Enrolled Agent Exam Prep Part 2
2025/2026 Exam Questions and Correct
Answers | New Update
Which form of business entity is not a legal entity separate and apart from
its owner?
A. Corporation
B. Partnership
C. Sole proprietorship
D. S corporation - 🧠 ANSWER ✔✔C
,Under which circumstance is an entity required to apply for a new employer
identification number?
A. Proprietorship that incorporates
B. Business name change
C. Electing or revoking S corp status
D. 50% change of interest in partnership within 12 months. - 🧠 ANSWER
✔✔A
LLC's may be an attractive small business alternative as opposed to an S
corp because LLC's offer the following advantage(s) not available in S
corps:
A. Inclusion of entity-level liabilities in tax basis
B. Pass-through taxation
C. Flexibility in types of owners and ownership interest
D. Both inclusion of entity-level liabilities in tax basis and flexibility in types
of owners and ownership interests. - 🧠 ANSWER ✔✔D
,A domestic LLC with at least two members that does not file Form 8832,
Entity Classification Election, is classified as
A. An entity disregarded as an entity separate from its owners by applying
the rules in Regulations Section 301.7701-3
B. A partnership
C. A corporation
D. A non-entity that requires members to report the income and related
expenses on Form 1040 - 🧠 ANSWER ✔✔B
Which of the following statements regarding accounting methods is false?
A. If inventories are necessary, the accrual method is used for sales and
purchases
B. A combination (hybrid) method is not an acceptable method of
accounting
C. A change from the accrual to the cash method of accounting requires
consent from the IRS
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
STATEMENT. ALL RIGHTS RESERVED
3
, D. Under the cash method of accounting, gross income includes all items of
income actually or constructively received during the year - 🧠 ANSWER
✔✔B
You can compute your taxable income under which of the following
accounting methods?
A. Hybrid method
B. Accrual method
C. Special method for certain items
D. All of the answers are correct - 🧠 ANSWER ✔✔D
Which of the following accounting changes do not require the filing of Form
3115 to request a change in accounting method?
A. Correction of a math error
B. Change from accrual method to cash method
C. Change in the method inventory is valued
D. Change from cash method to accrual method - 🧠 ANSWER ✔✔A
2025/2026 Exam Questions and Correct
Answers | New Update
Which form of business entity is not a legal entity separate and apart from
its owner?
A. Corporation
B. Partnership
C. Sole proprietorship
D. S corporation - 🧠 ANSWER ✔✔C
,Under which circumstance is an entity required to apply for a new employer
identification number?
A. Proprietorship that incorporates
B. Business name change
C. Electing or revoking S corp status
D. 50% change of interest in partnership within 12 months. - 🧠 ANSWER
✔✔A
LLC's may be an attractive small business alternative as opposed to an S
corp because LLC's offer the following advantage(s) not available in S
corps:
A. Inclusion of entity-level liabilities in tax basis
B. Pass-through taxation
C. Flexibility in types of owners and ownership interest
D. Both inclusion of entity-level liabilities in tax basis and flexibility in types
of owners and ownership interests. - 🧠 ANSWER ✔✔D
,A domestic LLC with at least two members that does not file Form 8832,
Entity Classification Election, is classified as
A. An entity disregarded as an entity separate from its owners by applying
the rules in Regulations Section 301.7701-3
B. A partnership
C. A corporation
D. A non-entity that requires members to report the income and related
expenses on Form 1040 - 🧠 ANSWER ✔✔B
Which of the following statements regarding accounting methods is false?
A. If inventories are necessary, the accrual method is used for sales and
purchases
B. A combination (hybrid) method is not an acceptable method of
accounting
C. A change from the accrual to the cash method of accounting requires
consent from the IRS
COPYRIGHT©NINJANERD 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
STATEMENT. ALL RIGHTS RESERVED
3
, D. Under the cash method of accounting, gross income includes all items of
income actually or constructively received during the year - 🧠 ANSWER
✔✔B
You can compute your taxable income under which of the following
accounting methods?
A. Hybrid method
B. Accrual method
C. Special method for certain items
D. All of the answers are correct - 🧠 ANSWER ✔✔D
Which of the following accounting changes do not require the filing of Form
3115 to request a change in accounting method?
A. Correction of a math error
B. Change from accrual method to cash method
C. Change in the method inventory is valued
D. Change from cash method to accrual method - 🧠 ANSWER ✔✔A
