Question 1

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

Accepted Answer

A)  Borne by the ultimate consumer 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 consumer 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 2

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 3

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 4

The U.S. Constitution gives the federal government the power to impose a tax on income from whatever source derived.

Accepted Answer

A) True 
 B)False

Question 5

Ms. Penser resides in the city of Lanock, Tennessee. She owns 100% of the stock of PSW Inc., which is incorporated under Tennessee law and conducts business in six different local jurisdictions in Tennessee.
A. How many taxpayers are identified in the above statement of facts?
A. Ms. Penser is an individual taxpayer, and PSW Inc. is a corporate taxpayer. The city of Lanock, the state of Tennessee, and the United States have jurisdiction to tax Ms. Penser.
B. Identify the governments with jurisdiction to tax each of these taxpayers.
B. The six local jurisdictions, the state of Tennessee, and the United States have jurisdiction to tax PSW Inc.

Accepted Answer

A. Ms. Penser is an individual taxpayer,

Question 6

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 7

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 8

Mrs. Renfru is a Brazilian citizen who permanently resides in Houston, Texas. Which of the following statements is true?

Accepted Answer

A)  The U.S. government has no jurisdiction to tax Mrs. Renfru because she is not a U.S. citizen. 
B)  The U.S. government has jurisdiction to tax Mrs. Renfru only on income that she earns from a source within the United States. 
C)  The U.S. government has jurisdiction to tax Mrs. Renfru. 
D)  Mrs. Renfru can elect whether to pay tax to the United States or to Brazil. 
A)  The U.S. government has no jurisdiction to tax Mrs. Renfru because she is not a U.S. citizen. 
B)  The U.S. government has jurisdiction to tax Mrs. Renfru only on income that she earns from a source within the United States. 
C)  The U.S. government has jurisdiction to tax Mrs. Renfru. 
D)  Mrs. Renfru can elect whether to pay tax to the United States or to Brazil.

Question 9

Forrest Township levies a tax on the assessed value of real property located within the town limits. The tax equals 1.4% of the value up to $300,000 plus 2% of any value in excess of $300,000. Mildred Payne owns real estate with a $983,500 assessed value. Compute her property tax.

Accepted Answer

Mildred's property t

Question 10

How often does Congress amend the Internal Revenue Code?

Accepted Answer

A)  Rarely (the Internal Revenue Code has not been amended since 1986) 
B)  Occasionally (perhaps once every decade) 
C)  Regularly (at least once every five years) 
D)  Constantly (at least once a year) 
A)  Rarely (the Internal Revenue Code has not been amended since 1986) 
B)  Occasionally (perhaps once every decade) 
C)  Regularly (at least once every five years) 
D)  Constantly (at least once a year)

Question 11

A tax on net income is an example of a transaction-based tax.

Accepted Answer

A) True 
 B)False

Question 12

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 13

Which of the following statements concerning property taxes is false?

Accepted Answer

A)  Property taxes are ad valorem taxes. 
B)  Property taxes are the primary source of revenue for local governments. 
C)  Property taxes can be levied on realty or personalty. 
D)  None of the above is false. 
A)  Property taxes are ad valorem taxes. 
B)  Property taxes are the primary source of revenue for local governments. 
C)  Property taxes can be levied on realty or personalty. 
D)  None of the above is false.

Question 14

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 15

A tax is a payment to support the cost of government.

Accepted Answer

A) True 
 B)False

Question 16

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 17

Which of the following statements about the Internal Revenue Code is false?

Accepted Answer

A)  The Internal Revenue Code has not been amended since 1986. 
B)  The Internal Revenue Code is part of federal statutory law. 
C)  The Internal Revenue Code consists of numerically organized sections. 
D)  Only Congress has the authority to amend the Internal Revenue Code. 
A)  The Internal Revenue Code has not been amended since 1986. 
B)  The Internal Revenue Code is part of federal statutory law. 
C)  The Internal Revenue Code consists of numerically organized sections. 
D)  Only Congress has the authority to amend the Internal Revenue Code.

Question 18

Which of the following is an earmarked tax?

Accepted Answer

A)  A tax imposed on the purchase of specific items such as liquor or cigarettes 
B)  A tax that generates revenues that the government can spend only to build more National Parks 
C)  A tax imposed only on individuals who earn more than $1 million annually 
D)  A tax that generates revenues that the government can spend for any purpose 
A)  A tax imposed on the purchase of specific items such as liquor or cigarettes 
B)  A tax that generates revenues that the government can spend only to build more National Parks 
C)  A tax imposed only on individuals who earn more than $1 million annually 
D)  A tax that generates revenues that the government can spend for any purpose

Question 19

Which of the following characterizes a good tax base?

Accepted Answer

A)  The base can be easily expressed in monetary terms. 
B)  Taxpayers cannot easily avoid or conceal the base. 
C)  Taxpayers cannot easily move the base from one jurisdiction to another. 
D)  All of the above characterize a good tax base. 
A)  The base can be easily expressed in monetary terms. 
B)  Taxpayers cannot easily avoid or conceal the base. 
C)  Taxpayers cannot easily move the base from one jurisdiction to another. 
D)  All of the above characterize a good tax base.

Question 20

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.

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

Which of the following statements regarding tax systems is false?

The U.S. Constitution gives the federal government the power to impose a tax on income from whatever source derived.

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

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?

Mrs. Renfru is a Brazilian citizen who permanently resides in Houston, Texas. Which of the following statements is true?

Forrest Township levies a tax on the assessed value of real property located within the town limits. The tax equals 1.4% of the value up to $300,000 plus 2% of any value in excess of $300,000. Mildred Payne owns real estate with a $983,500 assessed value. Compute her property tax.

How often does Congress amend the Internal Revenue Code?

A tax on net income is an example of a transaction-based tax.

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

Which of the following statements concerning property taxes is false?

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

A tax is a payment to support the cost of government.

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.

Which of the following statements about the Internal Revenue Code is false?

Which of the following is an earmarked tax?

Which of the following characterizes a good tax base?

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

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

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

Which of the following statements regarding tax systems is false?

The U.S. Constitution gives the federal government the power to impose a tax on income from whatever source derived.

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

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?

Mrs. Renfru is a Brazilian citizen who permanently resides in Houston, Texas. Which of the following statements is true?

Forrest Township levies a tax on the assessed value of real property located within the town limits. The tax equals 1.4% of the value up to $300,000 plus 2% of any value in excess of $300,000. Mildred Payne owns real estate with a $983,500 assessed value. Compute her property tax.

How often does Congress amend the Internal Revenue Code?

A tax on net income is an example of a transaction-based tax.

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

Which of the following statements concerning property taxes is false?

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

A tax is a payment to support the cost of government.

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.

Which of the following statements about the Internal Revenue Code is false?

Which of the following is an earmarked tax?

Which of the following characterizes a good tax base?

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

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