In Which of the Following Situations Would a PA Still

question 31

Multiple Choice

In which of the following situations would a PA still be considered independent?

• A)The PA received a set of professional-quality,graphite golf clubs from a client as an expression of appreciation for the quality of the work performed.
• B)The PA is suing the client for non-payment of fees.
• C)The fees from one audit client comprise 65% of the PA's total billings for the year.
• D)The PA serves in an honorary and non-participating role as a director for a nonprofit audit client.

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Definitions:

Capital Balance

The amount of money that a company has in its capital account, reflecting the total capital invested by shareholders and retained earnings.

Federal Income Taxes

Taxes imposed by the federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.

Partnership

A sanctioned business setup where a group of individuals co-manage the operation and share the resulting income.

Legal Entity

A legally recognized organization or individual that has rights, responsibilities, and can enter into contracts.