SOFE SOFE Certification SOFE-CFE Questions & Answers

• Question 371:

  The evaluation of the realizability of ___________assets is made on a gross as opposed to a net basis

  A. Tax rate

  B. valuation tax

  C. deferred tax

  D. segregated

  Correct Answer: C

• Question 372:

  Permanent differences affect current and deferred balances; temporary differences only affect tax expense.

  A. True

  B. False

  Correct Answer: B

• Question 373:

  Which of the following is NOT the step in determining deferred tax assets and liabilities?

  A. Identification

  B. Measurement

  C. Reduction

  D. Valuation

  Correct Answer: D

• Question 374:

  Which payments are not deductible in the year of accrual and only taken as a tax deduction when paid, unless the payment is made within 2fi months following the year of accrual?

  A. Retained earning

  B. Accrued compensation

  C. Paid-In capital

  D. Bond compensation

  Correct Answer: B

• Question 375:

  Events recognized in the financial statements that do not have tax consequences are commonly referred to as:

  A. permanent differences

  B. Taxed discount

  C. paid differences

  D. Unearned premium reserves

  Correct Answer: A

• Question 376:

  Financial statement carrying amount exceeds tax basis for liabilities in:

  A. Deferred liabilities

  B. Tax-basis balance sheet

  C. Future taxable amounts

  D. Future deductible amounts

  Correct Answer: D

• Question 377:

  Gains and losses are recognized for tax purposes until they are realized.

  A. True

  B. False

  Correct Answer: B

• Question 378:

  Financial statement carrying amount exceeds tax basis for assets in:

  A. Financial taxable amounts

  B. Tax-basis balance sheet

  C. Future taxable amounts

  D. Loss reserves

  Correct Answer: C

• Question 379:

  What must be unconditional, irrevocable, and contain an evergreen clause that automatically renews in the absence of prior written notice of non-renewal?

  A. Trust fund

  B. Letter of credit

  C. Approved securities

  D. None of the above

  Correct Answer: B

• Question 380:

  The penalty for reinsurance is carried as a liability in the balance sheet and is a hybrid of:

  A. unauthorized reinsurance

  B. overdue reinsurance

  C. Both A and B

  D. Neither A nor B

  Correct Answer: C