Question 1

A testamentary trust is a trust

Accepted Answer

A)  Intended to protect the assets of a minor. 
B)  That is managed by the trustor. 
C)  That is managed by an estate. 
D)  Established by a living person. 
E)  Established by a will. 
A)  Intended to protect the assets of a minor. 
B)  That is managed by the trustor. 
C)  That is managed by an estate. 
D)  Established by a living person. 
E)  Established by a will. E

Question 2

What is the process of abatement?

Accepted Answer

A)  An attempt to determine the deceased's intentions when the terms of the will are unclear. 
B)  A reduction of various bequests when the estate is not adequate to satisfy them completely. 
C)  Selling of assets included in an estate to be able to pay creditors. 
D)  Payment of the claims of creditors. 
E)  The establishment of how the creditors will be paid. 
A)  An attempt to determine the deceased's intentions when the terms of the will are unclear. 
B)  A reduction of various bequests when the estate is not adequate to satisfy them completely. 
C)  Selling of assets included in an estate to be able to pay creditors. 
D)  Payment of the claims of creditors. 
E)  The establishment of how the creditors will be paid. B

Question 3

Which of the following is normally viewed as an adjustment to the principal of an estate?

Accepted Answer

A)  Ordinary repair expenses. 
B)  Insurance expenses. 
C)  Utility expenses. 
D)  Major repairs to rental property. 
E)  Property taxes. 
A)  Ordinary repair expenses. 
B)  Insurance expenses. 
C)  Utility expenses. 
D)  Major repairs to rental property. 
E)  Property taxes. D

Question 4

In a will, a devise is a

Accepted Answer

A)  Gift of personal property that is directly identified. 
B)  Cash gift from a particular source. 
C)  Gift of estate property that remains after carrying out the other provisions of the will. 
D)  Gift of real property. 
E)  Gift of intangible property. 
A)  Gift of personal property that is directly identified. 
B)  Cash gift from a particular source. 
C)  Gift of estate property that remains after carrying out the other provisions of the will. 
D)  Gift of real property. 
E)  Gift of intangible property.

Question 5

Which of the following is usually accounted for as an adjustment to a trust's principal?

Accepted Answer

A)  Repairs expense. 
B)  Rent expense. 
C)  Investment costs and commissions. 
D)  Insurance expense. 
E)  Property taxes. 
A)  Repairs expense. 
B)  Rent expense. 
C)  Investment costs and commissions. 
D)  Insurance expense. 
E)  Property taxes.

Question 6

What is meant by estate accounting?

Accepted Answer

Estate accounting refers to th

Question 7

The terms of a will currently undergoing probate are: "A gift to my brother David of $25,000 cash; to my son James, $50,000 from my Harbor Savings Bank account; and to my daughter Lila, all of my remaining property." At the time of death, the balance in the savings account was $40,000, and there was additional cash (after payment of funeral expenses and all claims against the estate) of $70,000.
-The decedent resided in a state that treats a demonstrative legacy shortfall as a general legacy.How much would Lila have received from the estate?

Accepted Answer

A)  $ 0. 
B)  $40,000. 
C)  $35,000. 
D)  $45,000. 
E)  $30,000. 
A)  $ 0. 
B)  $40,000. 
C)  $35,000. 
D)  $45,000. 
E)  $30,000.

Question 8

The executor of the Estate of Kate Tweed discovered the following assets (at fair value):
The will of Kate Tweed had the following provisions:
-$195,000 in cash went to Victor Vickery.
-All shares of PepsiCo went to Duchess Doyle.
-The residence went to Louis Tweed.
-All other estate assets were to be liquidated with the resulting cash going to the Sacred Church of Liberty, Missouri.
-Additional debts of $78,000 were discovered.Debts totaling $130,000 were paid.Prepare the journal entry to record the transaction.

Accepted Answer

The answer of The executor of the Estate of Kate...

Question 9

The executor of the Estate of Kate Tweed discovered the following assets (at fair value):
The will of Kate Tweed had the following provisions:
-$195,000 in cash went to Victor Vickery.
-All shares of PepsiCo went to Duchess Doyle.
-The residence went to Louis Tweed.
-All other estate assets were to be liquidated with the resulting cash going to the Sacred Church of Liberty, Missouri.
-The shares of Apple were sold for $145,600.Prepare the journal entry to record the transaction.

Accepted Answer

The answer of The executor of the Estate of Kate...

Question 10

What are the four levels of claims in the order of priority of the Uniform Probate Code?

Accepted Answer

The order of priority is as follows: (1)

Question 11

The executor of Danny Mack's estate has listed the following properties at fair value: Cash $200,000, Life Insurance Receivable $500,000, Investment in Stocks and Bonds $50,000, Rental Property $100,000, and Personal Property $80,000. Additionally, the executor found $100,000 of various debts incurred before the decedent's death. The cost of Danny Mack's funeral was $20,000.
-Prepare a Charge and Discharge Statement for the estate.

Accepted Answer

The answer of The executor of Danny Mack's estate has...

Question 12

Prepare a schedule to show the amount of federal income tax that must be paid.

Accepted Answer

The answer of Prepare a schedule to show the amount...

Question 13

The executor of Danny Mack's estate has listed the following properties at fair value: Cash $200,000, Life Insurance Receivable $500,000, Investment in Stocks and Bonds $50,000, Rental Property $100,000, and Personal Property $80,000. Additionally, the executor found $100,000 of various debts incurred before the decedent's death. The cost of Danny Mack's funeral was $20,000.
-Prepare the journal entry to record the collection of the life insurance policy.

Accepted Answer

The answer of The executor of Danny Mack's estate has...

Question 14

A gift that is specified in a will as "I leave $5,000 in cash to my son" is a

Accepted Answer

A)  General legacy. 
B)  Specific legacy. 
C)  Demonstrative legacy. 
D)  Residual legacy. 
E)  Devise. 
A)  General legacy. 
B)  Specific legacy. 
C)  Demonstrative legacy. 
D)  Residual legacy. 
E)  Devise.

Question 15

The executor of the Estate of Kate Tweed discovered the following assets (at fair value):
The will of Kate Tweed had the following provisions:
-$195,000 in cash went to Victor Vickery.
-All shares of PepsiCo went to Duchess Doyle.
-The residence went to Louis Tweed.
-All other estate assets were to be liquidated with the resulting cash going to the Sacred Church of Liberty, Missouri.
-For the Estate of Kate Tweed, a total amount of interest of $9,100 was collected.
Prepare the journal entry to record the collection.

Accepted Answer

The answer of The executor of the Estate of Kate...

Question 16

The executor of the Estate of Kate Tweed discovered the following assets (at fair value):
The will of Kate Tweed had the following provisions:
-$195,000 in cash went to Victor Vickery.
-All shares of PepsiCo went to Duchess Doyle.
-The residence went to Louis Tweed.
-All other estate assets were to be liquidated with the resulting cash going to the Sacred Church of Liberty, Missouri.
-Assuming an additional savings account of $15,600 was located by the executor, prepare the journal entry required to record the transaction.

Accepted Answer

The answer of The executor of the Estate of Kate...

Question 17

The provisions of a will currently undergoing probate are: "Two thousand shares of Dorn stock to my son; $30,000 in cash from my Atlas Savings Bank account to my brother; $50,000 in cash to my daughter; and any remaining property divided equally between my son and daughter."
-Which of the following is not subtracted to arrive at the taxable value of an estate?

Accepted Answer

A)  Liabilities. 
B)  Charitable bequests. 
C)  Funeral expenses. 
D)  Estate administration expenses. 
E)  Deduction for property conveyed to children of decedent. 
A)  Liabilities. 
B)  Charitable bequests. 
C)  Funeral expenses. 
D)  Estate administration expenses. 
E)  Deduction for property conveyed to children of decedent.

Question 18

In an executor's accounting for an estate, debts and other obligations are recorded

Accepted Answer

A)  At book value. 
B)  As a reduction of income. 
C)  On the date of payment. 
D)  As soon as discovered. 
E)  Only if they are past due. 
A)  At book value. 
B)  As a reduction of income. 
C)  On the date of payment. 
D)  As soon as discovered. 
E)  Only if they are past due.

Question 19

During the current year, an estate generates the following income amounts: Rental income $10,000, Interest income 4,000, Dividend income 6,000.The rental income is conveyed immediately to the beneficiary stated in the decedent's will.Dividends of $2,000 are donated to the decedent's church.What amount of federal income tax must be paid by the estate?

Accepted Answer

The answer of During the current year, an estate generates...

Question 20

The trustor is the

Accepted Answer

A)  Income beneficiary of the trust. 
B)  Ultimate recipient of the principal from the trust. 
C)  Fiduciary who manages the assets in the trust. 
D)  Person who funds the trust. 
E)  Person who disposes of the assets in the trust. 
A)  Income beneficiary of the trust. 
B)  Ultimate recipient of the principal from the trust. 
C)  Fiduciary who manages the assets in the trust. 
D)  Person who funds the trust. 
E)  Person who disposes of the assets in the trust.

Exam 19: A: Accounting for Estates and Trusts

A testamentary trust is a trust

What is the process of abatement?

Which of the following is normally viewed as an adjustment to the principal of an estate?

In a will, a devise is a

Which of the following is usually accounted for as an adjustment to a trust's principal?

What is meant by estate accounting?

What are the four levels of claims in the order of priority of the Uniform Probate Code?

Prepare a schedule to show the amount of federal income tax that must be paid.

A gift that is specified in a will as "I leave $5,000 in cash to my son" is a

In an executor's accounting for an estate, debts and other obligations are recorded

The trustor is the

The Equity Method of Accounting for Investments

A: the Equity Method of Accounting for Investments

Consolidation of Financial Information

A: Consolidation of Financial Information

Consolidations - Subsequent to the Date of Acquisition

A: Consolidations - Subsequent to the Date of Acquisition

Consolidated Financial Statements and Outside Ownership

A: Consolidated Financial Statements and Outside Ownership

Consolidated Financial Statements Intra-Entity Asset Transactions

A: Consolidated Financial Statements Intra-Entity Asset Transactions

Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

A: Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

Consolidated Financial Statements - Ownership Patterns and Income Taxes

A: Consolidated Financial Statements - Ownership Patterns and Income Taxes

Segment and Interim Reporting

A: Segment and Interim Reporting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

A: Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

A: Translation of Foreign Currency Financial Statements

Worldwide Accounting Diversity and International Accounting Standards

A: Worldwide Accounting Diversity and International Accounting Standards

Financial Reporting and the Securities and Exchange Commission

A: Financial Reporting and the Securities and Exchange Commission

Accounting for Legal Reorganizations and Liquidations

A: Accounting for Legal Reorganizations and Liquidations

Partnerships: Formation and Operation

A: Partnerships: Formation and Operation

Partnerships: Termination and Liquidation

A: Partnerships: Termination and Liquidation

Accounting for State and Local Governments, Part I

A: Accounting for State and Local Governments, Part I

Accounting for State and Local Governments, Part II

A: Accounting for State and Local Governments, Part II

Accounting for Not-For-Profit Entities

A: Accounting for Not-For-Profit Entities

Accounting for Estates and Trusts

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