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AICPA CPA-Business Exam Questions
- Topic 1: Auditing and Attestation
- Topic 2: Business Environment and Concepts
- Topic 3: Financial Accounting and Reporting.
Free AICPA CPA-Business Exam Actual Questions
Note: Premium Questions for CPA-Business were last updated On Jun. 17, 2025 (see below)
Harry, Betty, and Jim decide to form a hair salon business. Betty and Jim agree to equally manage the business and have agreed to accept full personal liability for obligations of the business. Harry contributes money to help them get started. Harry does not want any personal liability but does want access to the books and records and to share in the profits. They have all agreed that unanimous consent is needed to transfer their ownership interests. Assume any necessary filings have been made.
What type of business entity best reflects the terms of their agreement?
The three have formed:
Choice 'a' is correct. A limited partnership best reflects the terms of the parties' agreement. A limited partnership has one or more general partners and one or more limited partners. The general partners are personally liable for partnership obligations and run the business (such as Betty and Jim agreed). A limited partner does not have personal liability for partnership obligations and does not take part in management; however, limited partners have a right to inspect partnership books and records relevant to their interest. Thus, a limited partnership has the attributes that Harry agreed to. Finally, all partners must unanimously consent to a transfer of an ownership interest in a limited partnership, as the parties agreed here. Thus, a limited partnership best reflects the agreement of the parties.
Choice 'b' is incorrect. Members of a limited liability company are not personally liable for the company's debt. (They may agree otherwise, but this is not a general attribute of a limited liability company.) Because the facts say Betty and Jim each agreed to have full personal liability, a limited liability company does not best reflect the parties' agreement.
Choice 'c' is incorrect. All partners are personally liable for all obligations of a general partnership. Because the facts say Harry did not accept personal liability, the agreement does not reflect a general partnership.
Choice 'd' is incorrect. Corporate shareholders generally are not liable for the corporation's obligations. (They may agree otherwise, but this is not a basic attribute of a corporation.) As the facts say Betty and Jim share full personal liability, the agreement does not reflect a corporation.
Smith was an officer of CCC Corp. As an officer, the business judgment rule applies to Smith in which of the following ways?
Choice 'b' is correct. The business judgment rule applies to officers as well as directors, who in their capacity, act in a manner the officer believes to be in the best interest of the corporation, and with the care an ordinarily prudent person in a like position would exercise. If the standards of the business judgment rule are met, the officer is not liable to the company for resulting damages.
Choices 'a', 'c', and 'd' are incorrect, per the above rule.
Lisa is a limited partner in a limited partnership. Jen, one of the other limited partners, is seeking to sell her interest in the partnership to Karen and allow Karen to become a new limited partner. Which of the following statements is true?
Choice 'd' is correct. Limited partners have the right to vote on the transfer of interest and admission of a new partner. Admission of a new partner requires unanimous consent.
Choice 'a' is incorrect. A limited partner who acts as a general partner loses her limited liability status to those she acted as a general partner towards.
Choice 'b' is incorrect. Partners can freely transfer their interests in profits and losses to third parties, but the third party cannot become a limited partner without the unanimous consent of the other partners.
Choice 'c' is incorrect. Limited partners must give 6 months notice of withdrawal in absence of an agreement to the contrary.
Considering the SCOR Model of supply chain operations, which of the following key management processes does collecting and processing vendor payments fall into?
Choice 'b' is correct. Once demand has been planned, it is necessary to procure the resources required to meet it and to manage the infrastructure that exists for the sources. Collecting and processing vendor payments falls into the 'source' process.
Choices 'a', 'c', and 'd' are incorrect, per the above Explanation: .
Osgood Products has announced that it plans to finance future investments so that the firm will achieve an optimum capital structure. Which one of the following corporate objectives is consistent with the announcement?
Choice 'c' is correct. The optimal capital structure is the financial structure that would theoretically maximize shareholder wealth by maximizing the net worth of the company.
Choices 'a', 'b', and 'd' are incorrect. Strategies (not objectives) for creating an optimal capital structure to maximize net worth include:
1. Maximizing earnings per share (choice 'a').
2. Minimizing the cost of debt (choice 'b').
3. Minimizing the cost of equity (choice 'd').
4. Maximizing cash flow (choice not given).
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