Practice Quiz Ch 7,8, and 9

Choose the best answer. | a. | The tax rates are applied to the income from a corporation's short period and then the tax is annualized. |

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| b. | The income from the short period is annualized and the corporation's tax liability is the full amount calculated on the annualized income. |

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| c. | The tax liability for a short period is calculated by applying the tax rates to the income from the short period. |

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| d. | Once the tax on the annualized income is calculated, the tax must be prorated back to the short period. |

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status: incorrect (0.0) 

correct: d 

your answer: b 

feedback: Incorrect. The tax liability needs to be prorated back to the short period. |

2 | With regard to tax years, which statement is true? | a. | An individual does not need IRS approval to change tax year-end. |

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| b. | Deferring the payment of tax is a legitimate reason to have a fiscal year-end. |

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| c. | Partnerships and S corporations may choose any year-end since they are taxable entities. |

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| d. | The choice to file on a fiscal-year basis must be made with an initial tax return or later requested and approved by the IRS. |

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status: incorrect (0.0) 

correct: d 

your answer: b 

feedback: Incorrect. Deferring the payment of federal tax is not an acceptable reason to change to a fiscal year-end. |

3 | Which of the following usually file tax returns on a calendar-year basis? | a. | S corporations and individuals, but not partnerships |

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| b. | Individuals and partnerships, but not S corporations |

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| c. | Individuals, partnerships, and S corporations |

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| d. | Individuals, but not partnerships or S corporations |

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status: incorrect (0.0) 

correct: c 

your answer: d 

feedback: Incorrect. Individuals, partnerships, and S corporations all usually file on a calendar-year basis. |

4 | In regards to accounting methods: | a. | The cash method requires the deduction of expenses...