Question 1

A sales tax is an example of an activity-based tax.

Accepted Answer

A) True 
 B)False

Question 2

The Internal Revenue Code is written by the Internal Revenue Service.

Accepted Answer

A) True 
 B)False

Question 3

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 4

Which of the following taxes is a 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 5

A user fee entitles the payer to a specific good or service from the government.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following federal taxes is earmarked for a specific purpose?

Accepted Answer

A)  Corporate income tax 
B)  Employment taxes 
C)  Unemployment taxes 
D)  Both B. and C. are earmarked taxes. 
A)  Corporate income tax 
B)  Employment taxes 
C)  Unemployment taxes 
D)  Both B. and C. are earmarked taxes.

Question 7

Fewer than half of the state governments depend on gambling as a source of revenue.

Accepted Answer

A) True 
 B)False

Question 8

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 9

Which of the following is not considered administrative authority?

Accepted Answer

A)  Treasury regulations 
B)  Revenue rulings 
C)  Tax Court decisions 
D)  All of the above are administrative authorities 
A)  Treasury regulations 
B)  Revenue rulings 
C)  Tax Court decisions 
D)  All of the above are administrative authorities

Question 10

Mr. Smith 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 7% sales tax. Which of the following statements is true?

Accepted Answer

A)  Mr. Smith is entitled to a refund of 1% of the purchase price of the sailboat. 
B)  Mr. Smith does not owe a use tax to his home state. 
C)  Mr. Smith's use tax liability to his home state equals 6% of the purchase price of the sailboat. 
D)  None of the above is true. 
A)  Mr. Smith is entitled to a refund of 1% of the purchase price of the sailboat. 
B)  Mr. Smith does not owe a use tax to his home state. 
C)  Mr. Smith's use tax liability to his home state equals 6% of the purchase price of the sailboat. 
D)  None of the above is true.

Question 11

Treasury regulations are tax laws written by the Treasury Department.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is not characteristic of a tax?

Accepted Answer

A)  A tax is compulsory. 
B)  A tax is intended to punish unacceptable behavior. 
C)  A tax is levied by a government. 
D)  All of the above are characteristics of a tax. 
A)  A tax is compulsory. 
B)  A tax is intended to punish unacceptable behavior. 
C)  A tax is levied by a government. 
D)  All of the above are characteristics of a tax.

Question 13

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 14

What is the major difference between a sales tax and an excise tax?

Accepted Answer

A)  Sales taxes are levied by state governments, while excise taxes are levied only by the federal government. 
B)  Sales taxes are imposed on the purchase of a wide variety of items, while excise taxes are imposed on the purchase of a few specific items. 
C)  Sales taxes must be collected by the seller, while excise taxes must be paid directly by the purchaser. 
D)  Sales taxes are imposed on the purchase of tangible goods, while excise taxes are imposed on the purchase of services. 
A)  Sales taxes are levied by state governments, while excise taxes are levied only by the federal government. 
B)  Sales taxes are imposed on the purchase of a wide variety of items, while excise taxes are imposed on the purchase of a few specific items. 
C)  Sales taxes must be collected by the seller, while excise taxes must be paid directly by the purchaser. 
D)  Sales taxes are imposed on the purchase of tangible goods, while excise taxes are imposed on the purchase of services.

Question 15

Which type of tax is not levied by the federal government?

Accepted Answer

A)  Corporate income tax 
B)  Individual income tax 
C)  Employment taxes 
D)  General sales tax 
A)  Corporate income tax 
B)  Individual income tax 
C)  Employment taxes 
D)  General sales tax

Question 16

The federal government imposed the first income tax to raise money to fight the War of 1812.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements regarding tax systems is false?

Accepted Answer

A)  A single percentage that applies to the entire tax base is described as a flat rate. 
B)  When designing a tax, governments try to identify tax bases that taxpayers can easily avoid or conceal. 
C)  A tax base is an item, occurrence, transaction, or activity with respect to which a tax is levied. 
D)  With regard to tax systems, the term revenue refers to the total tax collected by the government. 
A)  A single percentage that applies to the entire tax base is described as a flat rate. 
B)  When designing a tax, governments try to identify tax bases that taxpayers can easily avoid or conceal. 
C)  A tax base is an item, occurrence, transaction, or activity with respect to which a tax is levied. 
D)  With regard to tax systems, the term revenue refers to the total tax collected by the government.

Question 18

Acme Inc.'s federal income tax increased by $100,000 this year. As a result, Acme reduced the annual dividend paid on its common stock by $100,000. 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 19

Taxes on personal property are more difficult to administer and enforce than taxes on real property.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following does not contribute to the dynamic nature of the tax law?

Accepted Answer

A)  The political pressure from professional lobbyists 
B)  Changes in the economic and social climate 
C)  Changes in revenue needs of the government 
D)  All of the above contribute to the dynamic nature of the tax law 
A)  The political pressure from professional lobbyists 
B)  Changes in the economic and social climate 
C)  Changes in revenue needs of the government 
D)  All of the above contribute to the dynamic nature of the tax law

A sales tax is an example of an activity-based tax.

The Internal Revenue Code is written by the Internal Revenue Service.

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

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

A user fee entitles the payer to a specific good or service from the government.

Which of the following federal taxes is earmarked for a specific purpose?

Fewer than half of the state governments depend on gambling as a source of revenue.

When did the federal income tax become a permanent tax?

Which of the following is not considered administrative authority?

Mr. Smith 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 7% sales tax. Which of the following statements is true?

Treasury regulations are tax laws written by the Treasury Department.

Which of the following is not characteristic of a tax?

What is the major difference between a sales tax and an excise tax?

Which type of tax is not levied by the federal government?

The federal government imposed the first income tax to raise money to fight the War of 1812.

Which of the following statements regarding tax systems is false?

Acme Inc.'s federal income tax increased by $100,000 this year. As a result, Acme reduced the annual dividend paid on its common stock by $100,000. Who bears the incidence of the corporate tax increase?

Taxes on personal property are more difficult to administer and enforce than taxes on real property.

Which of the following does not contribute to the dynamic nature of the tax law?

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, Partnerships, Llcs, and S Corporations

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

A sales tax is an example of an activity-based tax.

The Internal Revenue Code is written by the Internal Revenue Service.

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

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

A user fee entitles the payer to a specific good or service from the government.

Which of the following federal taxes is earmarked for a specific purpose?

Fewer than half of the state governments depend on gambling as a source of revenue.

When did the federal income tax become a permanent tax?

Which of the following is not considered administrative authority?

Mr. Smith 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 7% sales tax. Which of the following statements is true?

Treasury regulations are tax laws written by the Treasury Department.

Which of the following is not characteristic of a tax?

What is the major difference between a sales tax and an excise tax?

Which type of tax is not levied by the federal government?

The federal government imposed the first income tax to raise money to fight the War of 1812.

Which of the following statements regarding tax systems is false?

Acme Inc.'s federal income tax increased by $100,000 this year. As a result, Acme reduced the annual dividend paid on its common stock by $100,000. Who bears the incidence of the corporate tax increase?

Taxes on personal property are more difficult to administer and enforce than taxes on real property.

Which of the following does not contribute to the dynamic nature of the tax law?

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, Partnerships, Llcs, and S Corporations

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