WGU C239 Module Questions with 100%
Correct Answers
1. Provisions in the tax law that promote energy conservation and more use of
alternative (nonfossil) fuels can be justified by:
a. Political considerations.
b. Economic and social considerations.
c. Promoting administrative feasibility
d. Encouragement of small business.
b RATIONALE: Although it may be "good politics" to promote measures that ease the
problem of global warming (choice a.), the real justification is economic (curtail dependence
on foreign oil) and social (reduce pollution)—choice b. The encouragement of small business
(choice d.) is a by-product of these conservation provisions but is not their justification
2. Taxes not imposed by the Federal government include:
a. Tobacco excise tax.
b. Customs duties (tariffs on imports).
c. Tax on rental cars.
d. Gas guzzler tax.
c RATIONALE: The Federal government imposes an excise tax on tobacco (choice a.),
customs duties (choice b.), and a gas guzzler tax (choice d.). It does not impose a tax on
rental cars (choice c.).
3. Which, if any, of the following is a typical characteristic of an ad valorem tax on
personalty?
a. Taxpayer compliance is greater for personal use property than for business use
property.
, b. The tax on automobiles sometimes considers the age of the vehicle.
c. Most states impose a tax on intangibles.
d. The tax on intangibles generates considerable revenue since it is difficult for
taxpayers to avoid
B RATIONALE: Taxpayer compliance is greater with business use property (choice a.). Very
few states impose a tax on intangibles (choice c.) because it is easily avoided and does not
generate much revenue (choice d.).
4. Which of the following taxes is paid only by the employer?
a. FICA
b. FUTA
c. Social Security tax
d. Medicare tax
b RATIONALE: The other listed taxes are paid by both employer and employee.
5. Both economic and social considerations can be used to justify:
a. Favorable tax treatment for accident and health plans provided for employees and
financed by employers.
b. Disallowance of any deduction for expenditures deemed to be contrary to public
policy (e.g., fines, penalties, illegal kickbacks, bribes to government officials).
c. Various tax credits, deductions, and exclusions that are designed to encourage
taxpayers to obtain additional education.
d. Allowance of a deduction for state and local income taxes paid.
C
6. Federal excise taxes that are no longer imposed include:
a. Tax on air travel.
Correct Answers
1. Provisions in the tax law that promote energy conservation and more use of
alternative (nonfossil) fuels can be justified by:
a. Political considerations.
b. Economic and social considerations.
c. Promoting administrative feasibility
d. Encouragement of small business.
b RATIONALE: Although it may be "good politics" to promote measures that ease the
problem of global warming (choice a.), the real justification is economic (curtail dependence
on foreign oil) and social (reduce pollution)—choice b. The encouragement of small business
(choice d.) is a by-product of these conservation provisions but is not their justification
2. Taxes not imposed by the Federal government include:
a. Tobacco excise tax.
b. Customs duties (tariffs on imports).
c. Tax on rental cars.
d. Gas guzzler tax.
c RATIONALE: The Federal government imposes an excise tax on tobacco (choice a.),
customs duties (choice b.), and a gas guzzler tax (choice d.). It does not impose a tax on
rental cars (choice c.).
3. Which, if any, of the following is a typical characteristic of an ad valorem tax on
personalty?
a. Taxpayer compliance is greater for personal use property than for business use
property.
, b. The tax on automobiles sometimes considers the age of the vehicle.
c. Most states impose a tax on intangibles.
d. The tax on intangibles generates considerable revenue since it is difficult for
taxpayers to avoid
B RATIONALE: Taxpayer compliance is greater with business use property (choice a.). Very
few states impose a tax on intangibles (choice c.) because it is easily avoided and does not
generate much revenue (choice d.).
4. Which of the following taxes is paid only by the employer?
a. FICA
b. FUTA
c. Social Security tax
d. Medicare tax
b RATIONALE: The other listed taxes are paid by both employer and employee.
5. Both economic and social considerations can be used to justify:
a. Favorable tax treatment for accident and health plans provided for employees and
financed by employers.
b. Disallowance of any deduction for expenditures deemed to be contrary to public
policy (e.g., fines, penalties, illegal kickbacks, bribes to government officials).
c. Various tax credits, deductions, and exclusions that are designed to encourage
taxpayers to obtain additional education.
d. Allowance of a deduction for state and local income taxes paid.
C
6. Federal excise taxes that are no longer imposed include:
a. Tax on air travel.
