1|Pa ge
Tax I - TEST FINAL EXAM AND PRACTICE EXAM 20262027
BANK 2 VERSIONS QUESTIONS WITH DETAILED VERIFIED
ANSWERS EXAM QUESTIONS WILL COME FROM HERE
(100% CORRECT ANSWERS A+ GRADED
Acme Inc.'s federal income tax increased by $100,000 this year. As a
result, Acme reduced its annual dividend by $100,000. Who bears the
incidence of the corporate tax increase? - ANSWERS--Acme's
shareholders
Acme Inc.'s property taxes increased by $19,000 this year. As a result,
Acme eliminated $19,000 from its budget for the employee Christmas
party. Who bears the incidence of the corporate tax increase? -
ANSWERS--Acme's employees
Acme Inc.'s property taxes increased by $65,000 this year. As a result,
Acme increased the sale prices of its products to generate $65,000
more revenue. Who bears the incidence of the corporate tax increase?
- ANSWERS--Acme's customers
Government Q imposes a net income tax on businesses operating
within its jurisdiction. The tax equals 3% of income up to $500,000 and
5% of income in excess of $500,000. Company K generated $782,000
,2|Pa ge
net income this year. Compute the income tax that Company K owes to
Q. - ANSWERS--$29,100
Mr. Bilboa is a citizen of Portugal. Which of the following statements is
true? - ANSWERS--Both b. and c. are true.
Mr. Dodd resides in a state with a 6% sales and use tax. He recently
traveled to another state to buy a sailboat and paid that state's 4%
sales tax. Which of the following statements is true? - ANSWERS--Mr.
Dodd's use tax liability to his home state equals 2% of the purchase
price of the sailboat.
Mr. Smith resides in a state with a 6% sales and use tax. He recently
traveled to another state to buy furniture and paid that state's 7% sales
tax. Which of the following statements is true? - ANSWERS--Mr. Smith
does not owe a use tax to his home state.
Mrs. King is a U.S. citizen who permanently resides in South Africa.
Which of the following statements is true? - ANSWERS--The U.S.
government has jurisdiction to tax Mrs. King.
Mrs. Renfru is a Brazilian citizen who permanently resides in Houston,
Texas. Which of the following statements is true? - ANSWERS--The U.S.
government has jurisdiction to tax Mrs. Renfru.
,3|Pa ge
The city of Mayfield charges individuals convicted of DWI (driving while
intoxicated) $500 for the first conviction and $2,000 for any subsequent
conviction. These charges are an example of: - ANSWERS--A
government penalty
The city of Springvale imposes a net income tax on businesses
operating within its jurisdiction. The tax equals 1% of income up to
$100,000 and 1.5% of income in excess of $100,000. The Springvale Bar
and Grill generated $782,000 net income this year. Compute its city
income tax. - ANSWERS--$11,230
The incidence of a state sales tax levied on the purchase of retail goods
is: - ANSWERS--Borne by the ultimate consumer of the goods
The property tax on a rent house owned by Mr. Janey increased by
$1,200 this year. Mr. Janey increased the monthly rent charged to his
tenant, Ms. Lacey, by $45. Who bears the incidence of the property tax
increase? - ANSWERS--Both Mr. Janey and Ms. Lacey
The state of Virginia charges motorists 50 cents for every trip across a
toll bridge over the James River. This charge is an example of -
ANSWERS--A user's fee
What gives the federal government the right to impose a tax on
individual and corporate income? - ANSWERS--Sixteenth Amendment
to the U.S Constitution
, 4|Pa ge
What is the major difference between a sales tax and an excise tax? -
ANSWERS--Sales taxes are imposed on the purchase of a wide variety of
items, while excise taxes are imposed on the purchase of a few specific
items.
When did the federal income tax become a permanent tax? -
ANSWERS--In 1913 when the Sixteenth Amendment to the U.S.
Constitution was ratified
Which of the following characterizes a good tax base? - ANSWERS--All
of the above characterize a good tax base.
Which of the following does not characterize federal transfer taxes? -
ANSWERS--The tax is imposed on the value of wealth transferred by an
individual to charity
Which of the following does not characterize federal transfer taxes? -
ANSWERS--All of the above characterize federal transfer taxes
Which of the following federal taxes is earmarked for a specific
purpose? - ANSWERS--"Corporate income tax Employment taxes
Unemployment taxes
Both b. and c. are earmarked taxes (answer) "
Tax I - TEST FINAL EXAM AND PRACTICE EXAM 20262027
BANK 2 VERSIONS QUESTIONS WITH DETAILED VERIFIED
ANSWERS EXAM QUESTIONS WILL COME FROM HERE
(100% CORRECT ANSWERS A+ GRADED
Acme Inc.'s federal income tax increased by $100,000 this year. As a
result, Acme reduced its annual dividend by $100,000. Who bears the
incidence of the corporate tax increase? - ANSWERS--Acme's
shareholders
Acme Inc.'s property taxes increased by $19,000 this year. As a result,
Acme eliminated $19,000 from its budget for the employee Christmas
party. Who bears the incidence of the corporate tax increase? -
ANSWERS--Acme's employees
Acme Inc.'s property taxes increased by $65,000 this year. As a result,
Acme increased the sale prices of its products to generate $65,000
more revenue. Who bears the incidence of the corporate tax increase?
- ANSWERS--Acme's customers
Government Q imposes a net income tax on businesses operating
within its jurisdiction. The tax equals 3% of income up to $500,000 and
5% of income in excess of $500,000. Company K generated $782,000
,2|Pa ge
net income this year. Compute the income tax that Company K owes to
Q. - ANSWERS--$29,100
Mr. Bilboa is a citizen of Portugal. Which of the following statements is
true? - ANSWERS--Both b. and c. are true.
Mr. Dodd resides in a state with a 6% sales and use tax. He recently
traveled to another state to buy a sailboat and paid that state's 4%
sales tax. Which of the following statements is true? - ANSWERS--Mr.
Dodd's use tax liability to his home state equals 2% of the purchase
price of the sailboat.
Mr. Smith resides in a state with a 6% sales and use tax. He recently
traveled to another state to buy furniture and paid that state's 7% sales
tax. Which of the following statements is true? - ANSWERS--Mr. Smith
does not owe a use tax to his home state.
Mrs. King is a U.S. citizen who permanently resides in South Africa.
Which of the following statements is true? - ANSWERS--The U.S.
government has jurisdiction to tax Mrs. King.
Mrs. Renfru is a Brazilian citizen who permanently resides in Houston,
Texas. Which of the following statements is true? - ANSWERS--The U.S.
government has jurisdiction to tax Mrs. Renfru.
,3|Pa ge
The city of Mayfield charges individuals convicted of DWI (driving while
intoxicated) $500 for the first conviction and $2,000 for any subsequent
conviction. These charges are an example of: - ANSWERS--A
government penalty
The city of Springvale imposes a net income tax on businesses
operating within its jurisdiction. The tax equals 1% of income up to
$100,000 and 1.5% of income in excess of $100,000. The Springvale Bar
and Grill generated $782,000 net income this year. Compute its city
income tax. - ANSWERS--$11,230
The incidence of a state sales tax levied on the purchase of retail goods
is: - ANSWERS--Borne by the ultimate consumer of the goods
The property tax on a rent house owned by Mr. Janey increased by
$1,200 this year. Mr. Janey increased the monthly rent charged to his
tenant, Ms. Lacey, by $45. Who bears the incidence of the property tax
increase? - ANSWERS--Both Mr. Janey and Ms. Lacey
The state of Virginia charges motorists 50 cents for every trip across a
toll bridge over the James River. This charge is an example of -
ANSWERS--A user's fee
What gives the federal government the right to impose a tax on
individual and corporate income? - ANSWERS--Sixteenth Amendment
to the U.S Constitution
, 4|Pa ge
What is the major difference between a sales tax and an excise tax? -
ANSWERS--Sales taxes are imposed on the purchase of a wide variety of
items, while excise taxes are imposed on the purchase of a few specific
items.
When did the federal income tax become a permanent tax? -
ANSWERS--In 1913 when the Sixteenth Amendment to the U.S.
Constitution was ratified
Which of the following characterizes a good tax base? - ANSWERS--All
of the above characterize a good tax base.
Which of the following does not characterize federal transfer taxes? -
ANSWERS--The tax is imposed on the value of wealth transferred by an
individual to charity
Which of the following does not characterize federal transfer taxes? -
ANSWERS--All of the above characterize federal transfer taxes
Which of the following federal taxes is earmarked for a specific
purpose? - ANSWERS--"Corporate income tax Employment taxes
Unemployment taxes
Both b. and c. are earmarked taxes (answer) "
