ACCOUNTING 316 TEST BANK

ACCOUNTING 316 TEST BANK 1. The ratification of the Sixteenth Amendment to the U.S. Constitution was necessary to validate the Federal income tax on individuals. *a. True b. False 2. Before the Sixteenth Amendment to the Constitution was ratified, there was no valid Federal income tax on individuals. a. True *b. False 3. The first income tax on individuals (after the ratification of the Sixteenth Amendment to the Constitution) levied tax rates from a low of 2% to a high of 6%. *a. True b. False 4. The Federal income tax on corporations generates more revenue than the Federal income tax on individuals. a. True *b. False 5. The pay-as-you-go feature of the Federal income tax on individuals conforms to Adam Smith’s canon of convenience. *a. True b. False 6. Although the law is complicated, most individual taxpayers are able to complete their Federal income tax returns without outside assistance. a. True *b. False 7. The FICA tax (Medicare component) on wages is progressive since the tax due increases as wages increase. a. True *b. False 8. The Federal estate and gift taxes are examples of progressive taxes. *a. True b. False 9. The Federal excise tax on cigarettes is an example of a proportional tax. *a. True b. False 10. Currently, the Federal income tax is more progressive than it ever has been in the past. a. True *b. False 11. Mona inherits her mother’s personal residence, which she converts to a furnished rent house. These changes should affect the amount of ad valorem property taxes levied on the properties. *a. True b. False 12. A fixture will be subject to the ad valorem tax on personalty rather than the ad valorem tax on realty. a. True *b. False 13. Even if property tax rates are not changed, the ad valorem taxes imposed on realty may not remain the same. *a. True b. False 14. The ad valorem tax on business use personalty is more often avoided by taxpayers than the ad valorem tax on personal use personalty.