Test Bank for Taxation of Individuals 2020 Edition 11th Edition By Spilker

Test Bank for Taxation of Individuals 2020 Edition 11th Edition By Spilker

Chapter 1   An Introduction to Tax

 1) Taxes influence many types of business decisions but generally do not influence personal decisions.

Answer:  FALSE

Difficulty: 1 Easy

Topic:  Who Cares About Taxes and Why?

Learning Objective:  01-01 Demonstrate how taxes influence basic business, investment, personal, and political decisions.

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Critical Thinking

2) Taxes influence business decisions such as where a business should locate or how a business should be structured.

Answer:  TRUE

Difficulty: 1 Easy

Topic:  Who Cares About Taxes and Why?

Learning Objective:  01-01 Demonstrate how taxes influence basic business, investment, personal, and political decisions.

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Critical Thinking

3) Tax policy rarely plays an important part in presidential campaigns.

Answer:  FALSE

Difficulty: 1 Easy

Topic:  Who Cares About Taxes and Why?

Learning Objective:  01-01 Demonstrate how taxes influence basic business, investment, personal, and political decisions.

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Critical Thinking

4) Margaret recently received a parking ticket. This is a common example of a local tax.

Answer:  FALSE

Difficulty: 1 Easy

Topic:  What Qualifies as a Tax?

Learning Objective:  01-02 Discuss what constitutes a tax and the general objectives of taxes.

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Critical Thinking

5) George recently paid $50 to renew his driver’s license. The $50 payment is considered a tax.

Answer:  FALSE

Explanation:  A tax is a payment required by a government that is unrelated to any specific benefit or service received by the government.

Difficulty: 1 Easy

Topic:  What Qualifies as a Tax?

Learning Objective:  01-02 Discuss what constitutes a tax and the general objectives of taxes.

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Critical Thinking

6) A 1 percent charge imposed by a local government on football tickets sold is not considered a tax if all proceeds are earmarked to fund local schools.

Answer:  FALSE

Difficulty: 2 Medium

Topic:  What Qualifies as a Tax?

Learning Objective:  01-02 Discuss what constitutes a tax and the general objectives of taxes.

Bloom’s:  Understand

AACSB:  Reflective Thinking

AICPA:  BB Critical Thinking

7) One key characteristic of a tax is that it is a required payment to a governmental agency.

Answer:  TRUE

Difficulty: 2 Medium

Topic:  What Qualifies as a Tax?

Learning Objective:  01-02 Discuss what constitutes a tax and the general objectives of taxes.

Bloom’s:  Analyze

AACSB:  Reflective Thinking

AICPA:  BB Critical Thinking

8) Common examples of sin taxes include the taxes imposed on airline tickets and gasoline.

Answer:  FALSE

Difficulty: 2 Medium

Topic:  What Qualifies as a Tax?

Learning Objective:  01-02 Discuss what constitutes a tax and the general objectives of taxes.

Bloom’s:  Analyze

AACSB:  Reflective Thinking

AICPA:  BB Critical Thinking

9) One benefit of a sin tax (e.g., a tax on cigarettes) is that it should increase the demand for the products being taxed.

Answer:  FALSE

Difficulty: 2 Medium

Topic:  What Qualifies as a Tax?

Learning Objective:  01-02 Discuss what constitutes a tax and the general objectives of taxes.

Bloom’s:  Analyze

AACSB:  Reflective Thinking

AICPA:  BB Critical Thinking