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AICPA CPA Regulation Sample Questions:
1. Porter was unemployed for part of the year. Porter received $35,000 of wages, $4,000 from a state
unemployment compensation plan, and $2,000 from his former employer's company-paid supplemental
unemployment benefit plan. What is the amount of Porter's gross income?
A) $41,000
B) $35,000
C) $39,000
D) $37,000
2. In a tax year where the taxpayer pays qualified education expenses, interest income on the redemption of
qualified U.S. Series EE Bonds may be excluded from gross income. The exclusion is subject to a
modified gross income limitation and a limit of aggregate bond proceeds in excess of qualified higher
education expenses. Which of the following is (are) true?
I. The exclusion applies for education expenses incurred by the taxpayer, the taxpayer's spouse, or any
person whom the taxpayer may claim as a dependent for the year.
II. "Otherwise qualified higher education expenses" must be reduced by qualified scholarships not
includible in gross income.
A) II only.
B) Neither I nor II.
C) I only.
D) Both I and II.
3. Under the uniform capitalization rules applicable to taxpayers with property acquired for resale, which of
the following costs should be capitalized with respect to inventory if no exceptions have been met?
A) Option C
B) Option D
C) Option B
D) Option A
4. Greller owns 100 shares of Arden Corp., a publicly-traded company, which Greller purchased on January
1 , 2001, for $10,000. On January 1, 2003, Arden declared a 2-for-1 stock split when the fair market value
(FMV) of the stock was $120 per share. Immediately following the split, the FMV of Arden stock was $62
per share. On February 1, 2003, Greller had his broker specifically sell the 100 shares of Arden stock
received in the split when the FMV of the stock was $65 per share. What is the basis of the 100 shares of
Arden sold?
A) $5,000
B) $6,500
C) $6,000
D) $6,200
5. Smith, an individual calendar-year taxpayer, purchased 100 shares of Core Co. common stock for
$ 15,000 on December 15, 1992, and an additional 100 shares for $13,000 on December 30, 1992. On
January 3, 1993, Smith sold the shares purchased on December 15, 1992, for $13,000. What amount of
loss from the sale of Core's stock is deductible on Smith's 1992 and 1993 income tax returns?
A) Option C
B) Option D
C) Option B
D) Option A
Solutions:
| Question # 1 Answer: A | Question # 2 Answer: D | Question # 3 Answer: D | Question # 4 Answer: A | Question # 5 Answer: D |




