CFL Module 2 Exam Questions with
100% Correct Answers.
Gross pay is the amount of pay the employee takes home: True or False
False
Who completes Form W-4?
Employee
The Wage and Tax Statement is also known as
W-2 Form
All tip income is taxable: True or False
True
The number of withholding allowances claimed by the employee on Form W-4 is not
reported on Form W-4: True or False
True
Wages earned by a worker at a casual fast-food restaurant are nontaxable: True or False
False. They are taxable
Free lawn care service for a month for a mailroom employee who developed a
handbook for new employees is taxable: True or False
True
Interest received on a certificate of deposit (CD) is what?
Taxable
Interest received on a bond issued by the state of California to fund school buildings
is what?
, Tax-exempt
Interest received on a loan you made to your business partner is what?
Taxable
Interest received on a bond issued by the city of Austin, Texas, for a redevelopment project
is what?
Tax-exempt
Interest income is considered to be:
Unearned income
Is the Relationship Test met by each of the following: a brother, a sister, and a stepchild?
Yes
Which person does not meet the Citizen or Resident Test?
A permanent, full-time resident of Australia
Only taxable income is included in gross income: True or False
True
Do cousins meet the relationship test?
No
Relationships established by marriage are not ended by death or divorce: True or False
True
List the filing statuses in order from lowest tax rates to highest tax rates.
- Head of household
- Married filing separately
- Either married filing jointly or qualifying widow(er) with dependent child
- Single
100% Correct Answers.
Gross pay is the amount of pay the employee takes home: True or False
False
Who completes Form W-4?
Employee
The Wage and Tax Statement is also known as
W-2 Form
All tip income is taxable: True or False
True
The number of withholding allowances claimed by the employee on Form W-4 is not
reported on Form W-4: True or False
True
Wages earned by a worker at a casual fast-food restaurant are nontaxable: True or False
False. They are taxable
Free lawn care service for a month for a mailroom employee who developed a
handbook for new employees is taxable: True or False
True
Interest received on a certificate of deposit (CD) is what?
Taxable
Interest received on a bond issued by the state of California to fund school buildings
is what?
, Tax-exempt
Interest received on a loan you made to your business partner is what?
Taxable
Interest received on a bond issued by the city of Austin, Texas, for a redevelopment project
is what?
Tax-exempt
Interest income is considered to be:
Unearned income
Is the Relationship Test met by each of the following: a brother, a sister, and a stepchild?
Yes
Which person does not meet the Citizen or Resident Test?
A permanent, full-time resident of Australia
Only taxable income is included in gross income: True or False
True
Do cousins meet the relationship test?
No
Relationships established by marriage are not ended by death or divorce: True or False
True
List the filing statuses in order from lowest tax rates to highest tax rates.
- Head of household
- Married filing separately
- Either married filing jointly or qualifying widow(er) with dependent child
- Single
