CPA Exam

The CPA Exam is a comprehensive assessment designed to evaluate the knowledge and skills necessary for a career in accounting.

Structure and Format of the CPA ExamCore Accounting PrinciplesEthics and Professional Responsibility
Auditing Procedures and Risk AssessmentAdvanced Financial ReportingFederal Taxation and Business Law
Applying Accounting Concepts in PracticeTax Planning and ComplianceEthical Decision-Making in Accounting
Effective Study PlanningMastering Multiple-Choice and SimulationsTest Day Preparation and Mindset
Structure and Format...Core Accounting Prin...Ethics and Professio...Auditing Procedures ...Advanced Financial R...Federal Taxation and...Applying Accounting ...Tax Planning and Com...Ethical Decision-Mak...Effective Study Plan...Mastering Multiple-C...Test Day Preparation...
Advanced Topics

Federal Taxation and Business Law

Taxation Principles

Federal taxation covers income, deductions, credits, and tax calculation for individuals and entities. Business law includes contracts, agency, and business structures.

Key Taxation Concepts

  • Gross Income: All income received that is not exempt by law.
  • Deductions and Credits: Reductions to taxable income and tax liability.
  • Entity Taxation: Rules differ for individuals, corporations, partnerships, and estates.

Important Business Law Areas

  • Contracts: Legally enforceable agreements.
  • Agency: Relationships where one party acts on behalf of another.
  • Business Entities: Structuring organizations as corporations, partnerships, LLCs, etc.

Application to the CPA Exam

The REG section tests understanding of tax laws, calculations, and legal responsibilities.

Examples

  • A CPA calculates deductions for a small business client to minimize tax liability.

  • An accountant reviews a partnership agreement to ensure compliance with business laws.

In a Nutshell

Federal taxation and business law are vital for advising clients and ensuring legal compliance.

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Applying Accounting Concepts in Practice