,1. Multiple Choice: Which of the following is considered a
deductible expense for a corporation?
A) Charitable contributions
B) Political contributions
C) Capital expenditures
D) Personal expenses
Correct Answer: A) Charitable contributions
Rationale: Under most tax jurisdictions, charitable contributions
made by a corporation are deductible expenses, whereas political
contributions, capital expenditures, and personal expenses are not.
2. Fill-in-the-Blank: The ________ method of accounting
recognizes income when it is earned and expenses when they are
incurred.
Correct Answer: Accrual
Rationale: The accrual method of accounting matches income
and expenses to the period in which they are incurred, providing a
more accurate picture of financial health than the cash method.
3. True/False: For tax purposes, fines and penalties paid to the
government are generally deductible.
, Correct Answer: False
Rationale: Fines and penalties paid to the government are not
deductible as they are considered violations of law and not
business-related expenses.
4. Multiple Response: Select all that apply. Which of the following
are taxable events for an individual?
A) Sale of stocks
B) Inheritance of property
C) Gift received from a friend
D) Winning a lottery
Correct Answers: A) Sale of stocks, D) Winning a lottery
Rationale: The sale of stocks and winning a lottery are considered
taxable events. Inheritance of property may be subject to estate tax
but is not a taxable event for the recipient, and gifts received are
generally not taxable to the recipient.
5. Multiple Choice: In the context of international taxation, what
does the term 'Double Taxation' refer to?
A) Taxing twice on the same income in one country
B) Taxing both corporate income and shareholder dividends
C) Taxing the same income in two different countries
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