Accounting Periods Exam Questions and Answers

School: Colorado Technical University - Course: ACCT 225 - Subject: Accounting

Accounting Periods Exam 1. Which of the following is true of S-corporations in regards to accounting periods? a. A permitted tax year can be any tax year elected under Section 444 b. S-corporations may use a 52-53 week tax year, which ends with the section 444 elected tax year c.An S-corporation may not demonstrate a legitimate business purpose for using a different tax year d. S-corporations may use a 51-53 week tax year, which ends with the section 444 elected tax year e.S-corporations are not required to use a permitted tax year 2. Members of partnerships have to align their tax years to their partner's tax year, unless what applies? a.Under section 444, the partnership elects to follow a 51-53 week tax year that ends on the required tax year b. A legitimate business purpose cannot demonstrate a good reason to use a different tax year c.Under section 444, the partnership elects to have a 51- 53 week tax year that ends on a selected year d. Under section 444, the partnership elects a 52-53 week tax year that ends on an elected year e. The partnership files Form 8716, making a section 444 election 3. For accounting changes, partnerships, S-corporations, and private service corporations can make a section ____ election. a. 1099 b. PSC c. 1128 d. 444 4. With the exception of tax-exempt trusts, trusts are required to report using a ____ year. a. Fiscal b. Specific tax c. Physical d. Calendar

5. Which of the following is true of requesting IRS approval for a change in accounting period? a.Generally speaking, taxpayers must file Form 1129 to request an accounting period change b. No exceptions are listed in the instructions for Form 1128 c.Partnerships, S corporations, and private service corporations cannot make a section 444 election d. Certain requests qualify for automatic approval and a waived fee 6. Which of the following Is true of adopting a tax year? a.A taxpayer adopts a year by filing any income tax return using the desired tax year b. If permitted to adopt a fiscal year, the taxpayer must keep records corresponding to the fiscal year c. A taxpayer adopts a year by filing the first income tax return using the desired tax year d. If permitted to adopt a fiscal year, the taxpayer must keep records corresponding to the calendar year e.A tax year can be adopted be applying for an EIN 7. If a taxpayer wants to change his or her tax year, he or she files Form ____. a. 1099 b. PSC c. 1128 d. 444 8. The accounting period that runs consecutively from January 1stto December 31st is called a ______ year. a. Fiscal b. Calendar c. Physical d. Standard 9. Which of the following is true of annual accounting periods? a. An annual accounting period is selected when filing the first tax return b. An annual accounting period is selected when filing any tax return