payment of a loan instead of…

A

Against the principal debtor or the collateral

12
Q

A cosurety is not released from his obligation to perform merely because…

A

His cosurety refuses to perform

13
Q

Upon full payment of the obligation, the cosurety can…

A

Demand a pro rata contribution from his nonperforming cosurety

14
Q

Under the Bankruptcy Code, a trustee has the power to set aside…

A

Preferential transfers made by debtor to creditors

15
Q

Enabling loan

A

Trustee does not have power to stop preferential transfer

16
Q

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…

A

Perfected within 10 days after security interest attached

17
Q

Taxable gain on insurance proceeds, what is subtracted from total insurance proceeds?

A

Lesser of FMV or Adjusted basis of destroyed property

18
Q

Unified transfer tax rate schedule applies the same tax rates on cumulative basis to…

A

Both life and death transfers

19
Q

A unified rate schedule does not…

A

Apply different rates for gift tax and estate tax

20
Q

Tax payers who aid and abet federal tax evasion are subject to…

A

injunction prohibiting them from acting as tax preparers

21
Q

Notifying clients that the accountants are providing their confidential information to outsourcing firms for processing is…

A

Not required by law

22
Q

When a stockholder sues a CPA for common law fraud based on false statements, what is the CPA’s best defense?

A

False statements were immaterial

23
Q

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?

A

The entire loss is recognized as a longterm capital loss

24
Q

If a partner dies during a fiscal year, how are the earnings and profits allocated?

A

Allocated to partner for months he is living

And his estate for months after death

25
Q

Donee’s adjusted basis of gift tax, what is the fraction in the calculation?

A

((FMV - adjusted basis)/(FMV - exclusion))

26
Q

Depreciation deduction for nonresidential real property, placed in service after 1986 under MACRS?

A

Straight line method over 39 years

27
Q

A self employed tax payer can deduct…

A

100% of health insurance premiums

28
Q

Generally no gain or loss is recognized on the transfer of property to a partnership in…

A

Exchange for partnership interest

29
Q

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…

A

Basis of property transferred

30
Q

The merger of 2 corporations requires…

A

Approval from the board of directors of both merging corporations

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