ACC 555 Midterm Exam Answers
Follow Below Link to Download File
Email us for original and Plagiarism Free
Work At ( info.homeworklance@gmail.com ) or order us at
ACC 555 Midterm Exam Answers
1) The
federal income tax is the dominant form of taxation by the federal government.
2) The
Sixteenth Amendment permits the passage of a federal income tax.
3) When
a change in the tax law is deemed necessary by Congress, the entire Internal
Revenue Code must be revised.
4) A
progressive tax rate structure is one where the rate of tax increases as the
tax base increases.
5) The
terms “progressive tax” and “flat tax” are synonymous.
6) A
proportional tax rate is one where the rate of the tax is the same for all
taxpayers, regardless of income levels.
7)
Regressive tax rates decrease as the tax base increases.
8) The
marginal tax rate is useful in tax planning because it measures the tax effect
of a proposed transaction.
9) A
taxpayer’s average tax rate is the tax rate applied to an incremental amount of
taxable income that is added to the tax base.
10) If
a taxpayer’s total tax liability is $30,000, taxable income is $100,000, and
economic income is $120,000, the average tax rate is 30 percent.
11) If
a taxpayer’s total tax liability is $4,000, taxable income is $20,000, and
total economic income is $40,000, then the effective tax rate is 20 percent.
12) All
states impose a state income tax which is generally based on an individual’s
federal adjusted gross income (AGI) with minor adjustments.
13) The
unified transfer tax system, comprised of the gift and estate taxes, is based
upon the total property transfers an individual makes during lifetime and at
death.
14)
Gifts between spouses are generally exempt from transfer taxes.
15) The
primary liability for payment of the gift tax is imposed upon the donee.
16) For
gift tax purposes, a $14,000 annual exclusion per donee is permitted.
17)
Property is generally included on an estate tax return at its historical cost
basis.
18)
Property transferred to the decedent’s spouse is exempt from the estate tax
because of the estate tax marital deduction provision.
19)
Gifts made during a taxpayer’s lifetime may affect the amount of estate tax
paid by the taxpayer’s estate.
20) While
federal and state income taxes as well as the federal gift and estate taxes are
generally progressive in nature, property taxes are proportional.
21)
Adam Smith’s canons of taxation are equity, certainty, convenience and economy.
22)
The primary objective of the federal income tax law is to
achieve various economic and social policy objectives.
23)
Individuals are the principal taxpaying entities in the federal income tax
system.
24) The
various entities in the federal income tax system may be classified into two
general categories, taxpaying entities (such
as individuals and C [regular] corporations) and flow-through entities such as sole
proprietorships, partnerships, S corporations, and limited liability companies.
25) In
2013, dividends paid from most U.S. corporations are taxed at the same rate as
the recipients’ salaries and wages.
26)
Flow-through entities do not have to file tax returns since they are not
taxable entities.
27) S
Corporations result in a single level of taxation.
28) In
a limited liability partnership, a partner is not liable for his partner’s acts
of negligence or misconduct.
29)
Limited liability companies may elect to be taxed as corporations.
30) Limited liability company members (owners)
are responsible for the liabilities of their limited liability company.
31) The tax law encompasses administrative and
judicial interpretations, such as Treasury regulations, revenue rulings,
revenue procedures, and court decisions, as well as statutes.
32) Generally, tax legislation is introduced
first in the Senate and referred to the Senate Finance Committee.
33) The Internal Revenue Service is the branch
of the Treasury Department responsible for administering the federal tax law.
34) Generally, the statute of limitations is
three years from the later of the date the tax return is filed or the due date.
35) Arthur pays tax of $5,000 on taxable
income of $50,000 while taxpayer Barbara pays tax of $12,000 on $120,000. The
tax is a
1. A)
progressive tax.
2. B)
proportional tax.
3. C)
regressive tax.
4. D) None
of the above.
36) Which of the following taxes is
progressive?
1. A)
sales tax
2. B)
excise tax
3. C)
property tax
4. D)
income tax
37) Which of the following taxes is
proportional?
1. A) gift
tax
2. B)
income tax
3. C)
sales tax
4. D) Federal
Insurance Contributions Act (FICA)
38) Which of the following taxes is
regressive?
1. A)
Federal Insurance Contributions Act (FICA)
2. B)
excise tax
3. C)
property tax
4. D) gift
tax
39) Sarah contributes $25,000 to a church.
Sarah’s marginal tax rate is 35% while her average tax rate is 25%. After
considering her tax savings, Sarah’s contribution costs
250.
A) $6,250.
251.
B) $8,750.
252.
C) $16,250.
253.
D) $18,750.
40) Helen, who is single, is considering
purchasing a residence that will provide a $28,000 tax deduction for property
taxes and mortgage interest. If her marginal tax rate is 25% and her effective
tax rate is 20%, what is the amount of Helen’s tax savings from purchasing the
residence?
1. A)
$5,600
2. B)
$7,000
3. C)
$21,000
4. D)
$22,400
Comments
Post a Comment