Corporations, Partnerships & Taxes Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. What can you do to defray the tax burden on a deferred annuity (when you are ready to start withdrawing funds)?

Question 2 2. How is the money typically paid out in an immediate annuity?

Question 3 3. While the IRS does not require a specific method for accounting for inventory, it does require that certain items be included in the accounting of inventory. Which of the following items must be included?

Question 4 4. If you sell products whose cost increases over time, which of the following methods will result in a lower taxable income for your business?

Question 5 5. Molly's Mugs sells all sorts of coffee mugs. On December 20, 2013, Molly received a last minute order of Santa mugs. They were packed and shipped by December 21, 2013. The client accepted the order and paid on January 3, 2014. Molly decided to report the cost of goods sold and the income separately. So, in 2013 she reported the cost of goods sold, and in 2014, she reported the income. What did Molly do?

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Question 6 6. Which of the following forms of business ownership mixes personal income with business income?

Question 7 7. Which of the following actions results in piercing the corporate veil?

Question 8 8. Alisa owns Alright Business Services. It is a corporation, but Alisa does not use the word 'Incorporated' or 'Inc.' anywhere on her correspondence. Alisa is in charge of paying the bills for the business and sometimes writes rent checks out of her personal account. The business is not doing well, and is several months behind on making rent payments. Her landlord sues Alright Business Services and Alisa for the rent. How will the landlord recover the unpaid rent?

Question 9 9. Which of the following incorporation methods is NOT a pass-through taxation entity?

Question 10 10. When a sole proprietorship is sold for a profit, the individual owner may be liable to pay:

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Question 11 11. What is an annuity?

Question 12 12. Mrs. Sanders is one year from retirement and interested in investing in an annuity. Which annuity fits her needs best and why?

Question 13 13. Which of the following is NOT an aspect of a general partnership?

Question 14 14. Betty and Bert start a bicycle repair business. Betty runs the shop and Bert fixes the bikes. Bert repairs Bea's bike, but he forgets to tighten the bolts on her seat. Bea falls off the bike and is injured. She sues the bike shop and is awarded a money judgment. Which of the following is true?

Question 15 15. Which of the following is NOT an example of a current business expense?

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Question 16 16. Which of the following is NOT a capital expenditure?

Question 17 17. A single-serve coffee machine worth $30,000 can make 60,000 cups of coffee in its life. Using the units of production depreciation method, what is the depreciation for the year where 5,000 cups of coffee were made?

Question 18 18. A printer worth $30,000 with a life expectancy of 5 years has a yearly depreciation of what using the straight-line depreciation method?

Question 19 19. What is tax levied by the government on money earned in the previous year?

Question 20 20. What is the term for tax levied by the government on things that are purchased?

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Question 21 21. Which of these is FALSE about payroll taxes?

Question 22 22. What are payroll taxes?

Question 23 23. A person appointed to take care of all issues dealing with an estate is known as what?

Question 24 24. What type of trust is commonplace for a will?

Question 25 25. Consider the following. You invest $75,000 in post-tax dollars in an immediate annuity. Payments are $5,000 per year. The IRS thinks you'll live another 20 years. How much of each payment is tax-free income?

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Question 26 26. The IRS states that to determine the value of the inventory that you have, you must value the inventory at what point in the year?

Question 27 27. Joe's Bakery bought a new delivery truck. They plan on keeping the truck for a period of five years. The owner knows that the truck will lose usefulness each year. What can he do to ease taxes on this asset?

Question 28 28. Yoho Motors files for bankruptcy. The company's creditors then seek payment from the corporation and the shareholders. Why will the creditors NOT be able to recover their debts from the shareholders?

Question 29 29. What is the major risk of organizing and selling a sole proprietorship?

Question 30 30. Mr. Murray just graduated from college and landed his dream job. On his first day, he attends orientation, where the human resource representative explains retirement options. Which annuity option should Mr. Murray choose if he has a high risk tolerance?

Corporations, Partnerships & Taxes Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Accounting 307: Federal Income Taxes  /  Business Courses
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