Personal Financial Planning 14th Edition by Randy Billingsley – Test Bank

 

To Purchase this Complete Test Bank with Answers Click the link Below

 

https://tbzuiqe.com/product/personal-financial-planning-14th-edition-by-randy-billingsley-test-bank/

 

If face any problem or Further information contact us At tbzuiqe@gmail.com

 

 

Sample Test

Chapter_3_Preparing_Your_Taxes   1. The federal personal income tax is a progressive tax.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

2. The federal personal income tax is a flat tax.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

3. Tax avoidance is legal, tax evasion is illegal.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-5 – LO: 3-5 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

4. One’s marginal tax rate is typically lower than one’s average tax rate.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Analyzing

 

5. One’s average tax rate is typically lower than one’s marginal tax rate.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Analyzing

 

6. If you have any earned income, you are required to file a tax return.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

7. The main objective of tax planning is to maximize the amount of money you keep by minimizing the amount of taxes you pay.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-6 – LO: 3-6 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Understanding

 

8. If you are eligible to receive a tax refund, you will have to file a tax return to get the refund.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

9. Income tax refunds are automatically sent to those who qualify for refunds no later than April 15.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

10. As a single taxpayer with no dependents, one is generally eligible to file as “head of household.”   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

11. Russ and Lois got married December 30. Although they were single for most of the year, they can legally file as married taxpayers in the year of the wedding.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

12. Dwayne and Gayle were divorced September 29, have not remarried, and have no dependents. Their filing status for the year will each be “married” since they were married for more than half of the year.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

13. If you are married, you can legally file a single tax return.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

14. A spouse and spouse is the only couple combination that can file a joint return.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

15. The tax brackets (rates) and payments for married couples filing separately are now typically close to the same as for joint filers.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

16. The Internal Revenue Service is responsible for making changes to the federal income tax codes.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

17. Congress considers tax law changes throughout the year.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

18. Social security taxes are deducted from all wages and salaries earned in a year.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

19. Social security taxes are paid on earned income but not on investment income.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

20. There is no limit on the amount of social security tax withheld annually.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

21. The Medicare portion of the FICA tax is paid on 100% of earnings.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

22. Your marital status will affect the amount of social security you must pay in a year.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

23. Child support received is included in gross income.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

24. Alimony received is included in gross income for the receiver and deducted from gross income for the payer.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

25. Gifts received from family and friends are included in gross income.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

26. Gross income minus tax exempt income equals adjusted gross income.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Challenging LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

27. Dividends received from the stock you own will be taxable income.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

28. Qualified dividends are taxed at the same rates as long-term capital gains.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Challenging LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

29. Portfolio-related expenses can be written off against passive income.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Challenging LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

30. A short-term capital gain would be taxed at the same rate as your salary.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Challenging LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

31. A long-term capital gain is taxed at the same rate as ordinary income.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Challenging LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

32. The sale of your home will rarely result in a taxable capital gain.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

33. An investment must be owned over one year in order to qualify for long-term capital gains treatment.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

34. An investment must be owned over two years in order to qualify for long-term capital gains treatment.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

35. To receive the most favorable capital gains treatment, a taxpayer must own and occupy a home for at least two of the five years prior to its sale.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Challenging LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

36. Adjustments to income will decrease your taxable income.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Analyzing

 

37. Itemized deductions could include certain taxes, medical expenditures, and home mortgage interest.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Applying

 

38. You should itemize deductions when total itemized deductions exceed the standard deduction.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Analyzing

 

39. You should itemize deductions when total itemized deductions are less than the standard deduction.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Analyzing

 

40. Mortgage interest and paid home property taxes are both itemized deduction items.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

41. State income taxes and real estate taxes are both itemized deduction items.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

42. A tax deduction is more valuable than a tax credit.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-3 – LO: 3-3 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

43. Federal income taxes paid can be deducted the following year.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

44. Personal exemptions are deductions from AGI based on the number of  persons supported by the taxpayer’s income.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

45. The personal exemption for a student can be taken both by the parent and by the child.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

46. When a child qualifies as a dependent on her parent’s return, the child cannot take a personal exemption for herself.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

47. The alternative minimum tax is designed to ensure that individuals with many deductions and tax-shelter investments are paying their fair share of taxes.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-3 – LO: 3-3 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

48. Tax credits are dollar-for-dollar reductions in taxes due.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-3 – LO: 3-3 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

49. Estimated tax payments must be made by those who do not have taxes deducted from their earnings.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-3 – LO: 3-3 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

50. A person with a significant amount of investment income would have a high probability of needing to make estimated tax payments.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-3 – LO: 3-3 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Applying

 

51. All taxpayers have an equal probability of having their tax returns audited.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-4 – LO: 3-4 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

52. You have up to three years after mailing your tax return to file an amended tax return (1040X).   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-4 – LO: 3-4 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

53. If your AGI is less than $100,000 and you do not itemize deductions, the IRS will compute your taxes for you.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-4 – LO: 3-4 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

54. A married couple filing a joint return has Ms. Cindy Cook, a CPA, complete their return. The IRS will hold only Ms. Cook responsible for any errors on the return.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-4 – LO: 3-4 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

55. Marginal tax and average tax rate refer to the same thing.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Analyzing

 

56. If you earn less than $15,000, you probably pay more in social security taxes than in federal income taxes.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Challenging LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes

 

57. Opening a traditional IRA would allow you to defer taxes on the earnings.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Challenging LEARNING OBJECTIVES:   PFIN.BILL.17.3-6 – LO: 3-6 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Analyzing

 

58. Opening a traditional IRA would allow you to take advantage of tax-free earnings.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Challenging LEARNING OBJECTIVES:   PFIN.BILL.17.3-6 – LO: 3-6 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Analyzing

 

59. Tax-deferred income is better than tax-free income.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Challenging LEARNING OBJECTIVES:   PFIN.BILL.17.3-6 – LO: 3-6 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Analyzing

 

60. Municipal bond investments typically provide tax-free interest income.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-6 – LO: 3-6 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

61. Most any wage earner can open an IRA and contribute up to $7,500 of tax-deferred income each year to the account.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Challenging LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

62. Tax avoidance is a legal means to minimize tax liabilities.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-6 – LO: 3-6 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

63. Tax evasion is a legal means to avoid tax liabilities.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-6 – LO: 3-6 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

64. Persons who work for more than one employer in any year will owe more social security taxes than if all their income was earned from a single employer.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Challenging LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Analyzing

 

65. A taxpayer claiming himself and one dependent had personal exemptions in 2014 amounting to $7,900.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

66. The regular income tax filing deadline is April 1 of each year.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-4 – LO: 3-4 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

67. By filing a tax extension, one does not have to pay his income tax liability until October 15.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-4 – LO: 3-4 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

68. Income shifting refers to the process of transferring income from the taxpayer to the IRS.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-6 – LO: 3-6 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Analyzing

 

69. The standard deduction in 2014 for a single filer was $6,500 and for married persons filing jointly was $13,000.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

70. Most major software providers have free online versions for preparing federal taxes for all taxpayers.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-5 – LO: 3-5 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows KEYWORDS:   Bloom’s: Remembering

 

71. You are more likely to have your tax return audited if you have large deductions for meals, travel, and entertainment.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-4 – LO: 3-4 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows KEYWORDS:   Bloom’s: Remembering

 

72. The tax year corresponds to the April 15 filing deadline, with a new tax year beginning April 16th.   a. True   b. False   ANSWER:   False POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-4 – LO: 3-4 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows KEYWORDS:   Bloom’s: Remembering

 

73. The alternative minimum tax calculation includes in taxable income certain types of deductions otherwise allowed, such as state and local income and property taxes.   a. True   b. False   ANSWER:   True POINTS:   1 DIFFICULTY:   Challenging LEARNING OBJECTIVES:   PFIN.BILL.17.3-2 – LO: 3-2 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows KEYWORDS:   Bloom’s: Remembering

 

74. The federal government gets the majority of its revenue from the ____ tax.   a. sales   b. property   c. excise   d. income   e. estate   ANSWER:   d POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

75. The federal income tax is   a. integrative.   b. regressive.   c. progressive.   d. flat rate.   e. none of the above.   ANSWER:   c POINTS:   1 DIFFICULTY:   Easy LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

76. A progressive tax system is one in which higher-income people pay ____ than lower-income people.   a. a higher dollar amount in taxes   b. tax at a higher rate   c. a lower dollar amount in taxes   d. tax at a lower rate   e. tax at the same rate   ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Remembering

 

77. Henry is married to Lillian, and they have two dependent children. Henry can legally file using which of the following filing statuses?   a. Single   b. Married filing jointly   c. Head of household   d. Qualifying widow   e. Any of the above   ANSWER:   b POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Applying

 

78. Pete and Pam are married with four dependent children. Pete and Pam can legally file using which of the following filing statuses?   a. married filing separately   b. married filing jointly   c. head of household   d. a or b   e. a, b, or c   ANSWER:   d POINTS:   1 DIFFICULTY:   Moderate LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1 NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows United States – AK – DISC: Taxes KEYWORDS:   Bloom’s: Applying