Test Bank for Income Tax Fundamentals 36th Edition, Gerald E.
Whittenburg, Steven Gill, ISBN-10: 1337385824
Page 1
,1. Which of the following is not a goal of the tax law?
a. Encouraging certain social goals such as contributions to charity.
b. Encouraging certain economic goals such as a thriving business community.
c. Encouraging smaller families.
d. Raising revenue to operate the government.
e. None of the above are goals of the tax law.
ANSWER: c
2. Which one of the following provisions was passed by Congress to meet a social goal of the tax law?
a. The deduction for job hunting expenses.
b. The charitable deduction.
c. The moving expense deduction for adjusted gross income.
d. The deduction for soil and water conservation costs available to farmers.
e. None of the above.
ANSWER: b
3. List two general objectives of the tax code.
ANSWER: The tax code promotes social goals, economic goals and raising revenue.
4. Mark a “Yes” to each of the following if it is an objective of the tax code. Otherwise mark with a “No.”
a. To provide a car to each American.
b. To promote giving to charities.
c. To encourage taxpayers to send their children to college.
d. To raise money to operate the government.
e. To promote the use of solar energy.
ANSWER: a. No
b. Yes
c. Yes
d. Yes
e. Yes
5. The U.S. federal tax law's sole purpose is to raise revenue.
a. True
b. False
ANSWER: False
6. Which of the following is not a goal of the tax law?
a. Ensuring that all persons pay the same amount of tax.
b. Economic goals such as reduction in unemployment.
c. Social goals such as lowering the cost of adoption.
d. Raise adequate revenue to operate the government.
ANSWER: a
7. A corporation is a reporting entity but not a tax-paying entity.
a. True
b. False
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, ANSWER: False
8. Partnership capital gains and losses are allocated separately to each of the partners.
a. True
b. False
ANSWER: True
9. Wesley owns and operates the Cheshire Chicken Ranch as a sole proprietorship in Turpid, Nevada. The income from
this ranch is $49,000. Wesley wishes to use the easiest possible tax form. He may file:
a. Form 1040EZ
b. Form 1040A
c. Form 1040
d. Form 1065
e. None of the above
ANSWER: c
10. Which of the following forms may be filed by individual taxpayers?
a. Form 1040
b. Form 1041
c. Form 1065
d. Form 1120
e. None of the above
ANSWER: a
11. Partnerships:
a. Are not taxable entities.
b. Are taxed in the same manner as individuals.
c. File tax returns on Form 1120.
d. File tax returns on Form 1041.
ANSWER: a
12. Which of the following is correct?
a. An individual is a reporting entity but not a taxable entity.
b. A partnership is a taxable entity and a reporting entity.
c. A corporation is a reporting entity but not a taxable entity.
d. A partnership is a reporting entity but not a taxable entity.
ANSWER: d
13. Form 1040 allows a taxpayer to report which of the following items that are not allowed for taxpayers who file Form
1040A:
a. Salary income.
b. Joint return status.
c. Withholding on wages.
d. Self-employment income.
ANSWER: d
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Whittenburg, Steven Gill, ISBN-10: 1337385824
Page 1
,1. Which of the following is not a goal of the tax law?
a. Encouraging certain social goals such as contributions to charity.
b. Encouraging certain economic goals such as a thriving business community.
c. Encouraging smaller families.
d. Raising revenue to operate the government.
e. None of the above are goals of the tax law.
ANSWER: c
2. Which one of the following provisions was passed by Congress to meet a social goal of the tax law?
a. The deduction for job hunting expenses.
b. The charitable deduction.
c. The moving expense deduction for adjusted gross income.
d. The deduction for soil and water conservation costs available to farmers.
e. None of the above.
ANSWER: b
3. List two general objectives of the tax code.
ANSWER: The tax code promotes social goals, economic goals and raising revenue.
4. Mark a “Yes” to each of the following if it is an objective of the tax code. Otherwise mark with a “No.”
a. To provide a car to each American.
b. To promote giving to charities.
c. To encourage taxpayers to send their children to college.
d. To raise money to operate the government.
e. To promote the use of solar energy.
ANSWER: a. No
b. Yes
c. Yes
d. Yes
e. Yes
5. The U.S. federal tax law's sole purpose is to raise revenue.
a. True
b. False
ANSWER: False
6. Which of the following is not a goal of the tax law?
a. Ensuring that all persons pay the same amount of tax.
b. Economic goals such as reduction in unemployment.
c. Social goals such as lowering the cost of adoption.
d. Raise adequate revenue to operate the government.
ANSWER: a
7. A corporation is a reporting entity but not a tax-paying entity.
a. True
b. False
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, ANSWER: False
8. Partnership capital gains and losses are allocated separately to each of the partners.
a. True
b. False
ANSWER: True
9. Wesley owns and operates the Cheshire Chicken Ranch as a sole proprietorship in Turpid, Nevada. The income from
this ranch is $49,000. Wesley wishes to use the easiest possible tax form. He may file:
a. Form 1040EZ
b. Form 1040A
c. Form 1040
d. Form 1065
e. None of the above
ANSWER: c
10. Which of the following forms may be filed by individual taxpayers?
a. Form 1040
b. Form 1041
c. Form 1065
d. Form 1120
e. None of the above
ANSWER: a
11. Partnerships:
a. Are not taxable entities.
b. Are taxed in the same manner as individuals.
c. File tax returns on Form 1120.
d. File tax returns on Form 1041.
ANSWER: a
12. Which of the following is correct?
a. An individual is a reporting entity but not a taxable entity.
b. A partnership is a taxable entity and a reporting entity.
c. A corporation is a reporting entity but not a taxable entity.
d. A partnership is a reporting entity but not a taxable entity.
ANSWER: d
13. Form 1040 allows a taxpayer to report which of the following items that are not allowed for taxpayers who file Form
1040A:
a. Salary income.
b. Joint return status.
c. Withholding on wages.
d. Self-employment income.
ANSWER: d
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