Chapter 1, Problem 27DQ

14) When examining revenue transactions, which of the following transactions is classified as an exchange transaction? A) When a homeowner pays property taxes B) When a university receives a federal grant that mandates a certain type of research activity C) When an aquatic center receives cash for a group swim D) When an employer deducts money for state tax withholding

Which of the following statements are TRUE?(i) Interest expense incurred on loan to purchase motor cars for salesmen’s use is deductible as the salesmen use the cars only for meetings with customers and suppliers.(ii) Expenses which qualify for special deduction under Section 14Q relates to capital expenditure which do not qualify for capital allowances claim.(iii) Donation of computers to institutions of public character by an individual is not deductible.

Which of the following is not a true statement regarding revenues from various types of nonexchange transactions?   Derived tax revenues occur as a result of sales and or income tax.   Imposed nonexchange revenues consist of only fines and penalties assessed by the governing agency.   Government mandated nonexchange transactions includes grants from the federal government to the local public-school system for a free lunch program.   Voluntary nonexchange transactions can originate from a governmental agency or private citizen organization.   Imposed nonexchange transactions revenue recognition is made in the time period when the resulting resources are required to be used or in the first period in which use is permitted.