final review.docx - Review Questions for Final ACCT 330...

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Review Questions for Final, ACCT 330Indicate whether each of the following is true or false. If false, explain why it is false.1. Cliff, age 19, is a dependent of his parents. He has wages of $4,500 and no other income or deductionsfor 2017. Cliff will have $0 taxable incomeCh2: True: needs to make at least the standard deduction ($6,350) earned income +350.2. Bill, age 25 and a law student is supported predominately by his parents, is a full-time student and earned $2,800 during the year. His parents may still claim him if they meet other dependency tests.
3. Proportional stock dividends are not taxable and have no effect on the taxpayer’s total basis in stock.
4. In order to qualify for head of household status for maintaining a household for a child, one must also claim the dependency exemption for the child.
5. Social security benefits may be either taxable or nontaxable depending upon income but no more than 85% of social security benefits would be taxable.
6. Gifts over a certain amount are taxable income to the recipient.
7. The basis of gift property depends upon whether it has appreciated or depreciated at the time of the gift.
8. Conner Corporation has 100 full-time employees. Conner has a health plan that covers three shareholder officers and two other executives. Although Conner will be able to deduct the cost of the health care plan, the covered employees will have to recognize the premiums as compensation and will not be able to exclude those payments from income. Ch5: True: To be excludable it must not discriminate to highly compensated executives,
9. A state tax refund must be included in taxable income in the year received.
10. Tax deductions for personal expenses are allowed unless disallowed by a specific provision of the tax law.

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