Pre Test Help Essay

5393 Words Aug 27th, 2014 22 Pages
1. | Which tax is calculated on the transfer of property and is normally determined by multiplying the value of the property transferred by a tax rate?

Choose 1 answer | | A. | | progressive tax | B. | | excise tax | C. | | income tax | D. | | FICA tax | | 2. | Which two statements describe how taxes influence decisions made when filing a return for an individual taxpayer? | | Choose 2 answers | | A. | | Changes in tax structure may allow taxpayers to have more money to spend. | B. | | Shorter asset lives and accelerated methods encourage additional investment in depreciable property acquired for business use. | C. | | Various tax credits, deductions, and exclusions are designed to encourage
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| C. | | The cash basis of accounting considers all income for the year when it is collected and pays taxes on that amount, regardless of when it is earned. The accrual basis of accounting considers all income for the year when it is earned and pays taxes on that basis, regardless of when funds are actually collected. | D. | | The accrual basis of accounting considers all income for the year when it is earned and pays taxes on the gross income amount, regardless of when funds are actually collected. The cash basis of accounting considers all income for the year when it is earned and pays taxes on the gross income amount, regardless of when funds are actually collected. | | 5. | Which two practices are required by the American Institute of Certified Public Accountants (AICPA) for professional, ethical, and legal responsibilities of a tax preparer? | | Choose 2 answers | | A. | | Every effort should be made to answer questions appearing on tax returns. | B. | | Upon learning of an error on a past tax return, advise the client to correct it and inform the IRS of the error. Immediately withdraw from the engagement. | C. | | Do NOT take questionable positions on a client's tax return in the hope that the return will NOT be selected for audit by the IRS. | D. | | A practitioner may NOT use a client's estimates even if they are reasonable under the circumstances. If the tax law requires

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