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AICPA CPA-Regulation Exam - Topic 2 Question 23 Discussion

Actual exam question for AICPA's CPA-Regulation exam
Question #: 23
Topic #: 2
[All CPA-Regulation Questions]

Capital assets include:

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Suggested Answer: C

Choice 'c' is correct. Investment assets of a taxpayer that are not inventory are capital assets. The manufacturing company would have capital assets including an investment in U.S. Treasury bonds.

Choice 'a' is incorrect. Accounts receivable generated from the sale of inventory are excluded from the statutory definition of capital assets.

Choice 'b' is incorrect. Depreciable property used in a trade or business is excluded from the statutory definition of capital assets.

Choice 'd' is incorrect. Land is usually a capital asset, but when it is effectively inventory, as when it is used by a developer to be subdivided, it is excluded from the statutory definition of capital assets.


by Daron at May 07, 2022, 08:25 AM

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Winfred
4 months ago
Totally agree with B and D being capital assets!
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Alethea
4 months ago
Wait, can you really count U.S. Treasury bonds as capital assets?
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Bette
4 months ago
A is not a capital asset, just accounts receivable.
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Crissy
4 months ago
I think D is also a capital asset, right?
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Veronica
5 months ago
Definitely B, that's classic capital asset stuff.
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Janna
5 months ago
Ah, I think I know the answer to this one. A SiL test environment is all about simulating the internal signals and behaviors of the test object, so I'm going to go with option A.
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Sheridan
5 months ago
Solvency ratio? I think that's total assets divided by total liabilities. Always double-check the numbers carefully.
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Tracie
5 months ago
I remember that we discussed how sizing based on application needs could be crucial, but I'm not sure if that's option C or D.
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Tamra
5 months ago
I have a feeling the XDPING utility might be the right choice here since it deals with connectivity problems.
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