HRB-27 Final Exam Review
COMPLETE QUESTIONS AND
ANSWERS | ALREADY PASSED |
2025 LATEST!!
Save
Terms in this set (125)
What income Form 1099-MISC (15.6)
reporting form
should an
independent
contractor
sometimes
receive from the
person who paid
him for his
services?
,Schedule C, Line • Under the accrual method, total
F asks for the sales and total charges for services
accounting are included in income even though
method used in payment may be received in
the business. another tax year.
What is the • Under the cash method, only
difference income actually received or
between the expenses actually paid during the
cash method year are included. (15.5)
and the accrual
method of
accounting?
What does it He is active in running the business
mean if a in a substantial way on a day-to-day
proprietor basis. (15.5)
"materially
participates" in
the business?
Why is it If the proprietor does not materially
important to participate, any loss from the
know whether or business is a passive loss and
not the generally may be currently
proprietor deducted only against passive
materially income. (15.6)
participates?
, • Amounts that were refunded to
customers who returned
What are returns merchandise for refund or partial
and allowances? refund.
• These amounts are subtracted
from gross receipts. (15.6)
Beginning inventory plus purchases,
How is cost of plus labor, supplies, depreciation,
goods sold etc. attributable to product
determined? manufacture or preparation for sale,
minus ending inventory. (15.7)
If the client has • Provide a Form 1099-MISC to any
contract labor, independent contractor who
what should you worked and earned $600 or more.
remind the client (15.9)
that they should
do?
What is the To pay social security and medicare
purpose of self- taxes. (15.14)
employment
tax?
, What amounts Amounts invested in the business
does a plus any business debts for which
proprietor have the proprietor is personally liable.
"at risk"? (15.16)
What difference Only amounts at risk may be used to
does it make if determine the actual loss on
the proprietor is Schedule C. (15.16)
"at risk" or not?
• Tax Professionals fulfill due
diligence requirements by making
How does a Tax every effort to prepare accurate
Professional and complete returns.
meet due • Tax Professionals must have
diligence knowledge of tax law, and apply a
requirements? reasonability check to the
information provided by their
clients. (26.1)
A thorough interview consists of
asking general information
What is a
questions, then asking additional
thorough
questions whenever information is
interview?
incomplete or seems inaccurate or
inconsistent. (26.2)
COMPLETE QUESTIONS AND
ANSWERS | ALREADY PASSED |
2025 LATEST!!
Save
Terms in this set (125)
What income Form 1099-MISC (15.6)
reporting form
should an
independent
contractor
sometimes
receive from the
person who paid
him for his
services?
,Schedule C, Line • Under the accrual method, total
F asks for the sales and total charges for services
accounting are included in income even though
method used in payment may be received in
the business. another tax year.
What is the • Under the cash method, only
difference income actually received or
between the expenses actually paid during the
cash method year are included. (15.5)
and the accrual
method of
accounting?
What does it He is active in running the business
mean if a in a substantial way on a day-to-day
proprietor basis. (15.5)
"materially
participates" in
the business?
Why is it If the proprietor does not materially
important to participate, any loss from the
know whether or business is a passive loss and
not the generally may be currently
proprietor deducted only against passive
materially income. (15.6)
participates?
, • Amounts that were refunded to
customers who returned
What are returns merchandise for refund or partial
and allowances? refund.
• These amounts are subtracted
from gross receipts. (15.6)
Beginning inventory plus purchases,
How is cost of plus labor, supplies, depreciation,
goods sold etc. attributable to product
determined? manufacture or preparation for sale,
minus ending inventory. (15.7)
If the client has • Provide a Form 1099-MISC to any
contract labor, independent contractor who
what should you worked and earned $600 or more.
remind the client (15.9)
that they should
do?
What is the To pay social security and medicare
purpose of self- taxes. (15.14)
employment
tax?
, What amounts Amounts invested in the business
does a plus any business debts for which
proprietor have the proprietor is personally liable.
"at risk"? (15.16)
What difference Only amounts at risk may be used to
does it make if determine the actual loss on
the proprietor is Schedule C. (15.16)
"at risk" or not?
• Tax Professionals fulfill due
diligence requirements by making
How does a Tax every effort to prepare accurate
Professional and complete returns.
meet due • Tax Professionals must have
diligence knowledge of tax law, and apply a
requirements? reasonability check to the
information provided by their
clients. (26.1)
A thorough interview consists of
asking general information
What is a
questions, then asking additional
thorough
questions whenever information is
interview?
incomplete or seems inaccurate or
inconsistent. (26.2)
