This quiz works best with JavaScript enabled. Home > Finance > Taxation > Income Tax Planning > Income Tax Planning – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Income Tax Planning Quiz 4 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which one is a fixed expense A) Entertainment. B) Rent. C) Gifts. D) Snacks. Show Answer Correct Answer: B) Rent. 2. Net worth is the difference between: A) Assets and interest. B) Liabilities and growth. C) Assets and liabilities. D) Growth and investments. Show Answer Correct Answer: C) Assets and liabilities. 3. What a person finds important and valuable, often in a moral sense. A) Want. B) Needs. C) Values. D) None of above. Show Answer Correct Answer: C) Values. 4. Most IRAs are invested in A) Stocks. B) Bonds. C) Gold and silver. D) Mutual funds. Show Answer Correct Answer: D) Mutual funds. 5. Those things that you own A) Gold. B) Budget. C) Investment. D) Asset. Show Answer Correct Answer: D) Asset. 6. Joanne's dad makes $ 54, 000 every year. This is the amount of money he makes before taxes, insurance and other deductions are taken out of his paychecks. The amount of money he makes before these items are taken out is called his- A) Property tax. B) Income tax. C) Gross income. D) Net income. Show Answer Correct Answer: C) Gross income. 7. How do long-term goals differ from short-term goals? A) Long-term goals are less attainable than short-term goals. B) Long-term goals take longer to plan than short-term goals. C) Long-term goals require more money than short-term goals. D) Long-term goals require more preparation than short-term goals. Show Answer Correct Answer: D) Long-term goals require more preparation than short-term goals. 8. Which of the following is known as expenses that are not absolutely necessary? A) Credentials. B) Net. C) Gross. D) Discretionary. Show Answer Correct Answer: D) Discretionary. 9. When should you fill out a W-4? A) When you quit a job. B) Whenever you feel like it. C) When you have 401K benefits. D) When you start a new job. Show Answer Correct Answer: D) When you start a new job. 10. Something of value exchanged for something else of value is called A) Consideration. B) Negotiable. C) Contration. D) Warranty. Show Answer Correct Answer: A) Consideration. 11. The cost of owning a car includes A) Insurance. B) Repairs. C) Gas. D) All of these. Show Answer Correct Answer: D) All of these. 12. ..... are items such as utilities, rent, and food-items that one can't do without. A) Wants. B) Assets. C) Risks. D) Needs. Show Answer Correct Answer: D) Needs. 13. An individual or firm that advises clients on investment matters on a professional basis. A) Investment Advisor. B) Financial Advisor. C) Insurance Agent. D) Banker. Show Answer Correct Answer: A) Investment Advisor. 14. Making plans which are permissible under various provisions of the law is considered as A) Purposive tax planning method. B) Permissive tax planning method. C) Short-term tax planning method. D) None of above. Show Answer Correct Answer: B) Permissive tax planning method. 15. Which of the following describe to put in long-term storage? A) Discretionary. B) Variable expense. C) Archive. D) Safe deposit box. Show Answer Correct Answer: C) Archive. 16. The IRS has the legal right to audit your tax returns and supporting records for ..... years from the date of filing A) 4. B) 10. C) 2. D) 3. Show Answer Correct Answer: D) 3. 17. This planning involves the accumulation and management of property during one's lifetime and the distribution of one's property at death. A) Tax. B) Pension. C) Estate. D) None of above. Show Answer Correct Answer: C) Estate. 18. What is your teacher name? A) Percilla Ross. B) Priscilla Ross. C) Priciella Ross. D) None of above. Show Answer Correct Answer: B) Priscilla Ross. 19. STATE which of the 6 steps to financial goal planning is represented in this scenario: "George is using the SMART Goals acronym to plan out the future." A) Determining Your Financial Situation. B) Developing Your Goals. C) Identifying Your Options. D) Evaluate Alternatives. E) Create and Use an Action Plan. Show Answer Correct Answer: E) Create and Use an Action Plan. 20. Which of these is an expense A) Birthday check. B) Savings. C) Part time job salary. D) Cost of daily lunch. Show Answer Correct Answer: D) Cost of daily lunch. 21. What is an example of liabilities? A) Paid off house. B) Credit card debt. C) Paycheck. D) Savings account. Show Answer Correct Answer: B) Credit card debt. 22. Which type of tax planning methods that is executed at the end of the year to reduce taxable income legally? A) Purposive tax planning. B) Long-term tax planning. C) Permissive tax planning. D) Short-term tax planning. Show Answer Correct Answer: D) Short-term tax planning. 23. Setting financial goals is the ..... step in creating and using a budget. A) Third. B) First. C) Second. D) Final. Show Answer Correct Answer: B) First. 24. A measurable savings goal spells out ..... A) Why the money needs to be saved. B) How much money needs to be saved. C) What the money needs to be saved for. D) When the money will be saved. Show Answer Correct Answer: B) How much money needs to be saved. 25. The risk that you have been tricked or deceived when making an investment is called A) Market price risk. B) Inflation risk. C) Financial risk. D) Fraud risk. Show Answer Correct Answer: D) Fraud risk. 26. The amount you place in an investment is called: A) Rate. B) Principal. C) Interest. D) Time. Show Answer Correct Answer: B) Principal. 27. If you find that your budget is falling short each months, what smart actions could you take? A) Pick up extra shifts at work. B) Pay less on your cell phone bill. C) Put everything on a credit card and only pay the minimum amount due. D) Use emergency savings. Show Answer Correct Answer: A) Pick up extra shifts at work. 28. Money or debts you owe to others are called ..... A) Money. B) Liabilities. C) Assets. D) Debts. Show Answer Correct Answer: B) Liabilities. 29. A balance what is a record of assets and liabilities at a point in time. A) Sheet. B) Liabilities. C) Exemption. D) None of above. Show Answer Correct Answer: A) Sheet. 30. The potential risk that you will lose your money due to a company going bankrupt is called ..... risk. A) Fraud. B) Financial. C) Market. D) Corporate. Show Answer Correct Answer: B) Financial. ← PreviousNext →Related QuizzesTaxation QuizzesFinance QuizzesIncome Tax Planning Quiz 1Income Tax Planning Quiz 2Income Tax Planning Quiz 3Income 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