Archives: Quiz

In which of the following will the Constructive Receipt Doctrine require reporting income in 2015? I. Cornell’s December 2015 salary check is withheld until January 15, 2016, because the employer does not have sufficient cash to cover its December payroll. […]

Richard, a cash basis taxpayer, is an 80% owner and president of WLFI TV. WLFI TV is an S corporation and uses the accrual method of accounting. On December 1, 2015, WLFI TV accrues a bonus of $50,000 to Richard. […]

During 2015, Marsha, an employee of G&H CPA firm, drove her car 24,000 miles. The detail of the mileage is as follows: Personal Use 3,000 miles Transportation between home and office 3,000 miles Transportation to and from clients’ offices 18,000 […]

Jason purchases a patent at a cost of $24,000. The patent has 8 years of legal life remaining from the date of purchase. I. If the patent is the only asset Jason purchased, he must amortize the patent over 15 […]

Unreimbursed medical costs are deductible only to the extent that they exceed 3.0% of the taxpayer’s adjusted gross income. a. True b. False Classification of a nonrecognition transaction as a continuation of an investment requires a qualified replacement asset. a. […]

Fay “hires” her four-year-old son to be the office manager of her real estate firm. She deducts his $20,000 annual salary as a business expense. The IRS disallows the deduction upon examination of Fay’s tax return. Which of the following […]

Francisco’s employer establishes Health Savings Accounts (HSA’s) for its employees. The plan provides for his employer to pay $1,000 into Francisco’s HSA, and Francisco to also contribute $1,000 to his HSA. During the year, the plan pays for $1,500 of […]

Ross and Reba are both in their 30’s and they are married. Reba earns $64,000 annually, and Ross earns $1,800 annually working part time. Their adjusted gross income is $81,500. Reba participates in an employer-sponsored retirement plan. Ross and Reba […]

In July 2015, Harriet sells a stamp from her stamp collection at a gain of $500. Harriet purchased the stamp in 2009. If Harriet is in the 33% marginal tax rate bracket and has no other capital asset sales in […]

Brad, an engineering consultant, was given stock valued at $3,000 for services rendered. His basis in the stock he received for the services is zero since he received no cash. a. True b. False Gary won the Nobel Prize in […]

Thomas has adjusted gross income of $228,000, total itemized deductions of $39,000 and claims 2 personal and 2 dependency exemptions. Which is his filing status? a. Single. b. Head of household. c. Married filing a joint return. d. Married filing […]

Janelle receives a sterling silver tea set valued at $500 from her employer during her retirement dinner for her long years of service. The employer has a tradition of giving awards to some retiring employees, but has no qualified plan. […]

Troy Company purchased a printing press on April 13, 2012 at a cost of $30,000. Troy sells the printing press on January 3, 2015 for $16,000. Regular MACRS depreciation on the printing press would be $18,500, while straight-line MACRS depreciation […]

Dustin buys 200 shares of Monroe Corporation common stock on December 1, 2014, for $2,000. He buys an additional 200 shares for $1,800 on December 23, 2015. On December 28, 2015, Dustin sells the first 200 shares for $1,700. He […]

A tax provision has been discussed that would add an additional marginal tax rate of 42% to be applied to an individual’s taxable income in excess of $800,000. If this provision were to become law, what overall distributional impact would […]

Adjustments to gross selling price include I. the amount of a seller’s expenses paid by the buyer. II. the amount of the buyer’s debt assumed by the seller. a. Only statement I is correct. b. Only statement II is correct. […]

Alli is 23 years old, a full time student, and a dependent of her parents. She earns $2,000 from her job as a waitress and receives $3,000 of interest on a savings account established by her grandparents. a. What is […]

Generally income tax accounting methods are designed to result in I. a proper matching of expenses to the revenues being generated. II. a denial of a current deduction for costs that will not have to be paid in the near […]

For the current year, Salvador’s regular tax liability is $17,000, and his tentative alternative minimum tax is $19,000. Salvador has $16,250 withheld from his salary. I. Salvador has a tax due of $750. II. Salvador’s alternative minimum tax is $0. […]

Which of the following taxes is deductible from adjusted gross income when paid by an individual taxpayer? I. State income tax. II. State excise tax on gasoline. a. Only statement I is correct. b. Only statement II is correct. c. […]

Helen receives stock worth $1,000 from her grandfather as a graduation gift in May 2015 (her grandfather paid $100 for the stock many years ago). In December 2015, she receives a $100 cash dividend on the stock. Helen is not […]

Paul, age 40 and single, has an 8-year-old son, Larry. Larry resides with his mother, Susan, in her home. Pursuant to the terms of their divorce, Paul properly claims Larry as a dependent on his income tax return. Paul pays […]

A guaranteed payment is a payment made to a partner for specific services performed by the partner and is made without regard to the partnership’s income. a. True b. False Wayne purchases a new home during the year, borrowing $725,000 […]

Which of the following statements related to the Section 179 election to expense is (are) true? I. A Section 179 deduction can be claimed on tangible personal property II. A Section 179 deduction can be claimed on property held for […]

Chance Corporation has a $20,000 deficit in earnings and profits as of January 1, 2015. During 2015, the corporation has current earnings and profits of $40,000 and makes a $70,000 cash distribution to its shareholders. What part of the distribution […]

Milroy Company manufactures steering wheels. Its taxable income in 2015 before the Qualifying Production Activities Deduction (QPAD) is $2,000,000 and its qualified production activities income is $2,500,000. Milroy’s qualifying W-2 wages paid are $400,000. How much may Milroy take as […]

A representative who is performing the role of an instructed delegate is a. mirroring the views of the majority of the constituents who elected him or her. b. supporting the president on all of his legislative programs. c. acting according […]

Which of the following is true regarding politics and the Great Depression? a. The Great Depression shattered the working-class belief in Democratic economic competence. b. Hoover supported federal relief for the unemployed and the destitute. c. Roosevelt’s relief programs were […]

Basically, the New Jersey Plan was a. the result of the Great Compromise. b. a way for large states to grab power. c. simply an amendment of the Articles of Confederation. d. simply an amendment of the Mayflower Compact. e. […]

All of the following are principles of democratic governments EXCEPT a. universal suffrage. b. majority rule and protection of minority rights. c. free, competitive elections. d. limited government. e. limited right to vote. Which of the following is NOT a […]

In recent years, polls show that ______ of respondents have favorable opinions about Congress as a whole. a. fewer than 5 percent b. as few as 9 percent c. about 50 percent d. about 75 percent e. more than 90 […]

The doctrine of ______ rests on the assumption that the courts should defer to the decisions made by the legislative and executive branches. a. judicial restraint b. judicial activism c. habeas corpus d. the rule of four e. stare decisis […]

Which of the following statements about the early Republican Party is false? a. Thomas Jefferson initially led it. b. It favored a strong national government. c. Artisans and farmers supported the party. d. It was a staunch advocate of states’ […]

Oversight is a. the process by which Congress follows up on the laws it has enacted. b. the process by which Congress reviews the actions of subcommittees. c. the time of the year that Congress chooses its leadership. d. when […]

Which of the following statements best explain why the representation function is often a source of conflict for individual lawmakers? a. The interests of constituents in a specific district may be at odds with the demands of national policy. b. […]

The presidential power known as diplomatic recognition a. is a relatively meaningless tradition. b. has seldom been used by any president. c. is the power of the president to recognize, or not recognize, foreign governments. d. is a simple and […]

A republic is a. a conservative form of government. b. a direct democracy. c. a government in which sovereign power rests with the people, not a monarch. d. a totalitarian state. e. a government in which the people directly elect […]

A political advisor who tries to convince journalists of the truth of a particular interpretation of events is called a a. news consultant. b. flip-flopper. c. spin doctor. d. fact checker. e. win engineer. In 2000, the Supreme Court addressed […]

Which of the following statements best defines discouraged workers? a. People who work in businesses that they created b. People who took control of businesses from someone else c. People who work less than forty hours a week d. People […]

With regard to the issue of oil and energy, a. President Obama has not been active in supporting new policies. b. the world’s largest oil exporters are all friends of the United States. c. President Obama opposes using nuclear power. […]

The doctrine of dual federalism receded into the background as the nation attempted to deal with a. growing international pressure. b. the aftermath of World War I. c. the aftermath of the Civil War. d. the Great Depression. e. rampant […]

The United States is among the few countries that does not tax their exports because a. it does not need the money. b. exportation is a natural right. c. the South obtained a promise that export taxes would not be […]

The Office of Management and Budget is charged with a. helping Congress write the budget. b. helping the president prepare the annual budget. c. revising the budget passed by Congress. d. reducing the scope of the federal budget. e. replacing […]

The Australian ballot is best described as a a. secret ballot prepared, distributed, and tabulated by government officials at public expense. b. color-coded ballot made by the political parties to show poll watchers who a voter is voting for. c. […]

The exclusionary rule is a policy that a. prohibits the admission of illegally seized evidence at trial. b. prohibits the arresting officer from serving as a character witness at a hearing or trial. c. prohibits the detention of a suspect […]

Describe the ways in which the government is involved in regulating the media. Why is regulation necessary? What effects does it have on what information we receive? Answer:Students’ answers may vary. From 1801 to 1835, the Supreme Court was headed […]

The right to privacy is a. an unimportant liberty. b. an agreed-upon part of American political culture. c. a particularly controversial liberty. d. explicitly stated in the Bill of Rights. e. a central concept of democracy. Some claim that the […]

The federal appeals court process involves a. witnesses and testimony presented to a jury. b. grand juries who decide if there is enough evidence to have a trial. c. a panel of judges that reviews the case record and determines […]

George Washington viewed political parties as a a. necessity for the functioning of democracy. b. tradition from colonial times that would always exist. c. threat to national unity and popular government. d. legitimate means for interest groups to attempt to […]

Advertising paid for by interest groups that support or oppose a candidate (or a candidate’s position on an issue) without mentioning voting or elections is called a. a PAC advertisement. b. a soft money contribution. c. issue advocacy advertising. d. […]