Test Bank For Personal Financial Planning 14th Edition by Billingsley

Test Bank For Personal Financial Planning 14th Edition by Billingsley

Chapter 3—Preparing Your Taxes

1. The federal personal income tax is a progressive tax.

a.  True

b.  False

ANSWER:   True

POINTS:   1

DIFFICULTY:   Easy

LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1

NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills

STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows
United States – AK – DISC: Taxes

KEYWORDS:   Bloom’s: Remembering

2. The federal personal income tax is a flat tax.

a.  True

b.  False

ANSWER:   False

POINTS:   1

DIFFICULTY:   Easy

LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1

NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills

STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows
United States – AK – DISC: Taxes

KEYWORDS:   Bloom’s: Remembering

3. Tax avoidance is legal, tax evasion is illegal.

a.  True

b.  False

ANSWER:   True

POINTS:   1

DIFFICULTY:   Easy

LEARNING OBJECTIVES:   PFIN.BILL.17.3-5 – LO: 3-5

NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills

STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows
United States – AK – DISC: Taxes

KEYWORDS:   Bloom’s: Remembering

4. One’s marginal tax rate is typically lower than one’s average tax rate.

a.  True

b.  False

ANSWER:   False

POINTS:   1

DIFFICULTY:   Moderate

LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1

NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills

STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows
United States – AK – DISC: Taxes

KEYWORDS:   Bloom’s: Analyzing

5. One’s average tax rate is typically lower than one’s marginal tax rate.

a.  True

b.  False

ANSWER:   True

POINTS:   1

DIFFICULTY:   Moderate

LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1

NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills

STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows
United States – AK – DISC: Taxes

KEYWORDS:   Bloom’s: Analyzing

6. If you have any earned income, you are required to file a tax return.

a.  True

b.  False

ANSWER:   False

POINTS:   1

DIFFICULTY:   Moderate

LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1

NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills

STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows
United States – AK – DISC: Taxes

KEYWORDS:   Bloom’s: Remembering

7. The main objective of tax planning is to maximize the amount of money you keep by minimizing the amount of taxes you pay.

a.  True

b.  False

ANSWER:   True

POINTS:   1

DIFFICULTY:   Easy

LEARNING OBJECTIVES:   PFIN.BILL.17.3-6 – LO: 3-6

NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills

STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows
United States – AK – DISC: Taxes

KEYWORDS:   Bloom’s: Understanding

8. If you are eligible to receive a tax refund, you will have to file a tax return to get the refund.

a.  True

b.  False

ANSWER:   True

POINTS:   1

DIFFICULTY:   Easy

LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1

NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills

STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows
United States – AK – DISC: Taxes

KEYWORDS:   Bloom’s: Remembering

9. Income tax refunds are automatically sent to those who qualify for refunds no later than April 15.

a.  True

b.  False

ANSWER:   False

POINTS:   1

DIFFICULTY:   Easy

LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1

NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills

STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows
United States – AK – DISC: Taxes

KEYWORDS:   Bloom’s: Remembering

10. As a single taxpayer with no dependents, one is generally eligible to file as “head of household.”

a.  True

b.  False

ANSWER:   False

POINTS:   1

DIFFICULTY:   Easy

LEARNING OBJECTIVES:   PFIN.BILL.17.3-1 – LO: 3-1

NATIONAL STANDARDS:   United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills

STATE STANDARDS:   United States – KS – DISC: Financial Analysis and Cas – DISC: Financial Analysis and Cash Flows
United States – AK – DISC: Taxes

KEYWORDS:   Bloom’s: Remembering