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
