Question 1

Which of the following statements about sales and use taxes is true?

Accepted Answer

A)  If an individual pays a sales tax on the purchase of an item, she will not have to pay a use tax on the purchase. 
B)  An individual must pay both a sales tax and a use tax on the taxable purchase of an item. 
C)  Many states that impose a sales tax do not impose a complementary use tax. 
D)  None of the above is true. 
A)  If an individual pays a sales tax on the purchase of an item, she will not have to pay a use tax on the purchase. 
B)  An individual must pay both a sales tax and a use tax on the taxable purchase of an item. 
C)  Many states that impose a sales tax do not impose a complementary use tax. 
D)  None of the above is true.

Question 2

The federal government does not levy property taxes or a general sales tax.

Accepted Answer

A) True 
 B)False

Question 3

Government Q imposes a net income tax on businesses operating within its jurisdiction. The tax equals 3% of income up to $500,000 and 5% of income in excess of $500,000. Company K generated $782,000 net income this year. Compute the income tax that Company K owes to Q.

Accepted Answer

A)  $29,100 
B)  $14,100 
C)  $39,100 
D)  None of the above 
A)  $29,100 
B)  $14,100 
C)  $39,100 
D)  None of the above

Question 4

Mr Dodd resides in a state with a 6% sales and use tax. He recently traveled to another state to buy furniture and paid that state's 4% sales tax. Which of the following statements is true?

Accepted Answer

A)  Mr. Dodd's use tax liability to his home state equals 2% of the purchase price of the furniture. 
B)  Mr. Dodd does not owe a use tax to his home state. 
C)  Mr. Dodd's use tax liability to his home state equals 6% of the purchase price of the furniture. 
D)  None of the above is true. 
A)  Mr. Dodd's use tax liability to his home state equals 2% of the purchase price of the furniture. 
B)  Mr. Dodd does not owe a use tax to his home state. 
C)  Mr. Dodd's use tax liability to his home state equals 6% of the purchase price of the furniture. 
D)  None of the above is true.

Question 5

Mrs King is a U.S. citizen who permanently resides in South Africa. Which of the following statements is true?

Accepted Answer

A)  The U.S. government has jurisdiction to tax Mrs King. 
B)  The U.S. government has no jurisdiction to tax Mrs King because she does not live in the United States. 
C)  The U.S. government has no jurisdiction to tax Mrs King because she does not earn any income from a source within the United States. 
D)  Mrs King can elect whether to pay tax to the United States or to South Africa. 
A)  The U.S. government has jurisdiction to tax Mrs King. 
B)  The U.S. government has no jurisdiction to tax Mrs King because she does not live in the United States. 
C)  The U.S. government has no jurisdiction to tax Mrs King because she does not earn any income from a source within the United States. 
D)  Mrs King can elect whether to pay tax to the United States or to South Africa.

Question 6

A sales tax is an example of a transaction-based tax.

Accepted Answer

A) True 
 B)False

Question 7

The incidence of a state sales tax levied on the purchase of retail goods is:

Accepted Answer

A)  Borne by the ultimate purchaser of the goods. 
B)  Borne by the seller who must collect and remit the tax. 
C)  Borne by the manufacturer of the goods. 
D)  Borne by the government that levies the tax. 
A)  Borne by the ultimate purchaser of the goods. 
B)  Borne by the seller who must collect and remit the tax. 
C)  Borne by the manufacturer of the goods. 
D)  Borne by the government that levies the tax.

Question 8

Which of the following taxes is generally the most significant source of revenue for local governments?

Accepted Answer

A)  Real property tax 
B)  Employment tax 
C)  Income tax 
D)  None of the above 
A)  Real property tax 
B)  Employment tax 
C)  Income tax 
D)  None of the above

Question 9

Which of the following statements concerning sales taxes is false?

Accepted Answer

A)  Sales taxes apply to the purchase of most types of consumer goods. 
B)  Sales taxes apply to the purchase of most types of consumer services. 
C)  Sales taxes are collected by the seller when the sale is made. 
D)  Sales taxes imposed on the purchaser of retail items are consumption taxes. 
A)  Sales taxes apply to the purchase of most types of consumer goods. 
B)  Sales taxes apply to the purchase of most types of consumer services. 
C)  Sales taxes are collected by the seller when the sale is made. 
D)  Sales taxes imposed on the purchaser of retail items are consumption taxes.

Question 10

Richton Company operates its business solely in Jurisdiction H, which levies a 6% sales and use tax. This year, Richton paid $1,438,000 to purchase tangible property from a dealer located in Jurisdiction W. This purchase was subject to W's 3.5% sales tax. The property was shipped to Richton's office in Jurisdiction H for use in its business. Compute Richton's sales or use tax with respect to this transaction.

Accepted Answer

Richton must pay $50,330 sales

Question 11

Which of the following does not characterize federal transfer taxes?

Accepted Answer

A)  The tax is imposed on the value of wealth transferred by an individual as a gift. 
B)  The tax is imposed on the value of wealth transferred because of the death of an individual. 
C)  The tax is imposed on the value of wealth transferred by an individual to charity. 
D)  All of the above characterize federal transfer taxes. 
A)  The tax is imposed on the value of wealth transferred by an individual as a gift. 
B)  The tax is imposed on the value of wealth transferred because of the death of an individual. 
C)  The tax is imposed on the value of wealth transferred by an individual to charity. 
D)  All of the above characterize federal transfer taxes.

Question 12

Acme Inc.'s property taxes increased by $65,000 this year. As a result, Acme increased the sale prices of its products to generate $65,000 more revenue. Who bears the incidence of the corporate tax increase?

Accepted Answer

A)  Acme Inc. 
B)  Acme's customers. 
C)  Acme's employees. 
D)  Acme's shareholders. 
A)  Acme Inc. 
B)  Acme's customers. 
C)  Acme's employees. 
D)  Acme's shareholders.

Question 13

Under U.S. tax law, corporations are entities separate and distinct from their shareholders.

Accepted Answer

A) True 
 B)False

Question 14

The city of Springvale imposes a net income tax on businesses operating within its jurisdiction. The tax equals 1% of income up to $100,000 and 1.5% of income in excess of $100,000. The Springvale Bar and Grill generated $782,000 net income this year. Compute its city income tax.

Accepted Answer

A)  $10,230 
B)  $11,230 
C)  $11,730 
D)  None of the above 
A)  $10,230 
B)  $11,230 
C)  $11,730 
D)  None of the above

Question 15

Which of the following is an example of an activity-based tax?

Accepted Answer

A)  A tax on business' net income 
B)  An excise tax 
C)  A gift tax on the transfer of assets by gift 
D)  Both a tax on business' net income and a gift tax on the transfer of assets by gift 
A)  A tax on business' net income 
B)  An excise tax 
C)  A gift tax on the transfer of assets by gift 
D)  Both a tax on business' net income and a gift tax on the transfer of assets by gift

Question 16

Sellers of retail goods are responsible for collecting sales tax from their customers and remitting the tax to the state government.

Accepted Answer

A) True 
 B)False

Question 17

According to the U.S. Supreme Court, businesses that sell over the internet must collect sales tax only from purchasers living in a state in which the business has a physical presence.

Accepted Answer

A) True 
 B)False

Question 18

When did the federal income tax become a permanent tax?

Accepted Answer

A)  Immediately after the Revolutionary War 
B)  During the Civil War 
C)  In 1913 when the Sixteenth Amendment to the U.S. Constitution was ratified 
D)  In 1939 when Congress enacted the first Internal Revenue Code 
A)  Immediately after the Revolutionary War 
B)  During the Civil War 
C)  In 1913 when the Sixteenth Amendment to the U.S. Constitution was ratified 
D)  In 1939 when Congress enacted the first Internal Revenue Code

Question 19

A state government may levy either a sales tax or a use tax on consumers but not both.

Accepted Answer

A) True 
 B)False

Question 20

The state of Virginia charges motorists 50 cents for every trip across a toll bridge over the James River. This charge is an example of a(n):

Accepted Answer

A)  User's fee 
B)  Transaction-based tax 
C)  Activity-based tax 
D)  Excise tax 
A)  User's fee 
B)  Transaction-based tax 
C)  Activity-based tax 
D)  Excise tax

Which of the following statements about sales and use taxes is true?

The federal government does not levy property taxes or a general sales tax.

Government Q imposes a net income tax on businesses operating within its jurisdiction. The tax equals 3% of income up to $500,000 and 5% of income in excess of $500,000. Company K generated $782,000 net income this year. Compute the income tax that Company K owes to Q.

Mr Dodd resides in a state with a 6% sales and use tax. He recently traveled to another state to buy furniture and paid that state's 4% sales tax. Which of the following statements is true?

Mrs King is a U.S. citizen who permanently resides in South Africa. Which of the following statements is true?

A sales tax is an example of a transaction-based tax.

The incidence of a state sales tax levied on the purchase of retail goods is:

Which of the following taxes is generally the most significant source of revenue for local governments?

Which of the following statements concerning sales taxes is false?

Which of the following does not characterize federal transfer taxes?

Acme Inc.'s property taxes increased by $65,000 this year. As a result, Acme increased the sale prices of its products to generate $65,000 more revenue. Who bears the incidence of the corporate tax increase?

Under U.S. tax law, corporations are entities separate and distinct from their shareholders.

The city of Springvale imposes a net income tax on businesses operating within its jurisdiction. The tax equals 1% of income up to $100,000 and 1.5% of income in excess of $100,000. The Springvale Bar and Grill generated $782,000 net income this year. Compute its city income tax.

Which of the following is an example of an activity-based tax?

Sellers of retail goods are responsible for collecting sales tax from their customers and remitting the tax to the state government.

According to the U.S. Supreme Court, businesses that sell over the internet must collect sales tax only from purchasers living in a state in which the business has a physical presence.

When did the federal income tax become a permanent tax?

A state government may levy either a sales tax or a use tax on consumers but not both.

The state of Virginia charges motorists 50 cents for every trip across a toll bridge over the James River. This charge is an example of a(n):

Policy Standards for a Good Tax

Taxes as Transaction Costs

Maxims of Income Tax Planning

Tax Research

Taxable Income from Business Operations

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Nontaxable Exchanges

Sole Proprietorships

The Corporate Taxpayer

The Choice of Business Entity

Jurisdictional Issues in Business Taxation

The Individual Tax Formula

Compensation and Retirement Planning

Investment and Personal Financial Planning

Tax Consequences of Personal Activities

The Tax Compliance Process

Filters

Exam 1: Taxes and Taxing Jurisdictions

Which of the following statements about sales and use taxes is true?

The federal government does not levy property taxes or a general sales tax.

Government Q imposes a net income tax on businesses operating within its jurisdiction. The tax equals 3% of income up to $500,000 and 5% of income in excess of $500,000. Company K generated $782,000 net income this year. Compute the income tax that Company K owes to Q.

Mr Dodd resides in a state with a 6% sales and use tax. He recently traveled to another state to buy furniture and paid that state's 4% sales tax. Which of the following statements is true?

Mrs King is a U.S. citizen who permanently resides in South Africa. Which of the following statements is true?

A sales tax is an example of a transaction-based tax.

The incidence of a state sales tax levied on the purchase of retail goods is:

Which of the following taxes is generally the most significant source of revenue for local governments?

Which of the following statements concerning sales taxes is false?

Which of the following does not characterize federal transfer taxes?

Acme Inc.'s property taxes increased by $65,000 this year. As a result, Acme increased the sale prices of its products to generate $65,000 more revenue. Who bears the incidence of the corporate tax increase?

Under U.S. tax law, corporations are entities separate and distinct from their shareholders.

The city of Springvale imposes a net income tax on businesses operating within its jurisdiction. The tax equals 1% of income up to $100,000 and 1.5% of income in excess of $100,000. The Springvale Bar and Grill generated $782,000 net income this year. Compute its city income tax.

Which of the following is an example of an activity-based tax?

Sellers of retail goods are responsible for collecting sales tax from their customers and remitting the tax to the state government.

According to the U.S. Supreme Court, businesses that sell over the internet must collect sales tax only from purchasers living in a state in which the business has a physical presence.

When did the federal income tax become a permanent tax?

A state government may levy either a sales tax or a use tax on consumers but not both.

The state of Virginia charges motorists 50 cents for every trip across a toll bridge over the James River. This charge is an example of a(n):

Policy Standards for a Good Tax

Taxes as Transaction Costs

Maxims of Income Tax Planning

Tax Research

Taxable Income from Business Operations

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Nontaxable Exchanges

Sole Proprietorships

The Corporate Taxpayer

The Choice of Business Entity

Jurisdictional Issues in Business Taxation

The Individual Tax Formula

Compensation and Retirement Planning

Investment and Personal Financial Planning

Tax Consequences of Personal Activities

The Tax Compliance Process

Filters