Tax Accounting Practice Test! Trivia Quiz

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Leron90

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Questions: 80 | Attempts: 1,818 | Updated: Apr 19, 2024

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Tax Accounting Practice Test! Trivia Quiz - Quiz

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Current Version
Apr 19, 2024

Quiz Edited by
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Dec 06, 2011

Quiz Created by
Leron90

Tax Accounting Practice Test! Trivia Quiz

In computing MACRS depreciation, salvage value is ignored.

Deductions for business gifts are limited to what amount per individual each year?

Amortization is

The portion of an employee's salary deemed "unreasonable" may be considered a dividend distribution to an employee that is also a shareholder of the corporation.

Personal expenses are only deductible if the tax laws specifically state that they are.

A self-employed attorney uses a country club to entertain clients and spends the following amounts at the club: Annual dues$1,000 Personal meals 1,500 Business meals 2,500

If a taxpayer has two places of business in different areas, the IRS usually considers the following factors in determining the taxpayer's principal place of business: (Choose the wrong answer.)

Prepaid interest payments can be deducted in the year of payment regardless of whether the taxpayer uses the cash method or accrual method of accounting.

Percentage depletion is computed without regard to the adjusted basis of the property being depleted.

Travel expenses must be incurred by a taxpayer while away from home. To the IRS, the term "away from home" means:

Last year, a corporation purchased an office building for $220,000, of which $30,000 was allocated to the land on which the building was located. The building's salvage value was estimated to be $50,000. The corporation's current year depreciation deduction for the building is:

Business depreciable property placed in service prior to what year is not eligible for ACRS depreciation?

During 2011, a corporation purchased machinery costing $450,000 and a warehouse costing $600,000. These are the only two acquisitions of depreciable property purchased by the corporation in 2011. The maximum deduction the corporation can claim under Code Sec. 179 in 2011 is:

Nonbusiness bad debts are deductible:

For tax purposes, the term "research and experimentation expenditures" includes which of the following:

A calendar-year corporation incurs $63,000 of start-up costs. If the corporation began business on August 1 of the current year, what is the maximum amount of the start-up costs that it can deduct against business income in the current year?

A taxpayer can claim a transportation deduction equal to 50 cents per mile traveled in a passenger automobile for business purposes.

A taxpayer can claim a transportation deduction equal to 50 cents per mile traveled in a passenger automobile for business purposes.

Employment-related expenses of employees are:

A 50 percent deduction is allowed for amounts paid or incurred for dues and fees paid to social, athletic, sporting, or country clubs.

If a taxpayer is married on the last day of the tax year, a joint return must be filed in order to claim a dependent care credit.

Which of the following is allowed when computing AMTI for individuals?

Although a work opportunity credit usually is available only for qualified first-year wages, qualified second-year wages paid to a long-term family recipient can qualify for the credit.

Unused general business credits can be:

Which of the following statements is true regarding the accrual method of accounting for tax purposes?

The general business credit is subject to recapture only if disposition of the property results in an ordinary income.

Carlton Corporation's 2011 general business credit exceeded its 2011 income tax liability. The resultant general business credit:

The differences between MACRS depreciation and depreciation allowed for computing AMT results in a permanent difference between taxable income and AMTI.

Certain individuals can get a refundable tax credit of 40 percent of earned income.

What is the maximum amount that Mr. and Mrs. Jones, both over 65, may take as a credit for the elderly before the income tax limitation, assuming that they have gross income of $23,000 and adjusted gross income of $21,500?

Wages paid to workers who either live or work in an empowerment zone or in a renewal community qualify for the empowerment zone and renewal community employment credit.

The excess of percentage depletion over cost depletion is a tax preference item for purposes of computing AMT.

The employer's wage deduction is reduced by the amount of work opportunity credit claimed.

Taxpayers may elect to carry forward unused general business credit for 10 years rather than back one year and forward 20 years.

Transportation costs for a child between the taxpayer's household and the child care location are allowable child care expenses.

The minimum tax credit:

What is the earned income credit allowed Don Andersen assuming he has adjusted gross income of $8,500 and earned income of $5,000? He maintains a household for his daughter.

Foreign income taxes paid to a foreign country may be claimed as a credit against United States income tax or deducted as an itemized deduction.

A married taxpayer is required to file a joint return in all circumstances in order to be eligible for the earned income credit.

Sam and Betty Taylor maintain a home and they have two children. Their earned income was $10,000 and adjusted gross income was $11,000. They file a joint return. What is the amount, if any, of their earned income tax credit for the year?

Job-seeking expenses are not deductible if an individual is looking for work in a new trade or business.

Ad valorem personal property taxes are allowed as an itemized deduction.

Malcolm Moore, single, had medical expenses of $5,000 last year and took a $3,000 deduction. He was reimbursed $4,500 this year by his insurance company. His total itemized deductions last year were $12,000. What amount must he include in this year's tax return as gross income?

An individual who pledged $500 to the church to be paid next year is allowed a charitable contribution deduction in the year pledged.

Itemized deductions only reduce taxable income if the taxpayer's itemized deductions exceed the standard deduction amount.

Which one of the following is not deductible when itemizing?

Federal income taxes paid are deductible as an itemized deduction on an individual's federal income tax return.

Vitamin pills taken daily for general health are a qualified medical expense

Medical expenses recovered after being claimed as a deduction in the previous year must be included in income in the year of recovery to the extent that the deduction decreased taxable income in the year they were deducted.

All theft losses must be deducted in the year in which the theft actually occurred.