AICPA REG : CPA Regulation

Exam Code: REG

Exam Name: CPA Regulation

Updated: Aug 30, 2025

Q & A: 70 Questions and Answers

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AICPA CPA Regulation Sample Questions:

1. Which one of the following will result in an accruable expense for an accrual-basis taxpayer?

A) A repair completed prior to year end and paid upon completion.
B) A repair completed prior to year end but not invoiced.
C) An invoice dated prior to year end but the repair completed after year end.
D) A signed contract for repair work to be done and the work is to be completed at a later date.


2. Tom and Joan Moore, both CPAs, filed a joint 1994 federal income tax return showing $70,000 in taxable
income. During 1994, Tom's daughter Laura, age 16, resided with Tom. Laura had no income of her own
and was Tom's dependent.
Determine the amount of income or loss, if any that should be included on page one of the Moores' 1994
Form 1040.
The Moores received $8,400 in gross receipts from their rental property during 1994. The expenses for
the residential rental property were:

A) $1,000
B) $10,000
C) $500
D) $3,000
E) $75,000
F) $1,250
G) $900
H) $55,000
I) $1,500
J) $2,500
K) $2,000
L) $25,000
M) $50,000
N) $1,300
O) $0


3. In 19X4, Smith, a divorced person, provided over one half the support for his widowed mother, Ruth, and
his son, Clay, both of whom are U.S. citizens. During 19X4, Ruth did not live with Smith. She received
$ 9,000 in Social Security benefits. Clay, a 25 year-old full-time graduate student, and his wife lived with
Smith. Clay had no income but filed a joint return for 19X4, owing an additional $500 in taxes on his wife's
income. How many exemptions was Smith entitled to claim on his 19X4 tax return?

A) 1
B) 3
C) 2
D) 4


4. Farr made a gift of stock to her child, Pat. At the date of gift, Farr's stock basis was $10,000 and the
stock's fair market value was $15,000. No gift taxes were paid. What is Pat's basis in the stock for
computing gain?

A) $10,000
B) $15,000
C) $5,000
D) $0


5. Adams owns a second residence that is used for both personal and rental purposes. During 2001, Adams
used the second residence for 50 days and rented the residence for 200 days. Which of the following
statements is correct?

A) A rental loss may be deducted if rental-related expenses exceed rental income.
B) All mortgage interest and taxes on the property will be deducted to determine the property's net income
or loss.
C) Utilities and maintenance on the property must be divided between personal and rental use.
D) Depreciation may not be deducted on the property under any circumstances.


Solutions:

Question # 1
Answer: B
Question # 2
Answer: J
Question # 3
Answer: C
Question # 4
Answer: A
Question # 5
Answer: C

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