BUS 3302 TEST 1 QUESTIONS WITH CORRECT ANSWERS

Zero Bracket Amount


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-deduction
-personal exemption
-p. 89

,Biggest Categories of Expenditures


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1. Housing
2. Transportation?
3. Food/Consumption?
4. Utilities?




Taxable v. Tax Exempt


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default risk




Variable Expenses


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food
gas




Is a tax deduction or credit worth more to the higher bracket?


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, DEDUCTION worth more to higher bracket




Simple Interest


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interest earned is not reinvested
= principal x rate x time




Skimming


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not reporting income




Avg. v. Marginal Tax Rates


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Avg:
Marginal:
-when income INCREASES, bracket INCREASES
-only marginal income goes into bracket, so only pay 15% on the income
above 9,325 for example




Short term liabilities