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Taxation for Decision
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Makers, 2020 10th Edition
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TEST BANK
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E_DA
Shirley Dennis-Escoffier, Karen A. Fortin
CPO
Comprehensive Test Bank for Instructors and
Students
PNR
||| ||| || ||| || | || ||| | || ||| |
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9781119562108
© Shirley Dennis-Escoffier & Karen A. Fortin. All
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rights reserved. Reproduction or distribution without
permission is prohibited.
DE?U
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© MEDGEEK
,TU S
TABLE OF CONTENTS
Test Bank – Taxation for Decision Makers, 2020 (10th Edition)
Authors: Shirley Dennis-Escoffier and Karen A. Fortin
ISBN: 9781119562108
VI U
PART I: THE TAX ENVIRONMENT
T
Chapter 1: An introduction to taxation
A_V
Chapter 2: The tax practice environment
PART II: INCOME AND COMPENSATION
Chapter 3: Determining gross income
MIA
Chapter 4: Employee compensation
PART III: DEDUCTIONS AND DETERMINATION
E_DA
Chapter 5: Deductions for individuals and tax determination
Chapter 6: Business expenses
PART IV: PROPERTY TRANSACTIONS
CPO
Chapter 7: Property acquisitions and cost recovery deductions
Chapter 8: Property dispositions
Chapter 9: Tax-deferred exchanges
PNR
PART V: BUSINESS ENTITIES AND WEALTH TRANSFER
Chapter 10: Taxation of corporations
Chapter 11: Sole proprietorships and flow-through entities
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Chapter 12: Estates, gifts, and trusts
VIESS
DE?U
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, 4 Taxation for Decision Makers Test Bank
TU S
Chapter 1
Introduction to Taxation
VI U
Note to Instructor: The reference tables in the appendix of the text may be required for a limited number
of answers to the questions and problems in this chapter. This is indicated by ―REFERENCE TABLES
T
REQUIRED‖ after the learning objective.
A_V
True-False: Insert T for True and F for False before the questions.
______ 1. A hidden tax is one that is included with a payment but not specifically identified.
ANSWER True LO 1.1
MIA
DIFFICULTY: Easy
_____ 2. Both sales and use taxes are collected in the state in which the sale takes place.
E_DA
ANSWER False LO 1.1
DIFFICULTY: Easy
_____ 3. The person receiving the gift pays the gift tax.
ANSWER False LO 1.1
CPO
DIFFICULTY: Easy
_____ 4. The value added tax is a type of consumption tax.
PNR
ANSWER True LO 1.1
DIFFICULTY: Easy
_____ 5. The type and degree of connection between a business and a state necessary for a state to
impose a tax is referred to as nexus.
NOO
ANSWER True LO 1.1
DIFFICULTY: Easy
VIESS
_____ 6. The 13th Amendment to the US Constitution that provided for an income tax was ratified in
1916.
ANSWER False LO 1.1
DIFFICULTY: Easy
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_____ 7. Any current changes to the tax laws are now amendments to the Internal Revenue Code of
2018.
ANSWER False LO 1.1
DIFFICULTY: Easy
_____ 8. A flat tax generally would be considered a regressive tax.
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, Chapter 1: Introduction to Taxation 5
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ANSWER False LO 1.2
DIFFICULTY: Easy
_____ 9. Adam Smith’s four canons of taxation are Equity, Certainty, Economy and Convenience.
VI U
ANSWER True LO 1.3
DIFFICULTY: Easy
T
_____ 10. Vertical equity asserts that persons in similar circumstances should face similar tax burdens.
A_V
ANSWER False LO 1.3
DIFFICULTY: Easy
_____ 11. There are three basic taxable entities: the individual, the fiduciary, and the C corporation.
MIA
ANSWER True LO 1.4
DIFFICULTY: Easy
E_DA
_____ 12. All interest paid to a taxpayer must be included in gross income.
ANSWER False LO 1.4
DIFFICULTY: Moderate
_____ 13. The lowest tax rate on the tax rate schedules for taxable incomes is the same for individuals
CPO
and C corporations.
ANSWER False LO 1.4 REFERENCE TABLES REQUIRED
DIFFICULTY: Easy
PNR
_____ 14. A $100 tax deduction is more valuable to a taxpayer than a $100 tax credit.
ANSWER False LO 1.4
DIFFICULTY: Easy
NOO
_____ 15. A corporation incurring a net operating loss in 2018 can only carry that loss forward to offset
profits in future years.
VIESS
ANSWER True LO 1.5
DIFFICULTY: Moderate
_____ 16. All limited liability companies (LLCs) can file their tax returns as partnerships.
ANSWER False LO 1.5
DE?U
DIFFICULTY: Moderate
_____ 17. Partnerships and S corporations are flow-through entities.
ANSWER True LO 1.5
DIFFICULTY: Easy
R?
TU S
Taxation for Decision
VI U
Makers, 2020 10th Edition
T
A_V
TEST BANK
MIA
E_DA
Shirley Dennis-Escoffier, Karen A. Fortin
CPO
Comprehensive Test Bank for Instructors and
Students
PNR
||| ||| || ||| || | || ||| | || ||| |
NOO
9781119562108
© Shirley Dennis-Escoffier & Karen A. Fortin. All
VIESS
rights reserved. Reproduction or distribution without
permission is prohibited.
DE?U
R?
© MEDGEEK
,TU S
TABLE OF CONTENTS
Test Bank – Taxation for Decision Makers, 2020 (10th Edition)
Authors: Shirley Dennis-Escoffier and Karen A. Fortin
ISBN: 9781119562108
VI U
PART I: THE TAX ENVIRONMENT
T
Chapter 1: An introduction to taxation
A_V
Chapter 2: The tax practice environment
PART II: INCOME AND COMPENSATION
Chapter 3: Determining gross income
MIA
Chapter 4: Employee compensation
PART III: DEDUCTIONS AND DETERMINATION
E_DA
Chapter 5: Deductions for individuals and tax determination
Chapter 6: Business expenses
PART IV: PROPERTY TRANSACTIONS
CPO
Chapter 7: Property acquisitions and cost recovery deductions
Chapter 8: Property dispositions
Chapter 9: Tax-deferred exchanges
PNR
PART V: BUSINESS ENTITIES AND WEALTH TRANSFER
Chapter 10: Taxation of corporations
Chapter 11: Sole proprietorships and flow-through entities
NOO
Chapter 12: Estates, gifts, and trusts
VIESS
DE?U
R?
, 4 Taxation for Decision Makers Test Bank
TU S
Chapter 1
Introduction to Taxation
VI U
Note to Instructor: The reference tables in the appendix of the text may be required for a limited number
of answers to the questions and problems in this chapter. This is indicated by ―REFERENCE TABLES
T
REQUIRED‖ after the learning objective.
A_V
True-False: Insert T for True and F for False before the questions.
______ 1. A hidden tax is one that is included with a payment but not specifically identified.
ANSWER True LO 1.1
MIA
DIFFICULTY: Easy
_____ 2. Both sales and use taxes are collected in the state in which the sale takes place.
E_DA
ANSWER False LO 1.1
DIFFICULTY: Easy
_____ 3. The person receiving the gift pays the gift tax.
ANSWER False LO 1.1
CPO
DIFFICULTY: Easy
_____ 4. The value added tax is a type of consumption tax.
PNR
ANSWER True LO 1.1
DIFFICULTY: Easy
_____ 5. The type and degree of connection between a business and a state necessary for a state to
impose a tax is referred to as nexus.
NOO
ANSWER True LO 1.1
DIFFICULTY: Easy
VIESS
_____ 6. The 13th Amendment to the US Constitution that provided for an income tax was ratified in
1916.
ANSWER False LO 1.1
DIFFICULTY: Easy
DE?U
_____ 7. Any current changes to the tax laws are now amendments to the Internal Revenue Code of
2018.
ANSWER False LO 1.1
DIFFICULTY: Easy
_____ 8. A flat tax generally would be considered a regressive tax.
R?
, Chapter 1: Introduction to Taxation 5
TU S
ANSWER False LO 1.2
DIFFICULTY: Easy
_____ 9. Adam Smith’s four canons of taxation are Equity, Certainty, Economy and Convenience.
VI U
ANSWER True LO 1.3
DIFFICULTY: Easy
T
_____ 10. Vertical equity asserts that persons in similar circumstances should face similar tax burdens.
A_V
ANSWER False LO 1.3
DIFFICULTY: Easy
_____ 11. There are three basic taxable entities: the individual, the fiduciary, and the C corporation.
MIA
ANSWER True LO 1.4
DIFFICULTY: Easy
E_DA
_____ 12. All interest paid to a taxpayer must be included in gross income.
ANSWER False LO 1.4
DIFFICULTY: Moderate
_____ 13. The lowest tax rate on the tax rate schedules for taxable incomes is the same for individuals
CPO
and C corporations.
ANSWER False LO 1.4 REFERENCE TABLES REQUIRED
DIFFICULTY: Easy
PNR
_____ 14. A $100 tax deduction is more valuable to a taxpayer than a $100 tax credit.
ANSWER False LO 1.4
DIFFICULTY: Easy
NOO
_____ 15. A corporation incurring a net operating loss in 2018 can only carry that loss forward to offset
profits in future years.
VIESS
ANSWER True LO 1.5
DIFFICULTY: Moderate
_____ 16. All limited liability companies (LLCs) can file their tax returns as partnerships.
ANSWER False LO 1.5
DE?U
DIFFICULTY: Moderate
_____ 17. Partnerships and S corporations are flow-through entities.
ANSWER True LO 1.5
DIFFICULTY: Easy
R?
