Chap001 - Test Bank Chapter 1, page 1 Chapter 1 Types of...

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Test Bank Chapter 1, page 1 Chapter 1 Types of Taxes and the Jurisdictions That Use Them True/False 1. Payment of a tax entitles the payer to a specific good or service from the government. Answer: False (Easy; LO 1) 2. A user fee entitles the payer to a specific good or service from the government. Answer: True (Easy; LO 1) 3. A tax is intended to deter or punish unacceptable behavior. Answer: False (Easy; LO 1) 4. A tax is a payment to support the cost of government. Answer: True (Easy; LO 1) 5. Under U.S. tax law, corporations are entities separate and distinct from their shareholders. Answer: True (Easy; LO 1) 6. The person who pays a tax directly to the government always bears the economic incidence of the tax. Answer: False (Medium; LO 1) 7. In some cases, the payer of a tax can shift the economic incidence of the tax to a third party. Answer: True (Easy; LO 1) 8. The U.S. government has jurisdiction to tax individuals who are not U.S. citizens but who are permanent U.S. residents. Answer: True (Medium; LO 1) 9. A tax with a graduated rate structure must have at least two brackets of tax base. Answer: True (Medium; LO 2) 10. A sales tax is an example of a transaction-based tax. Answer: True (Easy; LO 2)
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Test Bank Chapter 1, page 2 11. A tax on net income is an example of a transaction-based tax. Answer: False (Easy; LO 2) 12. A sales tax is an example of an activity-based tax. Answer: False (Easy; LO 2) 13. Ad valorem property taxes are the major source of revenue for local governments. Answer: True (Easy; LO 3) 14. Taxes on personal property are more difficult to administer and enforce than taxes on real property. Answer: True (Medium; LO 3) 15. A state government may levy either a sales tax or a use tax on consumers but not both. Answer: False (Medium; LO 3) 16. Sellers of retail goods are responsible for collecting sales tax from their customers and remitting the tax to the state government. Answer: True (Easy; LO 3) 17. Purchasers of consumer goods through the mail are responsible for paying use tax on goods for which sales tax was not collected by the seller. Answer: True (Medium; LO 3) 18. The majority of state governments raise revenue from both personal and corporate income taxes. Answer: True (Medium; LO 3) 19. The federal government imposed the first income tax to raise money to fight the War of 1812. Answer: False (Easy; LO 3) 20. The U.S. Constitution gives the federal government the power to impose a tax on income from whatever source derived. Answer: True (Medium; LO 3)
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Test Bank Chapter 1, page 3 21. The federal government collects more revenue from the corporate income tax than from the individual income tax. Answer: False (Medium; LO 3) 22. The federal government does not levy property taxes or a general sales tax. Answer: True (Easy; LO 4)
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This note was uploaded on 03/02/2011 for the course ACCY 450 taught by Professor Gilbert,j during the Spring '08 term at Northern Illinois University.

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Chap001 - Test Bank Chapter 1, page 1 Chapter 1 Types of...

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