This quiz works best with JavaScript enabled. Home > Finance > Taxation > Income Tax Planning > Income Tax Planning – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Income Tax Planning Quiz 6 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A person who creates and signs the promissory note and agrees to pay it on a certain date is called the A) Co-signer. B) Payee. C) Negotiator. D) Maker. Show Answer Correct Answer: D) Maker. 2. A government tax imposed on individuals or entities (taxpayers) that varies with the income or profits (taxable income) of the taxpayer. A) Liabilities. B) Income tax. C) Sales tax. D) Percent change. Show Answer Correct Answer: B) Income tax. 3. What is the first step of the decision making process? A) Identify the decision. B) Identify resources. C) Evaluating the decision. D) Identify options. Show Answer Correct Answer: A) Identify the decision. 4. Which of the following would probably be a short-term financial goal? A) Purchasing a new CD. B) Buying a new luxury automobile. C) Going on a three-week cruise. D) Going to college. Show Answer Correct Answer: A) Purchasing a new CD. 5. The amount of money left after all deductions have been taken from the gross pay earned in a pay period. A) Commission. B) Gross Pay. C) Pay Rate. D) Net Pay. Show Answer Correct Answer: D) Net Pay. 6. A company sponsored plan where you determine how to invest your money is called a(n) A) IRA. B) Pension plan. C) Annuity. D) 401(k) plan. Show Answer Correct Answer: D) 401(k) plan. 7. Amounts owed to others is called what? A) Liabilities. B) Assets. C) Investment. D) None of above. Show Answer Correct Answer: A) Liabilities. 8. What is the greatest source of expenditure for the federal government? A) Health. B) Education. C) Social welfare. D) Defence. Show Answer Correct Answer: C) Social welfare. 9. In tax avoidance- A) Not obey legal provision. B) Avail benefit of loopholes. C) Misinterpretation of provisions. D) All the above. Show Answer Correct Answer: B) Avail benefit of loopholes. 10. An item of value pledged as a guarantee for payment of a loan which can be repossessed by the lender if the loan is not paid back. A) Collectible. B) Collateral. C) Net worth. D) Asset. Show Answer Correct Answer: B) Collateral. 11. Which of the following should not be paid for with an emergency savings fund? A) Replacing a broken down transmission in your car. B) A down payment for a new car after your previous car was totaled. C) Repairing your car after a fender bender. D) Getting a regular oil change to keep your car running. Show Answer Correct Answer: D) Getting a regular oil change to keep your car running. 12. STATE which of the 6 steps to financial goal planning is represented in this scenario: "Mary schedules a meeting with a financial adviser at E*Trade to discuss her portfolio." A) Determining Your Financial Situation. B) Developing Your Goals. C) Identifying Your Options. D) Evaluate Alternatives. E) Create and Use a Plan of Action. Show Answer Correct Answer: D) Evaluate Alternatives. 13. Three friends are all taking out loans. Essie is taking out student loans for college, Jalin is taking out a car loan for a new car, and Nicole is getting a mortgage to buy a house. Which of the friends are opening up good debt? A) Essie and Jalin. B) Jalin and Nicole. C) Essie and Nicole. D) Essie and Jalin. Show Answer Correct Answer: C) Essie and Nicole. 14. Cami Bartosz calculated that she owed taxes of $ 254 and had $ 278 withheld from her pay during the year. This would result in A) A refund of $ 278. B) Additional taxes owed of $ 254. C) Additional taxes owed of $ 24. D) A refund o $ 24. Show Answer Correct Answer: D) A refund o $ 24. 15. A computer program that organizes data in columns and rows and can perform calculations using the data is A) A spreadsheet. B) A schedule. C) A calculator. D) A database. Show Answer Correct Answer: A) A spreadsheet. 16. The idea that you should put money into a savings account as soon as you receive any income and before you pay any expenses or spend any money. A) Plan ahead. B) Saving for a rainy day. C) Personal financial planning. D) Pay yourself first. Show Answer Correct Answer: D) Pay yourself first. 17. This insurance provides cash payments for a limited time to individuals who are out of work for a reason other than illness. A) Disability income insurance. B) Survivors insurance. C) Unemployment insurance. D) Retirement insurance. Show Answer Correct Answer: C) Unemployment insurance. 18. Subject matter of Tax Planning is- A) Heads of Income. B) Deductions. C) Investment options. D) All the above. Show Answer Correct Answer: D) All the above. 19. Most people plan to work A) More years than they actually do. B) Until they are 60 years of age. C) Only until they qualify for their company retirement. D) Until they are fired or forced to retire. Show Answer Correct Answer: A) More years than they actually do. 20. Calculate the missing amount for C.Assets A) $ 33, 000. B) $ 20, 800. C) $ 73, 400. D) $ 62, 200. Show Answer Correct Answer: C) $ 73, 400. 21. In the 50-30-20 budgeting method, saving for emergency expenses would fall under which category? A) 50. B) 30. C) 20. D) None; it's part of pay yourself first. Show Answer Correct Answer: C) 20. 22. If you leave a company before the required minimum of years to retain your pension, what happens to the money? A) You receive 1/2 of it when you leave the company. B) You receive 1/3 of it when you leave the company. C) You receive all of the money and can roll it into your new retirement plan. D) You don't receive any of the money. Show Answer Correct Answer: D) You don't receive any of the money. 23. The loss of an asset's value over time is called A) Normalization. B) Equalization. C) Amoritization. D) Depreciation. Show Answer Correct Answer: D) Depreciation. 24. The two elements in budgeting and planning A) Income and net worth. B) Net worth and liabilities. C) Income and expenses. D) Expenses and assets. Show Answer Correct Answer: C) Income and expenses. 25. A list of all of a person's assets and liabilities at a specific point in time. A) Cash Flow. B) Balance Sheet. C) Asset. D) None of above. Show Answer Correct Answer: B) Balance Sheet. 26. If you have an IRA, you are required to start drawing income from it at age A) 50. B) 591/2. C) 55. D) 621/2. Show Answer Correct Answer: D) 621/2. 27. Deciding where to put your precious earnings. Money can go to living expenses, savings, investments, and toward discretionary purchases (like that new pair of shoes!). A) Financial Plan. B) Budget. C) Cash Mangement. D) Investment. Show Answer Correct Answer: C) Cash Mangement. 28. Which type of setting would have the highest rent? A) Rural Area. B) Suburb. C) Urban/Downtown Area. D) None of above. Show Answer Correct Answer: C) Urban/Downtown Area. 29. In personal finance, one makes decisions based on needs vs. wants. What is considered a need? A) Something ones does not budget for. B) Something one would like to have. C) Something one can afford. D) Something one cannot live without. Show Answer Correct Answer: D) Something one cannot live without. 30. STATE which of the 6 steps to financial goal planning is represented in this scenario: "Craig decides it's time to expand his newspaper by adding on new staff members." A) Determining Your Financial Situation. B) Developing Your Goals. C) Identifying Your Options. D) Evaluate Alternatives. E) Create and Use a Plan of Action. Show Answer Correct Answer: C) Identifying Your Options. ← PreviousNext →Related QuizzesTaxation QuizzesFinance QuizzesIncome Tax Planning Quiz 1Income Tax Planning Quiz 2Income Tax Planning Quiz 3Income Tax Planning Quiz 4Income Tax Planning Quiz 5Income Tax Planning Quiz 7Income Tax Planning Quiz 8Income Tax Planning Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books