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MHIC Exam 2 with complete verified solutions
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MHIC Exam 2 with complete verified solutions
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MHIC Exam 2 with completeverified solutions 2025-2026
Business Types not Required to have EIN # - answer -sole
proprietorships with no employees
-LLCs with single owner
S corporation - answer a business entity that meets certain
requirements to be able to inherit the protective benefits of being a
corporation, but be taxed as a partnership.
- must be domestically incorporated
- must have only a single type of stock and less than 100
shareholders.
- shareholder distributions are taxed on the individual shareholder
tax returns
- it can pass these incomes to shareholder without having to pay
any fed corporate tax, deemed a "pass through." Owner pays taxes
at their respective tax rate and not the corporate tax rate
Self Employment Tax - answer Tax for individuals that work for
themselves to pay their portion of Social Security and Medicare
benefits.
Requirements to be Classified as IRS Deductible Expense - answer
to be deductible, it must be an "ordinary" and "necessary" expense.
Thus it is an expense that is common in your industry, but is also
helpful/appropriate for your trade or business.
Employment Taxes that are not Withheld from Paychecks - answer -
FUTA
, -State Unemployment tax
FICA - answer - Stands for Federal Insurance Contributions Act
- Employers withhold FICA (social security and Medicare) from
employee paychecks and also pay a matching employer portion.
-Form 941 reconciles this
Franchise tax - answer A tax levied on the right to do business in a
state as a corporation. Although income considerations may come
into play, the tax usually is based on the capitalization of the
corporation.
The Basic Accounting Cycle - answer 1. Classifying and recording
transactions
2. Posting transactions
3. Preparing a trial balance
4. Preparing and adjusted trial balance
5. Preparing financial statements
6. Analyzing financial statements
Who is responsible for providing Personal Protective Equipment
(PPE) - answer Employer
;' Accounting Posting vs. Account - answer - A posting occurs when
a transaction listed in a journal gets transferred to appropriate
accounts. Accounts are an official register of value
The Five Main Type of Posting Accounts - answer 1. Assets
2. Liabilities
3. Equity
4. Income
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