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In the current year, Fitz, a single taxpayer, sustained a $48,000 loss on Code Sec. 1244 stock in JJJ Corp., a qualifying small business corporation, and a $20,000 loss on Code Sec. 1244 stock in MMM Corp., another qualifying small business corporation. What is the maximum amount of loss that Fitz can deduct for the current year?

(A)$50,000 capital loss

(B)$68,000 capital loss

(C)$18,000 ordinary loss and $50,000 capital loss

(D)$50,000 ordinary loss and $18,000 capital loss

The Correct Answer

Three key words used to describe the ethical responsibilities of accountants are:

(A)CPA's, GAAP, AICPA (B)Competence, objectivity, and confidentiality (C)Reliability, integrity, and honesty (D)Integrity, intelligence, and reliability (E)Secrecy, intelligence, and reliability

Correct Answer: B

GAAP refers to: Mark one answer:

(A)General accounting assistance program (B)Generally accepted accounting principles (C)Generally acceptable account procedures (D)The theory that accounting and the general public look at financial statements differently

Correct Answer: B

If Jenny's Bakery purchased an insurance policy, assuming the accrual accounting method is still being used, when would the company report the cost of the policy as an expense?

(A)When Jenny signs the policy (B)When payment is made (C)When the bakery receives the benefits of the policy (D)When the bakery receives payments from the insurance company (E)When the invoice is received

Correct Answer: C

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