Section Review

These questions are designed to review the information in this section and test your knowledge of the key points. Select the appropriate answer to each of the following questions

1. Officer compensation entries print on Form 1120, Schedule E, column (f), if:

If total assets exceed $500,000
If total receipts exceed $500,000
If total compensation exceeds $500,000



2. Which of the following is NOT true regarding Cost of Goods Sold?

The entry for Beginning inventory carries to the balance sheet
The entry for Ending inventory carries to the balance sheet
Amounts entered for Other costs are detailed on supporting statements
The Inventories entries in the Balance Sheet input carry to Form 1120, Sch A



3. To have the program adjust the prepaid federal tax amount based on the actual tax calculated,

Check the Accrue federal tax box in Screen 4, Miscellaneous/Other information
Enter estimated tax payments as the beginning asset amount for prepaid federal tax
Set the Option to Yes



4. The balance sheet is NOT required when:

Officer compensation exceeds $500,000
If you leave the Current year book depreciation field blank
If the corporation's total receipts for the tax year and its total assets at the end of the tax year are less than $250,000



5. Which of the following is NOT true regarding estimates?

You can elect to apply an overpayment on the current year's return to the estimates
The program creates estimate vouchers
The program generates Form 1120-W
The estimate amounts are included on the General Information page and the client letter.

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