FP2 - Unit 5 Review

Supervised by the Federal Reserve Board, Triton Inc. provides investment advisory services, insurance underwriting, securities underwriting, and merchant banking services. Triton Inc. is most likely which business type?

• credit union

• accounting firm

• commodities investor

• financial holding company

Griffin is meeting with the financial adviser to see which investment would allow him to report less on his tax return in order to have less money taken by the government. Which type of investment is Griffin looking for?

• A tax shelter

• a tax bracket

• a subsidiary shelter

• a gains tax

Upon the death of his uncle, Erik was told he would have to pay taxes on the car his uncle left to him. The uncle's wife was free from paying taxes on the items left to her. Why?

• His aunt's earning potential is diminished due to age.

• Estate taxes only apply to heirs and not living spouses.

Rhondi paid a tax that was included in the price of his new Porsche. This ad valorem tax is called a/an:

• gift tax

• sales tax

• excise tax

• luxury tax

Shik has an investment that bears interest that is free from federal or state income tax. This investment is considered:

• tax-exempt

• tax-deferred

• a value stock

• a discretionary tax

Six months ago, Xander bought 500 shares of stock at $25 per share. Today, he sold all 500 shares for $48 per share. What type of tax is Xander obligated to pay as a result of this financial transaction?

• Income Tax

• Capital Gains Tax

• Property Tax

• Sales Tax

An individual with a higher income who pays a larger percentage of income tax than an individual with a lower income is in a:

• A. flat tax system.

• B. regressive tax system.

• C. progressive tax system.

• D. proportional tax system.

In his role as a virtual auditor, what must Jermaine do after identifying a potential compliance issue?

• find out who was responsible for recording the questionable transactions

• enter all questionable transactions into the operational financial system

• delete all exceptions and questionable transactions from the system

• link all related questionable transactions

Compliance in the finance industry involves financial institutions operating within:

• specific territories.

• organizational plans.

• regulatory guidelines.

• different relationships.

Karlie received the gift of a car from her cousin Jayla for much less than the actual value. Who, as required by law, pays the gift tax on the car?

• Karlie

• Jayla

• The car is a tax exempt gift

• They split it evenly