This quiz works best with JavaScript enabled. Home > Finance > Taxation > Income Tax Planning > Income Tax Planning – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Income Tax Planning Quiz 2 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. For developing country especially, government usually perform a very ..... to get tourism started A) Passive. B) Active. C) Intermediate. D) None of above. Show Answer Correct Answer: B) Active. 2. These expenses are costs that occur on a regular basis. A) Variable. B) Fixed. C) Estate. D) None of above. Show Answer Correct Answer: B) Fixed. 3. Your birth certificate and Social Security card would likely be contained in which category of your financial records filing system? A) Money management records. B) Housing records. C) Tax records. D) Personal records. Show Answer Correct Answer: D) Personal records. 4. What is a cash surplus A) When expenses exceeds income. B) When you are insolvent. C) When income exceeds expenses. D) Credit card balance. Show Answer Correct Answer: C) When income exceeds expenses. 5. A legally enforceable agreement between two or more people is called a(n) A) Promissory note. B) Consideration. C) Contract. D) Agreement. Show Answer Correct Answer: C) Contract. 6. Which of the following is NOT an objective of tax planning? A) To minimize income. B) To reduce tax payable. C) To maximize relief. D) To minimize tax litigation. Show Answer Correct Answer: A) To minimize income. 7. When you make a loan payment, your A) Net worth is unaffected. B) Net income increases. C) Cash outflows decrease. D) Liabilities decrease. Show Answer Correct Answer: D) Liabilities decrease. 8. Tax Planning is opted in the reference of the following- A) Only Income Tax. B) Only Direct Tax. C) Direct & Indirect Tax both. D) Central Taxes. Show Answer Correct Answer: C) Direct & Indirect Tax both. 9. What is NOT a reason you can take an early withdrawal from your IRA without penalty? A) To pay taxes owed to the IRS. B) To pay for higher education. C) To pay for unreimbursed medical expenses. D) Down payment on your first home. Show Answer Correct Answer: A) To pay taxes owed to the IRS. 10. This is a series of regular payments made to a retired worker under an organized plan. A) Pension. B) Outflows. C) Allowances. D) None of above. Show Answer Correct Answer: A) Pension. 11. The total amount of an employee's earnings before deductions are taken out. A) Cash flow. B) Gross pay. C) Net pay. D) Net worth. Show Answer Correct Answer: B) Gross pay. 12. What are the four elements of a contract that makes it legally binding A) Agreement, consolidation, legality, solvency. B) Agreement, consideration, contractual capacity, legality. C) Adoration, consideration, equality, taxes. D) Agreement, value, signature, notarization. Show Answer Correct Answer: B) Agreement, consideration, contractual capacity, legality. 13. What is considered to be "retirement" age, when it is acceptable to begin taking IRA distributions without penalty? A) 59 1/2. B) 70 1/2. C) 50. D) 65. Show Answer Correct Answer: A) 59 1/2. 14. Mr. Johnson received $ 1, 750 on his paycheck for two weeks. He got $ 275 taken out of his check for taxes and $ 125 for his health insurance. The amount he had left is defined as his- A) Net income. B) Gross income. C) Property tax. D) Income tax. Show Answer Correct Answer: A) Net income. 15. Which one of the following is NOT a mandatory withholding from your gross pay? A) Social Security. B) Federal Tax. C) Union Dues. D) Medicare/Medicaid. Show Answer Correct Answer: C) Union Dues. 16. The difference between your personal assets and your personal liabilities is your A) Cash outflow. B) Net worth. C) Net income. D) Cash inflow. Show Answer Correct Answer: B) Net worth. 17. Take-home pay is A) The amount of a paycheck before taxes and other payroll deductions. B) The money you have available to spend as a result of working plus any other income, such as a gift or stock dividend. C) The amount you will receive when you cash your paycheck. D) Cash inflows minus cash outflows. Show Answer Correct Answer: C) The amount you will receive when you cash your paycheck. 18. Stevie earned $ 600 this week. She used $ 100 toward paying off her credit card and $ 20 went into savings, for a total of $ 120, which is 20% of her income. What money managing system is she likely using? A) The Categories Method. B) Investing in stocks. C) The 50-30-20 Method. D) Pay yourself first. Show Answer Correct Answer: C) The 50-30-20 Method. 19. You never know what's going to happen in life, no matter how hard you plan. Luckily, there are insurance companies available to try to take some of the pain out of the disasters that befall all of us at some time or other A) Retirement Planning. B) Financial Planning. C) Risk Management. D) Budget. Show Answer Correct Answer: C) Risk Management. 20. If you worked 40 hours per week at $ 10 per hour, what is your gross income for the week? A) $ 40. B) $ 227. C) $ 4000. D) $ 400. Show Answer Correct Answer: D) $ 400. 21. Deductions are also known as .....? A) Withdrawals. B) Withholdings. C) Subtractions. D) None of the above. Show Answer Correct Answer: B) Withholdings. 22. The total amount of money earned before withholdings A) Net pay. B) Gross pay. C) Payroll deductions. D) None of these. Show Answer Correct Answer: B) Gross pay. 23. A unit rate used to compare prices. A) Income. B) Unit price. C) Sales tax. D) Percent decrease. Show Answer Correct Answer: B) Unit price. 24. When studying finance or economics, the cost of a decision is also known as a(n) A) Long-term cost. B) Personal cost. C) Opportunity cost. D) Long-term cost. Show Answer Correct Answer: C) Opportunity cost. 25. Which of the following obligations are required to be settled prior to the distribution of estate? I. Burial/ Funeral expensesII. Settlement of debtsIII. Execution of WasiyyahIV. Distribution of Estate under Faraid A) I and II. B) I, II, and III. C) II and III. D) All the above. Show Answer Correct Answer: D) All the above. 26. Choose the "Unexpected Expense" A) Netflix subscription bill. B) Storm damage repairs. C) Groceries each week. D) School clothes. Show Answer Correct Answer: B) Storm damage repairs. 27. What percentage of your income should you use towards savings? A) 20%. B) 30%. C) 50%. D) 80%. Show Answer Correct Answer: A) 20%. 28. A goal to save money for a new saxophone is ..... A) Time-based. B) Specific. C) Attainable. D) Measurable. Show Answer Correct Answer: B) Specific. 29. How long do you keep pay stubs? A) Until 2 years past employment. B) 3 months. C) Until you verified your W-2. D) Until you verified your bank statement. Show Answer Correct Answer: C) Until you verified your W-2. 30. A tax on gasoline is known as a(n) A) Excise tax. B) Gift tax. C) Income tax. D) Estate tax. Show Answer Correct Answer: A) Excise tax. ← PreviousNext →Related QuizzesTaxation QuizzesFinance QuizzesIncome Tax Planning Quiz 1Income Tax Planning Quiz 3Income Tax Planning Quiz 4Income Tax Planning Quiz 5Income Tax Planning Quiz 6Income Tax Planning Quiz 7Income Tax Planning Quiz 8Income Tax Planning Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books