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CPA REG Business Structures And Other Regulatory Areas
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Here is an overview of the key business structures and regulatory areas covered: 1. Business Structures (Entities) REG covers the formation, operation, taxation, and termination of various business entities:  Sole Proprietorships: The simplest structure, owned by one person. It has minimal compliance requirements but offers no liability protection (unlimited personal liability). Partnerships: Involves two or more people. Types include General Partnerships (GP), Limited Partnerships (LP), and Limited Liability Partnerships (LLP). They generally follow pass-through taxation... Show more
CPA REG Business Structures And Other Regulatory Areas
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19 Questions

1. When a new partner is admitted to an existing partnership to replace an outgoing partner, the liability of the newly admitted partner for existing partnership debts is:
2. Noll is a promoter of a corporation to be known as Rotondo Corp. On January 1, Year 5, Noll signed a nine-month contract with Clark, a CPA, which provided that Clark would perform certain accounting services for Rotondo Corp. Noll did not disclose to Clark that Rotondo Corp. had not been formed.
Prior to the incorporation of Rotondo Corp. on February 1, Year 5, Clark rendered accounting services pursuant to the contract. After rendering accounting services for an additional period of six months pursuant to the contract, Clark was discharged without cause by the board of directors of Rotondo. In the absence of any agreements to the contrary, who will be liable to Clark for breach of contract?
3. Larry, an employee of Hanson Manufacturing, Inc., was injured in the course of employment while operating a forklift manufactured and sold to Hanson by Suzy Wong, Inc. Under the state’s mandatory workers’ compensation statute, Larry will be successful in obtaining:
I. workers’ compensation even if Larry was negligent
II. legal action against Hanson, Inc.
III. legal action against Suzy Wong, Inc.
4. Which of the following is a corporate equity security?
I. A callable bond
II. A share of convertible preferred stock
5. Which of the following is a corporate equity security?
I. A callable bond
II. A share of convertible preferred stock
6. The length of the creator’s life is NOT a factor in determining the years of protection for a:
I. copyright
II. patent
7. The length of the creator’s life is NOT a factor in determining the years of protection for a:
I. copyright
II. patent
8. A, B, C, and D are partners in the ABCD partnership. If Partner A retires from the partnership, then for Partner A to avoid liability for future debts of the partnership, actual notice needs to be given to existing creditors of Partner A’s retirement and:
9. Which of the following types of businesses may generally be formed without filing an organizational document with a state agency?
I. Proprietorship
II. General partnership
III. Limited liability partnership (LLP)
IV. Limited liability company (LLC),I and II only,I
10. When a new partner is admitted to an existing partnership to replace an outgoing partner, the liability of the newly admitted partner for existing partnership debts is:
11. Lucas owns 200 shares of Shea Corp. cumulative preferred stock. In the absence of any specific contrary provisions in Shea’s articles of incorporation, which of the following statements is correct?
12. Which of the following actions of a partnership require unanimous consent of all partners?
I. Submitting a claim to arbitration
II. Admission of a new partner
13. Which of the following is correct regarding an agreement to form a general partnership?
I. Must be filed with the state government
II. Must be in writing
III. may be oral, or implied by conduct
14. Eco Environmental Services, Inc., is a C corporation. Which of the following is a characteristic of a C corporation?
15. Larry, an employee of Hanson Manufacturing, Inc., was injured in the course of employment while operating a forklift manufactured and sold to Hanson by Suzy Wong, Inc. Under the state’s mandatory workers’ compensation statute, Larry will be successful in obtaining:
I. workers’ compensation even if Larry was negligent
II. legal action against Hanson, Inc.
III. legal action against Suzy Wong, Inc.
16. For what purpose will a stockholder of a publicly held corporation be permitted to file a shareholder’s derivative lawsuit in the name of the corporation?
I. To compel payment of a properly declared dividend
II. To recover damages from corporate management for an ultra vires management act
17. According to the Sherman Antitrust Act, which of the following would be considered evidence of a monopoly?
I. A firm’s ability to control prices
II. A firm’s ability to exclude competition
III. A firm’s market share of above 70%
18. According to the Bank Secrecy Act, financial institutions must file a currency transaction report (CTR) for each transaction in excess of:
19. Assessment of the $100 preparer penalty for failure to employ due diligence in connection with the earned income credit applies to:
I. determining the client’s eligibility for the earned income credit
II. determining the amount of the client’s earned income credit

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