,Principles of Taxation for Business and Investment Planning, 23e (Jones)
Chapter 1 Taxes and Taxing Jurisdictions
1) Payment of a tax entitles the payer to a specific good or service from the government.
Answer: FALSE
Difficulty: 1 Easy
Topic: Some Basic Terminology
Learning Objective: 01-01 Define tax, taxpayer, incidence, and jurisdiction.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
2) A user fee entitles the payer to a specific good or service from the government.
Answer: TRUE
Difficulty: 1 Easy
Topic: Some Basic Terminology
Learning Objective: 01-01 Define tax, taxpayer, incidence, and jurisdiction.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
3) A tax is intended to deter or punish unacceptable behavior.
Answer: FALSE
Difficulty: 1 Easy
Topic: Some Basic Terminology
Learning Objective: 01-01 Define tax, taxpayer, incidence, and jurisdiction.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
4) A tax is a payment to support the cost of government.
Answer: TRUE
Difficulty: 1 Easy
Topic: Some Basic Terminology
Learning Objective: 01-01 Define tax, taxpayer, incidence, and jurisdiction.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
1
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
,5) Under U.S. tax law, corporations are entities separate and distinct from their shareholders.
Answer: TRUE
Difficulty: 1 Easy
Topic: Some Basic Terminology
Learning Objective: 01-01 Define tax, taxpayer, incidence, and jurisdiction.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
6) The person who pays a tax directly to the government always bears the economic incidence of
the tax.
Answer: FALSE
Difficulty: 2 Medium
Topic: Some Basic Terminology
Learning Objective: 01-01 Define tax, taxpayer, incidence, and jurisdiction.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
7) In some cases, the payer of a tax can shift the economic incidence of the tax to a third party.
Answer: TRUE
Difficulty: 1 Easy
Topic: Some Basic Terminology
Learning Objective: 01-01 Define tax, taxpayer, incidence, and jurisdiction.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
8) The U.S. government has jurisdiction to tax individuals who are not U.S. citizens but who are
permanent U.S. residents.
Answer: TRUE
Difficulty: 2 Medium
Topic: Some Basic Terminology
Learning Objective: 01-01 Define tax, taxpayer, incidence, and jurisdiction.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
2
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
, 9) The U.S. government has jurisdiction to tax individuals who are not U.S. citizens but who
earn income from a source within the United States.
Answer: TRUE
Difficulty: 2 Medium
Topic: Some Basic Terminology
Learning Objective: 01-01 Define tax, taxpayer, incidence, and jurisdiction.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
10) The U.S. government does not have jurisdiction to tax individuals who are U.S. citizens but
who are permanent residents of another country.
Answer: FALSE
Difficulty: 2 Medium
Topic: Some Basic Terminology
Learning Objective: 01-01 Define tax, taxpayer, incidence, and jurisdiction.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
11) A tax with a graduated rate structure must have at least two brackets of tax base.
Answer: TRUE
Difficulty: 2 Medium
Topic: The Relationship between Base, Rate, and Revenue
Learning Objective: 01-02 Express the relationship between tax base, rate, and revenue as a
formula.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
12) A sales tax is an example of a transaction-based tax.
Answer: TRUE
Difficulty: 1 Easy
Topic: The Relationship between Base, Rate, and Revenue
Learning Objective: 01-02 Express the relationship between tax base, rate, and revenue as a
formula.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
3
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Chapter 1 Taxes and Taxing Jurisdictions
1) Payment of a tax entitles the payer to a specific good or service from the government.
Answer: FALSE
Difficulty: 1 Easy
Topic: Some Basic Terminology
Learning Objective: 01-01 Define tax, taxpayer, incidence, and jurisdiction.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
2) A user fee entitles the payer to a specific good or service from the government.
Answer: TRUE
Difficulty: 1 Easy
Topic: Some Basic Terminology
Learning Objective: 01-01 Define tax, taxpayer, incidence, and jurisdiction.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
3) A tax is intended to deter or punish unacceptable behavior.
Answer: FALSE
Difficulty: 1 Easy
Topic: Some Basic Terminology
Learning Objective: 01-01 Define tax, taxpayer, incidence, and jurisdiction.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
4) A tax is a payment to support the cost of government.
Answer: TRUE
Difficulty: 1 Easy
Topic: Some Basic Terminology
Learning Objective: 01-01 Define tax, taxpayer, incidence, and jurisdiction.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
1
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
,5) Under U.S. tax law, corporations are entities separate and distinct from their shareholders.
Answer: TRUE
Difficulty: 1 Easy
Topic: Some Basic Terminology
Learning Objective: 01-01 Define tax, taxpayer, incidence, and jurisdiction.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
6) The person who pays a tax directly to the government always bears the economic incidence of
the tax.
Answer: FALSE
Difficulty: 2 Medium
Topic: Some Basic Terminology
Learning Objective: 01-01 Define tax, taxpayer, incidence, and jurisdiction.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
7) In some cases, the payer of a tax can shift the economic incidence of the tax to a third party.
Answer: TRUE
Difficulty: 1 Easy
Topic: Some Basic Terminology
Learning Objective: 01-01 Define tax, taxpayer, incidence, and jurisdiction.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
8) The U.S. government has jurisdiction to tax individuals who are not U.S. citizens but who are
permanent U.S. residents.
Answer: TRUE
Difficulty: 2 Medium
Topic: Some Basic Terminology
Learning Objective: 01-01 Define tax, taxpayer, incidence, and jurisdiction.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
2
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
, 9) The U.S. government has jurisdiction to tax individuals who are not U.S. citizens but who
earn income from a source within the United States.
Answer: TRUE
Difficulty: 2 Medium
Topic: Some Basic Terminology
Learning Objective: 01-01 Define tax, taxpayer, incidence, and jurisdiction.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
10) The U.S. government does not have jurisdiction to tax individuals who are U.S. citizens but
who are permanent residents of another country.
Answer: FALSE
Difficulty: 2 Medium
Topic: Some Basic Terminology
Learning Objective: 01-01 Define tax, taxpayer, incidence, and jurisdiction.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
11) A tax with a graduated rate structure must have at least two brackets of tax base.
Answer: TRUE
Difficulty: 2 Medium
Topic: The Relationship between Base, Rate, and Revenue
Learning Objective: 01-02 Express the relationship between tax base, rate, and revenue as a
formula.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
12) A sales tax is an example of a transaction-based tax.
Answer: TRUE
Difficulty: 1 Easy
Topic: The Relationship between Base, Rate, and Revenue
Learning Objective: 01-02 Express the relationship between tax base, rate, and revenue as a
formula.
Accessibility: Keyboard Navigation
Type: Static
Gradable: automatic
3
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
