Ch 7 Quiz
1. Peggy is in the business of factoring accounts receivable. Last year, she purchased a $30,000
account receivable for $25,000. This year, the account was settled for $25,000. How much loss
can Peggy deduct and in which year?
a. $5,000 for the
Ch 5 Quiz
1.The taxpayers marginal tax bracket is 25%. Which would the taxpayer prefer?
a. $1.00 taxable income rather than $1.00 tax-exempt income.
b. $.80 tax-exempt income rather than $1.00 taxable income.
c. $1.25 taxable income rather than $1.00 tax-
1. Larry, a calendar year cash basis taxpayer, has the following transactions:
Salary from job
Alimony paid to ex-wife
Based on this information, Larry has:
a. AGI of $46,500.
b. AGI of $51,000.
c. AGI of $60,000.
Ch 10 Quiz
1. Jeanne had an accident while hiking on vacation. She sustained nose injuries that required cosmetic
surgery. While having the surgery done to restore her appearance, she had additional surgery
done to reshape her chin, which was not injured
Ch 9 Quiz
1. A worker may prefer to be treated as an independent contractor (rather than an employee) for which
of the following reasons:
a. Avoids the cutback adjustment as to business meals.
b. All of the self-employment tax is deductible for income tax
Solutions for Chapter 10
Auditing Revenue and Related Accounts
10-1. The cycle or process approach involves organizing the audit around related activities.
This approach results in an effective yet efficient audit. When auditing sales tr
Identify the choice that best completes the statement or answers the question.
1. Grape Corporation purchased a machine in December of the current year. This was the only asset purchased
during the current year. The machine was