Sale of goods or services by any person or entity may result to the payment of income tax.
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Identify which statement is incorrect: *
a. Sale of goods or services by any person or entity may result to the payment of income tax.
b. Sale of goods or services by any person or entity may result to the payment of business tax.
c. Sale of goods or services by any person or entity may result to the payment of donor's tax.
d. All statements are correct.
e. All statements are incorrect.
Step by step
Solved in 2 steps
- Identify which statement is incorrect: Sale of goods or services by any person or entity may result to the payment of income tax. Sale of goods or services by any person or entity may result to the payment of business tax. Sale of goods or services by any person or entity may result to the payment of donor's tax. All statements are correct. All statements are incorrect.For tax purposes, one of the requirements to recognize income is: A) The transaction does not have to be completed. B) The income cannot be tax-exempt. OC) The transaction does not have to have an economic benefit. J D) None of these.a. Define the term constructive receipt. Explain its importance. b. Explain three restrictions on the concept of constructive receipt. a. Define the term constructive receipt. Explain its importance. C O A. Under the concept of constructive receipt, income is taxed once earned but not received by the cash-basis taxpayer. The taxpayer cannot defer the tax by refusing to accept payment. OB. Under the concept of constructive receipt, income is taxed when it becomes available to the taxpayer. The taxpayer cannot defer the tax by refusing to accept payment. O C. Under the concept of constructive receipt, income is taxed once earned and received by the cash-basis taxpayer. The taxpayer can defer the tax by refusing to accept payment. O D. Under the concept of constructive receipt, income is taxed when it is received by the taxpayer. The taxpayer can transfer the income to another person to avoid paying taxes.
- Which of the following is not a sale and therefore is not subject to the value-added tax? Transfer, use or consumption not in the ordinary course of business of goods or properties ordinarily intended for sale or use in the course of business. Distribution or transfer to shareholders or investors of share in the profits of a VAT-registered person. Distribution or transfer to creditors in payment of debt. Consignment sales.Which option is the correct definition of tax base? Select one: a. Tax base is the amount the asset or liability is recorded at in the accounting records. b. Tax base is a comparing the balance sheet derived using accounting rules with balance sheet that would be derived from taxation rules c. Tax base is the recognition of assets and liabilities in the balance sheet based on the differences between accounting and tax values of assets and liabilities. d. Tax base is defined as the amount that is attributed to an asset or liability for tax purposes.Which of the following statements is true? A.Deductions are not allowed unless there is a specific law authorizing the deduction. B.Deductions are defined simliar to the gross income definition. C.Deductions are always allowed for expenses related to a trade or business. D.Deductions are never allowed for personal expenses.
- a. Define the term constructive receipt. Explain its importance. b. Explain three restrictions on the concept of constructive receipt. a. Define the term constructive receipt. Explain its importance. O A. Under the concept of constructive receipt, income is taxed once earned but not received by the cash-basis taxpayer. The taxpayer cannot defer the tax by refusing to accept payment. B. Under the concept of constructive receipt, income is taxed when it becomes available to the taxpayer. The taxpayer cannot defer the tax by refusing to accept payment. O C. Under the concept of constructive receipt, income is taxed once earned and received by the cash-basis taxpayer. The taxpayer can defer the tax by refusing to accept payment. O D. Under the concept of constructive receipt, income is taxed when it is received by the taxpayer. The taxpayer can transfer the income to another person to avoid paying taxes. b. Explain three restrictions on the concept of constructive receipt. Income is not…Which of the following is an acceptable method of accounting under the tax law? The accrual method The hybrid method The cash method All of the above are acceptable None of the aboveSome items are treated as a deduction for tax purposes when they are paid but are recognised as expenses when they are accrued for accounting purposes. Which of the following items are of that type? a. Warranty costs b. Goodwill impairment c. Fines d. Entertainment expenses e. Prepaid insurance
- Which of the following may not be an effect of VAT on the accounting records of a company? i. The formation of a payable under the current liabilities ii. An addition to the cost of a purchase iii. The formation of a tax asset arising from a sale iv. A receivable from the government arising from a sale v. All of the other choices may be an effect of VAT.An income tax is an example of which of the following?a. Derived tax revenue.b. Imposed nonexchange revenue.c. Government-mandated nonexchange revenue.d. Voluntary nonexchange transaction1.The definition of gross income in the tax law is: A. All items specifically listed as income in the tax law B. All cash payments received for goods provided and services performed C. All income from whatever source derived D. All income from whatever source derived unless the income is earned illegally 2.Which of the following is not taxable for income tax purposes? A.Prizes B.Severance pay C.Gifts D.Partnership income E.All of the above are taxable 3.All of the following items are taxable to the taxpayer receiving them, except: A.Life insurance proceeds B.Unemployment compensation C.Embezzled funds D.Prizes E.Gambling winnings