WGU - C237 - TAXATION 1 EXAM
QUESTIONS AND ANSWERS
Question 1
An accounting method that values the cost of assets sold under the assumption that
assets are sold in the reverse order in which they are purchased. (Ch 9-19)
Correct Answer
LIFO
Page 1 of 176
,Question 2
A change to taxable income associated with a change in accounting methods. (Ch 9-
30)
Correct Answer
481 Adjustment
Question 1
1) Which of these is the highest tax authority in the United States?
A) Revenue Rulings
B) Internal Revenue Code
C) CCH Master Tax Guide
D) Letter Rulings
Correct Answer
B
Question 2
1) What makes the process more advantageous in tax research?
A) Open Facts
B) Closed Facts
C) Alert the Authorities
D) File a complaint
Correct Answer
A
Question 3
1) What is the depreciation process under Section 179?
A) ARCS
B) MACRS
C) ACRF
D) DEPR
Correct Answer
B
Page 2 of 176
,Question 4
1) Income from Municipal Bond Interest is?
A) Deferred Income
B) Exempt Income
C) Taxable Income
D) Non-Exempt Income
Correct Answer
B
Question 5
1) Which of the following received preferential tax treatment?
A) Long-Term Capital Gains
B) Short-Term Capital Gains
C) Wages
D) Interest from bank account
Correct Answer
A
Question 6
1) A taxpayer hires a CPA. The taxpayer wants to claim tax credit. There is recent
proposed legislation allowing the credits. The IRC says the credits are not
allowed, what should the CPA recommend to the client?
A) Follow the legislation and claim the credit
B) Follow the legislation and don't claim the credit
C) Follow the IRC and claim the credit
D) Follow the IRC and don't claim the credit
Correct Answer
D
Page 3 of 176
, Question 7
1) Sarah is a college student she received a scholarship, what would not be
included under a qualified tuition plan?
A) Room and Board
B) Travel to see parents
C) Meal Plan
D) Textbooks
Correct Answer
B
Question 8
1) What is the executive highest authority?
A) IRC
B) Revenue Ruling
C) Treasury Regulations
D) CCH
Correct Answer
C
Question 9
1) When are taxes due if you do not file for an extension?
A) Month 3 Day 15 unless day 15 is a holiday, then the next business day
B) Month 4 Day 15 unless day 15 is a holiday, then the next business day
C) Month 5 Day 15 unless day 15 is a holiday, then the next business day
D) Month 4
Correct Answer
B
Page 4 of 176
QUESTIONS AND ANSWERS
Question 1
An accounting method that values the cost of assets sold under the assumption that
assets are sold in the reverse order in which they are purchased. (Ch 9-19)
Correct Answer
LIFO
Page 1 of 176
,Question 2
A change to taxable income associated with a change in accounting methods. (Ch 9-
30)
Correct Answer
481 Adjustment
Question 1
1) Which of these is the highest tax authority in the United States?
A) Revenue Rulings
B) Internal Revenue Code
C) CCH Master Tax Guide
D) Letter Rulings
Correct Answer
B
Question 2
1) What makes the process more advantageous in tax research?
A) Open Facts
B) Closed Facts
C) Alert the Authorities
D) File a complaint
Correct Answer
A
Question 3
1) What is the depreciation process under Section 179?
A) ARCS
B) MACRS
C) ACRF
D) DEPR
Correct Answer
B
Page 2 of 176
,Question 4
1) Income from Municipal Bond Interest is?
A) Deferred Income
B) Exempt Income
C) Taxable Income
D) Non-Exempt Income
Correct Answer
B
Question 5
1) Which of the following received preferential tax treatment?
A) Long-Term Capital Gains
B) Short-Term Capital Gains
C) Wages
D) Interest from bank account
Correct Answer
A
Question 6
1) A taxpayer hires a CPA. The taxpayer wants to claim tax credit. There is recent
proposed legislation allowing the credits. The IRC says the credits are not
allowed, what should the CPA recommend to the client?
A) Follow the legislation and claim the credit
B) Follow the legislation and don't claim the credit
C) Follow the IRC and claim the credit
D) Follow the IRC and don't claim the credit
Correct Answer
D
Page 3 of 176
, Question 7
1) Sarah is a college student she received a scholarship, what would not be
included under a qualified tuition plan?
A) Room and Board
B) Travel to see parents
C) Meal Plan
D) Textbooks
Correct Answer
B
Question 8
1) What is the executive highest authority?
A) IRC
B) Revenue Ruling
C) Treasury Regulations
D) CCH
Correct Answer
C
Question 9
1) When are taxes due if you do not file for an extension?
A) Month 3 Day 15 unless day 15 is a holiday, then the next business day
B) Month 4 Day 15 unless day 15 is a holiday, then the next business day
C) Month 5 Day 15 unless day 15 is a holiday, then the next business day
D) Month 4
Correct Answer
B
Page 4 of 176
