Tax Accounting- Exam 2 questions with
correct answers respectively.
1. which of the following statements is true?
a. individuals qualify for the moving expense deduction only if they change employers
b. to satisfy the time test, the taxpayer must be employed full time for 38 of the first 52 weeks after the
move
c. to satisfy the distance test the distance from taxpayers new residence to old place of work must be 50
more miles than the distance from old residence to old place of work
d. to satisfy the distance test the distance from taxpayers old residence to new place of work must be 50
miles more than distance from old residence to old place of work ANS - d. to satisfy the distance test
the distance from taxpayers old residence to new place of work must be 50 miles more than distance
from old residence to old place of work
2. which of the following is a true statement?
a. employees cannot claim business expense deductions
b. employees can claim business expense deductions for AGI
c. employees can claim business expense deductions as miscellaneous itemized deductions not subject
to 2% AGI limitation
d. employees can claim business expense deductions as miscellaneous itemized deductions subject to
2% AGI limitation
e. none of the above ANS - d. employees can claim business expense deductions as miscellaneous
itemized deductions subject to 2% AGI limitation
3. han is a self employed carpenter and his wife christine works full time as a grade school teacher. han
paid 525 for carpentry toold and supplies, and christine paid 3600 as her share of health insurance in a
qualified plan provided by the school district. which statement is true?
a. the tools are deductibe for AGI while health insurance is an itemized deduction
b. both are deductible for AGI
c. the tools are deductible as an itemized deduction and health insurance is deductible for AGI
, d. both are itemized deductions
e. neither expenditure is deductible ANS - a. the tools are deductibe for AGI while health insurance is an
itemized deduction
4. opal fell on the ice and injured her hip this winter. as a result she paid 3080 for a visit to the hospital
and 830 for a followup visit. she paid 580 for prescription medicine and 680 for therapy. insurance
reimbursed her for 1280 of expenses. what is her qualifying medical expense?
a. 3080
b. 3910
c. 3890
d. 5170
e. none of the above ANS - c. 3890
3080 + 830 + 580 + 680 - 1280
5. unreimbursed trip had following expenses:
airfare- 1460, lodging- 910, meals- 760, cab- 380
what is the deduction?
a. 3510
b. 3130
c. 2370
d. 1460 ANS - c. 3130
1460 + 910 + 380 + 380
6. larry recorded the following donations:
600 cash to family in need, 2500 to church, 600 to political campaign, goods to salvation army originally
costing 1300 but worth 400
what is the maximum allowable contribution if AGI is 61000?
a. 3100
b. 1200
c. 5000
correct answers respectively.
1. which of the following statements is true?
a. individuals qualify for the moving expense deduction only if they change employers
b. to satisfy the time test, the taxpayer must be employed full time for 38 of the first 52 weeks after the
move
c. to satisfy the distance test the distance from taxpayers new residence to old place of work must be 50
more miles than the distance from old residence to old place of work
d. to satisfy the distance test the distance from taxpayers old residence to new place of work must be 50
miles more than distance from old residence to old place of work ANS - d. to satisfy the distance test
the distance from taxpayers old residence to new place of work must be 50 miles more than distance
from old residence to old place of work
2. which of the following is a true statement?
a. employees cannot claim business expense deductions
b. employees can claim business expense deductions for AGI
c. employees can claim business expense deductions as miscellaneous itemized deductions not subject
to 2% AGI limitation
d. employees can claim business expense deductions as miscellaneous itemized deductions subject to
2% AGI limitation
e. none of the above ANS - d. employees can claim business expense deductions as miscellaneous
itemized deductions subject to 2% AGI limitation
3. han is a self employed carpenter and his wife christine works full time as a grade school teacher. han
paid 525 for carpentry toold and supplies, and christine paid 3600 as her share of health insurance in a
qualified plan provided by the school district. which statement is true?
a. the tools are deductibe for AGI while health insurance is an itemized deduction
b. both are deductible for AGI
c. the tools are deductible as an itemized deduction and health insurance is deductible for AGI
, d. both are itemized deductions
e. neither expenditure is deductible ANS - a. the tools are deductibe for AGI while health insurance is an
itemized deduction
4. opal fell on the ice and injured her hip this winter. as a result she paid 3080 for a visit to the hospital
and 830 for a followup visit. she paid 580 for prescription medicine and 680 for therapy. insurance
reimbursed her for 1280 of expenses. what is her qualifying medical expense?
a. 3080
b. 3910
c. 3890
d. 5170
e. none of the above ANS - c. 3890
3080 + 830 + 580 + 680 - 1280
5. unreimbursed trip had following expenses:
airfare- 1460, lodging- 910, meals- 760, cab- 380
what is the deduction?
a. 3510
b. 3130
c. 2370
d. 1460 ANS - c. 3130
1460 + 910 + 380 + 380
6. larry recorded the following donations:
600 cash to family in need, 2500 to church, 600 to political campaign, goods to salvation army originally
costing 1300 but worth 400
what is the maximum allowable contribution if AGI is 61000?
a. 3100
b. 1200
c. 5000
