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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 Aug. 07, 2025 (see below)
Para Co. is reviewing the following data relating to an energy saving investment proposal:
What would be the annual savings needed to make the investment realize a 12% yield?
Choice 'c' is correct. The annual savings needed to make the investment realize a 12% yield is where the present value of the cash savings/inflows equals the present value of the net cash outflows. Use algebra to calculate the annual savings, as follows:
Choice 'a' is incorrect. The annual savings needed to make the investment realize a 12% yield is where the present value of the cash savings/inflows equal the present value of the net cash outflows.
Choice 'b' is incorrect. Subtract the present value of $10,000 due in 5 years at 12%, or $10,000 .57 = $5,700. Don't subtract the entire $10,000.
Choice 'd' is incorrect. Subtract the present value of the $10,000 residual value from the $50,000 cost.
In a competitive labor market, a minimum wage that is set above the equilibrium wage will result in which of the following:
Choice 'd' is correct. As illustrated in the graph, a minimum wage that is set above the equilibrium wage results in a decrease in the quantity demanded of labor (falls to LD), an increase in the quantity supplied of labor (increases to LS), and a decrease in total employment (total employment falls from L* to LD).
Choices 'a', 'b', and 'c' are incorrect. All are true, making choice 'd' the only right answer.
If a group of consumers decide to boycott a particular product, the expected result would be:
Choice 'b' is correct. A consumer boycott will decrease demand for the product being boycotted.
Choice 'a' is incorrect. Increasing price will further reduce the quantity demanded. The effect on revenue is uncertain.
Choice 'c' is incorrect. Supply will be unaffected by a boycott.
Choice 'd' is incorrect. A boycott of a particular product will reduce the overall profits of the industry.
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.
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