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A corporation’s penalty for underpaying federal estimated taxes is

(A)Not deductible.

(B)Fully deductible in the year paid.

(C)Fully deductible if reasonable cause can be established for the underpayment.

(D)Partially deductible.

The Correct Answer

The purchase of treasury stock would be shown under which section on the statement of cash flows? Mark one answer:

(A)Operating (B)Investing (C)Financing (D)Supplemental (E)It is not reported on the statement of cash flows.

Correct Answer: C

The statement of cash flow reports are used for the following: (I)Investing activities(I) Financing activities(I)I Operating activities(I) Supplemental activities Mark one answer:

(A)I (B)II (C)III (D)I, II, and III (E)I, II, III, and IV

Correct Answer: E

The controller of a small utility company has interviewed audit firms proposing to perform the annual audit of their employee benefit plan. According to the guidelines of the Department of Labor (DOL), the selected auditor must be

(A)The firm that proposes the lowest fee for the work required. (B)Independent for purposes of examining financial information required to be filed annually with the DOL. (C)Included on the list of firms approved by the DOL. (D)Independent of the utility company and NOT relying on its services.

Correct Answer: B

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