Question 1

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

Accepted Answer

A) True 
 B)False  False

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. B

Question 3

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 D

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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 6

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 7

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

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A)  General sales tax 
B)  Individual income tax 
C)  Corporate income tax 
D)  All of the above 
A)  General sales tax 
B)  Individual income tax 
C)  Corporate income tax 
D)  All of the above

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements regarding the political process of creating tax law is false?

Accepted Answer

A)  The political process contributes to the dynamic nature of the tax law. 
B)  Special interest groups have little effect on the tax legislative process. 
C)  When taxpayers device a new tactic for reducing their tax burdens, governments respond by enacting a new rule to render the tactic ineffective. 
D)  Changes in political philosophy often reflect shifts in the public attitude about the proper role of taxes in society. 
A)  The political process contributes to the dynamic nature of the tax law. 
B)  Special interest groups have little effect on the tax legislative process. 
C)  When taxpayers device a new tactic for reducing their tax burdens, governments respond by enacting a new rule to render the tactic ineffective. 
D)  Changes in political philosophy often reflect shifts in the public attitude about the proper role of taxes in society.

Question 13

Which of the following is an example of a transaction-based tax?

Accepted Answer

A)  A tax on net business income 
B)  An excise tax 
C)  An estate tax on the transfer of assets at death 
D)  Both B. and C. 
A)  A tax on net business income 
B)  An excise tax 
C)  An estate tax on the transfer of assets at death 
D)  Both B. and C.

Question 14

Company N operates a mail order business out of its headquarters in Tulsa, Oklahoma. This year, it mailed $892,000 worth of product to customers residing in Oklahoma and $489,300 worth of product to customers residing in Missouri. Which of the following statements is true?

Accepted Answer

A)  Company N must collect Oklahoma sales tax from its Oklahoma customers and Missouri sales tax from its Missouri customers. 
B)  Company N must collect Oklahoma sales tax from both its Oklahoma and Missouri customers. 
C)  Company N must collect Oklahoma sales tax from its Oklahoma customers. 
D)  Company D is not required to collect sales tax on any mail order sales. 
A)  Company N must collect Oklahoma sales tax from its Oklahoma customers and Missouri sales tax from its Missouri customers. 
B)  Company N must collect Oklahoma sales tax from both its Oklahoma and Missouri customers. 
C)  Company N must collect Oklahoma sales tax from its Oklahoma customers. 
D)  Company D is not required to collect sales tax on any mail order sales.

Question 15

The majority of state governments raise revenue from both personal and corporate income taxes.

Accepted Answer

A) True 
 B)False

Question 16

A business that operates in more than one state is required to pay state income tax only to the state in which it is incorporated.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is not characteristic of an excise tax?

Accepted Answer

A)  An excise tax is levied on the retail sale of specific goods. 
B)  Excise tax rates typically are higher than general sales tax rates. 
C)  Purchasers of luxury items are responsible for paying any excise tax directly to the government. 
D)  All of the above are characteristics of an excise tax. 
A)  An excise tax is levied on the retail sale of specific goods. 
B)  Excise tax rates typically are higher than general sales tax rates. 
C)  Purchasers of luxury items are responsible for paying any excise tax directly to the government. 
D)  All of the above are characteristics of an excise tax.

Question 18

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 19

Which of the following is/are not a primary source of authority for the tax law?

Accepted Answer

A)  A revenue ruling published by the Internal Revenue Service 
B)  Section 162 of the Internal Revenue Code 
C)  Treasury Reg. §1.351-2 
D)  All of the above are primary sources of authority 
A)  A revenue ruling published by the Internal Revenue Service 
B)  Section 162 of the Internal Revenue Code 
C)  Treasury Reg. §1.351-2 
D)  All of the above are primary sources of authority

Question 20

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.

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

Which of the following statements regarding tax systems is false?

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

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

Which of the following statements concerning property taxes is false?

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.

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

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

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

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

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

Which of the following statements regarding the political process of creating tax law is false?

Which of the following is an example of a transaction-based tax?

Company N operates a mail order business out of its headquarters in Tulsa, Oklahoma. This year, it mailed $892,000 worth of product to customers residing in Oklahoma and $489,300 worth of product to customers residing in Missouri. Which of the following statements is true?

The majority of state governments raise revenue from both personal and corporate income taxes.

A business that operates in more than one state is required to pay state income tax only to the state in which it is incorporated.

Which of the following is not characteristic of an excise tax?

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

Which of the following is/are not a primary source of authority for the tax law?

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

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

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

Which of the following statements regarding tax systems is false?

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

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

Which of the following statements concerning property taxes is false?

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.

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

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

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

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

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

Which of the following statements regarding the political process of creating tax law is false?

Which of the following is an example of a transaction-based tax?

Company N operates a mail order business out of its headquarters in Tulsa, Oklahoma. This year, it mailed $892,000 worth of product to customers residing in Oklahoma and $489,300 worth of product to customers residing in Missouri. Which of the following statements is true?

The majority of state governments raise revenue from both personal and corporate income taxes.

A business that operates in more than one state is required to pay state income tax only to the state in which it is incorporated.

Which of the following is not characteristic of an excise tax?

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

Which of the following is/are not a primary source of authority for the tax law?

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

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