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Question

Accounting for self-employed borrowers.

Submitted: 23 days and 7 hours ago.
Category: Finance
Value: $25
Status: CLOSED
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Some are answerd and wantee confirmation. Need it asap. Thanks

Posted by RD 23 days and 7 hours ago.

Info Request

What is your question?

23 days and 7 hours ago.

Reply

Need to attach questions

Posted by RD 23 days and 7 hours ago.

Info Request

I am online for another 10-15 minutes if you want to send in your questions......

23 days and 7 hours ago.

Reply

 

Question 1

Which method of accounting means that income is recorded when the service is performed or goods are shipped?

Choose one answer.

 

a. Cash basis

 

b. Accrual basis

 

c. Credit basis

 

d. Income basis

Question 2

Withdrawals or distributions of assets, rather than cash, are generally considered ____________________.

Choose one answer.

 

a. capital gains

 

b. a return of investment

 

c. asset income

 

d. net income

Question 3

You should use caution when using an ___________ Balance Sheet.

Choose one answer.

 

a. outdated

 

b. audited

 

c. unaudited

 

d. corporate

Question 4

_______ line items on page 2 of the 1040 tax form should be added to borrower's cash flow.

Choose one answer.

 

a. Credit

 

b. Tax

 

c. No

 

d. All

Question 5

Which type of business structure does the owner have unlimited liability?

Choose one answer.

 

a. Sole proprietorship

 

b. Partnership

 

c. Limited liability corporation

 

d. S Corporation

23 days and 7 hours ago.

Reply

Question 6

Cash flow received from rental properties is listed on __________ of the 1040 tax form.

Choose one answer.

 

a. Schedule B

 

b. Schedule C

 

c. Schedule E

 

d. Schedule K-1

Question 7

Corporate earnings may be used to qualify a borrower only when the borrower can document ______ % ownership of the business.

Choose one answer.

 

a. 25%

 

b. 50%

 

c. 75%

 

d. 100%

Question 8

The corporation balance sheet on the 1120S and 1120 tax form is located on the ___________________.

Choose one answer.

 

a. Schedule K

 

b. Schedule L

 

c. Schedule I

 

d. Schedule II

Question 9

If the borrower is a current homeowner, a deduction for mortgage interest should be listed on Schedule ______.

Choose one answer.

 

a. A

 

b. B

 

c. C

 

d. D

Question 10

Depreciation and Depletion are ________ total income.

Choose one answer.

 

a. Subtracted from

 

b. Added to

 

c. Not used as part of

 

d. Figured separately from

23 days and 7 hours ago.

Reply

Question 11

Which is NOT one of the factors considered when determining the viability of a business?

Choose one answer.

 

a. Location of the business

 

b. Nature of the business

 

c. Type of business structure

 

d. Demand for product or service

Question 12

A _________ history of employment is considered stable.

Choose one answer.

 

a. Minimum of 6 months

 

b. 12 months

 

c. 2 year

 

d. 3 year

Question 13

One of the main factors that needs to be evaluated when working with a self employed borrower is: __________.

Choose one answer.

 

a. Marketability of the borrower's business

 

b. Stability of the borrower's business

 

c. Stability of the borrower's assets

 

d. Stability of the borrower's credit

Question 14

Form 2106 details the borrower's _____________ .

Choose one answer.

 

a. interest and dividend income

 

b. capital gains

 

c. self employment tax

 

d. unreimbursed employee expenses

Question 15

Business income from a sole proprietorship will be summarized on line 12 of the 1040 tax return and detailed on Schedule ___________.

Choose one answer.

 

a. A

 

b. B

 

c. C

 

d. F

Question 16

If line 7 (wages, salaries, tips) of the 1040 tax return reflects income, the applicant can not be a _____________.

Choose one answer.

 

a. sole proprietor

 

b. partnership

 

c. corporation

23 days and 7 hours ago.

Reply

 

d. S corporation

Question 17

Define "net profit":

Choose one answer.

 

a. The difference between cash flow and depreciation.

 

b. The difference between depletion and amortization.

 

c. The difference between cash flow and expenses.

 

d. The difference between revenue and expenses.

Question 18

To find an individual's share of partnership interest and income, you must review the _________.

Choose one answer.

 

a. Schedule L

 

b. 1099

 

c. K-1

 

d. Schedule A

Question 19

Projected income is acceptable to use as qualifying income if: ___________.

Choose one answer.

 

a. You have a letter from the employer

 

b. The borrower's employment contract states bonus income applies

 

c. Previous W-2 shows bonus income

 

d. Never acceptable to use projected income

Question 20

The receipt of Alimony must be documented for a minimum of ________.

Choose one answer.

 

a. 1 Month

 

b. 12 months

 

c. 2 years

 

d. 3 years

Question 21

Schedule E of the 1120 tax form displays ______________.

Choose one answer.

 

a. properties owned

 

b. trust income

 

c. capital gains

 

d. salaries paid to officers

Question 22

A self employed borrower is defined as any borrower who has _________% or greater ownership interest in a business.

Choose one answer.

 

a. 20%

 

b. 25%

 

c. 50%

 

d. 75%

 

e. 100%

Question 23

One of the three indicators of employment stability is: _______________.

Choose one answer.

 

a. Previous work experience

 

b. Salary versus hourly pay

 

c. Type of business structure

 

d. Bonus income

Question 24

Which of the following is NOT one of the five typical expense accounts of a business?

Choose one answer.

 

a. Selling expenses

 

b. Federal income taxes owed

 

c. Commisions

 

d. Cost of goods sold

Question 25

Unemployment compensation payments must be subtracted from total income unless ______________________.

Choose one answer.

 

a. The borrower has a minimum of 6 months history.

 

b. There is documentation of the unemployment compensation.

 

c. It is typical for the borrower to be laid off seasonally.

 

d. It is always subtracted from income.

 

Posted by RD 23 days and 7 hours ago.

Answer

Question 1

Which method of accounting means that income is recorded when the service is performed or goods are shipped?

Choose one answer.

 

a. Cash basis

 

b. Accrual basis

 

c. Credit basis

 

d. Income basis

Question 2

Withdrawals or distributions of assets, rather than cash, are generally considered

____________________.

Choose one answer.

 

a. capital gains

 

b. a return of investment

 

c. asset income

 

d. net income

Question 3

You should use caution when using an ___________ Balance Sheet.

Choose one answer.

 

a. outdated

 

b. audited

c. unaudited

 

d. corporate

Question 4

_______ line items on page 2 of the 1040 tax form should be added to borrower's cash flow.

Choose one answer.

 

a. Credit

b. Tax

 

c. No

 

d. All

Question 5

Which type of business structure does the owner have unlimited liability?

Choose one answer.

 

a. Sole proprietorship

 

b. Partnership

 

c. Limited liability corporation

 

d. S Corporation

Let me know if you have any question.

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

Posted by RD 23 days and 7 hours ago.

Answer

You have lot of questions.....I do not think I can help with all

Question 6

Cash flow received from rental properties is listed on __________ of the 1040 tax form.

Choose one answer.

 

a. Schedule B

 

b. Schedule C

 

c. Schedule E

 

d. Schedule K-1

Question 7

Corporate earnings may be used to qualify a borrower only when the borrower can document ______ % ownership of the business.

Choose one answer.

 

a. 25%

 

b. 50%

 

c. 75%

 

d. 100%

Question 8

The corporation balance sheet on the 1120S and 1120 tax form is located on the ___________________.

Choose one answer.

 

a. Schedule K

 

b. Schedule L

 

c. Schedule I

 

d. Schedule II

Question 9

If the borrower is a current homeowner, a deduction for mortgage interest should be listed on Schedule ______.

Choose one answer.

 

a. A

 

b. B

 

c. C

 

d. D

Question 10

Depreciation and Depletion are ________ total income.

Choose one answer.

 

a. Subtracted from

b. Added to

 

c. Not used as part of

 

d. Figured separately from

Posted by RD 23 days and 7 hours ago.

Answer

Question 11

Which is NOT one of the factors considered when determining the viability of a business?

Choose one answer.

 

a. Location of the business

 

b. Nature of the business

c. Type of business structure

 

d. Demand for product or service

Question 12

A _________ history of employment is considered stable.

Choose one answer.

 

a. Minimum of 6 months

 

b. 12 months

 

c. 2 year

 

d. 3 year

Question 13

One of the main factors that needs to be evaluated when working with a self employed borrower is: __________.

Choose one answer.

 

a. Marketability of the borrower's business

 

b. Stability of the borrower's business

 

c. Stability of the borrower's assets

 

d. Stability of the borrower's credit

Question 14

Form 2106 details the borrower's _____________ .

Choose one answer.

 

a. interest and dividend income

 

b. capital gains

 

c. self employment tax

 

d. unreimbursed employee expenses

Question 15

Business income from a sole proprietorship will be summarized on line 12 of the 1040 tax return and detailed on Schedule ___________.

Choose one answer.

 

a. A

 

b. B

 

c. C

 

d. F

Question 16

If line 7 (wages, salaries, tips) of the 1040 tax return reflects income, the applicant can not be a _____________.

Choose one answer.

 

a. sole proprietor

 

b. partnership

 

c. corporation

Accepted Answer

Question 17

Define "net profit":

Choose one answer.

 

a. The difference between cash flow and depreciation.

 

b. The difference between depletion and amortization.

 

c. The difference between cash flow and expenses.

 

d. The difference between revenue and expenses.

Question 18

To find an individual's share of partnership interest and income, you must review the _________.

Choose one answer.

 

a. Schedule L

 

b. 1099

c. K-1

 

d. Schedule A

Question 19

Projected income is acceptable to use as qualifying income if: ___________.

Choose one answer.

 

a. You have a letter from the employer

 

b. The borrower's employment contract states bonus income applies

 

c. Previous W-2 shows bonus income

 

d. Never acceptable to use projected income

Question 20

The receipt of Alimony must be documented for a minimum of ________.

Choose one answer.

 

a. 1 Month

 

b. 12 months

 

c. 2 years

d. 3 years

Question 21

Schedule E of the 1120 tax form displays ______________.

Choose one answer.

 

a. properties owned

 

b. trust income

 

c. capital gains

d. salaries paid to officers

Question 22

A self employed borrower is defined as any borrower who has _________% or greater ownership interest in a business.

Choose one answer.

 

a. 20%

 

b. 25%

 

c. 50%

 

d. 75%

 

e. 100%

Question 23

One of the three indicators of employment stability is: _______________.

Choose one answer.

 

a. Previous work experience

 

b. Salary versus hourly pay

 

c. Type of business structure

 

d. Bonus income

Question 24

Which of the following is NOT one of the five typical expense accounts of a business?

Choose one answer.

 

a. Selling expenses

b. Federal income taxes owed

 

c. Commisions

 

d. Cost of goods sold

Question 25

Unemployment compensation payments must be subtracted from total income unless ______________________.

Choose one answer.

 

a. The borrower has a minimum of 6 months history.

 

b. There is documentation of the unemployment compensation.

 

c. It is typical for the borrower to be laid off seasonally.

 

d. It is always subtracted from income.

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Expert: RD
Pos. Feedback: 99.3 %
Accepts: 
Answered: 10/29/2009

Certified Public Accountant (CPA)

MBA, CPA

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