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TAX CH-1 BASIC CONCEPTS CH-2 RESIDENCE AND SCOPE OF TOTAL INCOME

Total questions: 105

Worksheet time: 4hrs 30mins

Name
Class
Date
1.

How many heads are there for the computation of income

a)

Three

b)

Six

c)

Five

d)

Four

2.

Following are the different heads of income under income tax Act.

a)

Income U/H Salary

b)

Income U/H business and profession

c)

Income U/H Lottery

d)

Income U/H other sources

e)

Income U/H land

3.

Followings are the examples of a person under income tax Act

a)

Nanavati hospital

b)

Amitabh bachhan & co.

c)

Abhishek & Aishwarya pvt. Ltd.

d)

Carona virus

4.

Income of the previous year put to tax in Assessment year, the statement is____.

a)

True

b)

False

c)

May be

d)

True but with certain exceptions

5.

Which of the following is not included in the income?

a)

Tip received by the zomato delivery boy

b)

Pin money received from the husband

c)

Own money found in old books

d)

Application of an income

6.

The full form of MMR is

a)

Maximum Money Rate of Tax

b)

Minimum Marginal Rate of Tax

c)

Maximum Marginal Rate of Tax

d)

Minimum Money Rate of Tax

7.

An assessee is always a person but a person need not to be assessee the statement is

a)

May be

b)

True

c)

False

d)

Partial true

8.

In case of non resident shipping co. the income of PY is put to tax in PY itself as

a)

14% of total freight

b)

7% of total freight

c)

5% of total freight

d)

6% of total freight

9.

Assessment year is known as

a)

The year in which assessee earn the income

b)

The year in which assessee pays the tax on income earn in PY

c)

The year in which assessee pay tax in advance

d)

The year in which assessee find excuse to not to pay any taxes

10.

Income tax is

a)

a direct tax

b)

an indirect tax

c)

business tax

d)

office tax

11.

The year in which tax on income is computed and determined is called

a)

Previous Year

b)

Current Year

c)

Assessment Year

d)

Next Year

12.

The person who has to pay tax or other sum of money payable under IT Act is

a)

a debtor

b)

a creditor

c)

an assessee

d)

a client

13.

Previous year refers to the financial year comprising

a)

Twelve months preceeding the assessment year

b)

Twelve months following the assessment year

c)

Both

d)

None of these

14.

Income tax is levied by –––––– government

a)

State

b)

Central

c)

Both

d)

None of these

15.

Income tax rules came into existence in the year

a)

1962

b)

1961

c)

1956

d)

1964

16.

There are ––––––––––––– heads of income

a)

2

b)

3

c)

4

d)

5

17.

Income Tax Act was passed in the year

a)

1961

b)

1962

c)

1963

d)

1960

18.

IT ACT came in to the force since first April

a)

True

b)

False

19.

Which type of rates are decided by Finance Act?

a)

Bank Rate

b)

Interest Rate

c)

Income Tax Rate

d)

None

20.

1.A company may be not ordinarily resident in a year

a)

True

b)

False

21.

Income from a business in Pakistan is taxable in the case of non resident in India

a)

True

b)

False

22.

A non resident Indian is not liable to pay tax on his income received in India.

a)

True

b)

False

23.

A person can be resident in more than one country.

a)

True

b)

False

24.

There is no relation of the residential status of individual to his citizenship.

a)

True

b)

False

25.

The residential status of an assessee may change in every the previous year

a)

True

b)

False

26.

LPG subsidy received by an Individual in included in his income

a)

True

b)

False

27.

The income tax is a direct tax charged annually by the Central Govt.

a)

True

b)

False

28.

IT ACT came in to the force since first April

a)

True

b)

False

29.

To make savings by any family member is not treated as income

a)

True

b)

False

30.
Total income for the year
a)
gross income
b)
taxable income
c)
net pay
d)
unearned income
31.
Money that an employer takes from your paycheck to be used for taxes is called
a)
interest income
b)
withholding
c)
dividend income
d)
unearned income
32.
The deadline to file your annual tax return
a)
March 15
b)
April 30
c)
April 15
d)
March 30
33.

Income > $6,350 for 2017

a)

gross income

b)

unearned income

c)

earned income

d)

taxable income

34.
Agency responsible for collecting federal taxes
a)
FTC
b)
OSHA
c)
CPSC
d)
IRS
35.
The system which relies upon all taxpayers to know and meet their tax responsibilities
a)
public goods and services
b)
estimating tax payments
c)
voluntary compliance
d)
exemption
36.
Interest and dividend income
a)
gross income
b)
net pay
c)
earned income
d)
unearned income
37.
Free from federal tax withholding
a)
allowance
b)
exempt
c)
withholding
d)
standard deduction
38.

The amount of federal income tax to withhold from your pay is based on

a)

gross pay

b)

marital status

c)

the number of withholding allowances

d)

all of the above are correct

39.

Which of the following types of income is used to determine your tax liability for the year?

a)

gross income

b)

net pay

c)

taxable income

d)

unearned income

40.

An amount fixed by law which taxpayers may deduct from their gross income is called

a)

withholding allowance

b)

gross income

c)

standard deduction

d)

credit

41.
Single, Married Filing Joint, and Head of the Household are all examples of___ on a tax return.
a)
filing status
b)
standard deductions
c)
itemized deductions
d)
dependents
42.

Unearned income is reported on your tax form and taxes must be paid on them.

a)

True

b)

False

43.

Overtime is calculated at 1.5 times an employee's regular rate of pay.

a)

True

b)

False

44.

Employees who are paid biweekly are paid twice a week.

a)

True

b)

False

45.

Employees who are paid semi-monthly receive 26 paychecks per year.

a)

True

b)

False

46.

Tax deductions are calculated as a percentage of net pay.

a)

True

b)

False

47.

Federal law requires employers to pay a minimum wage.

a)

True

b)

False

48.

Social security is the tax that pays for medical insurance for older adults.

a)

True

b)

False

49.

Which form is used to report an employees earnings and taxes paid in a year?

a)

W-2

b)

W-4

c)

I-9

d)

1040

50.

By what date must employers provide, or place in the mail, a wage earner's W-2 statement?

a)

January 1

b)

January 31

c)

April 1

d)

April 15

51.

In most circumstances, which of the following persons can be claimed as a dependent on a Form W-4? Mark all that apply.

a)

yourself

b)

your spouse

c)

your parents

d)

your children

e)

your pets

52.

What are the four most common taxes that come out of a person’s payroll check?

a)

Federal Income Tax

b)

State Income Tax

c)

City/Local Income Tax

d)

Medicare Tax

e)

Social Security

53.

pay based on number of hours worked

a)

salary

b)

wages

c)

earned income

d)

unearned income

54.

fixed rate of pay for week, month, or year

a)

wages

b)

commission

c)

tips

d)

salary

55.

withheld from an employee’s wages or salary

a)

disposable income

b)

payroll taxes

c)

workers compensation

d)

earned income

56.

Income that has not been worked for such as interest, dividends, or gambling winnings

a)

disposable income

b)

unearned income

c)

earned income

d)

workers compensation

57.

Wages, salary and tips

a)

unearned income

b)

earned income

c)

disposable income

58.

Pays medical and disability benefits to employees injured on the job

a)

unearned income

b)

earned income

c)

workers compensation

d)

Medicare

59.

What government department collects personal income tax?

a)

Federal Government

b)

IRS

c)

Social Security Division

d)

Congress

60.

What is the deadline for filing personal income tax?

a)

January 31

b)

April 15

c)

May 31

d)

June 15

61.

Autonomous Consumption is __________________ related to the level of Income.

a)

Totally

b)

Inversely

c)

Positively

d)

Not

62.

In Determination of Equilibrium level of Income by AD-AS approach, AD is represented by:-

a)

C + I

b)

C + S

c)

S + I

d)

C + Y

63.

investment Multiplier and MPS are_________________ Related

a)

Directly

b)

Inversely

c)

Not

d)

Cannot be determined

64.

Average propensity to Consume is equal to :-

a)

Y/C

b)

ΔY/ΔS

c)

C/Y

d)

ΔC/ΔY

65.

What is the Value of MPS if MPC is given as 0.85

a)

0.25

b)

0.35

c)

0.15

d)

0.85

66.

Slope of Consumption Function is called:

a)

Autonomous Consumption

b)

MPC

c)

APC

d)

APS

67.

The GAP by which the Aggregate Demand has exceeded the the AD that is required for Full Employment Equilibrium, It is called as :-

a)

Inflationary GAP

b)

Deflationary GAP

c)

Underemployment GAP

d)

None of these

68.

Your taxable wages depend on ________________ or withholding allowances, which allow for supporting yourself, your spouse, and others in your family who are your dependents.

a)

deductions

b)

expenses

c)

exemptions

d)

claims

69.

Gross pay: $23,760 Married, with 4 dependents, State income tax rate 6%. Calculate the State Income Tax.

Exemptions: Married $4,000, Each dependent $2,000.

a)

$201.33

b)

$705.60

c)

$945.60

d)

$105.60

70.

Gross pay: $43,300, Single with 1 dependent, State income tax rate : 2.5%. Calculate the State Income Tax.

Exemptions: Single $2,000 Each Dependent $2,000.

a)

$982.50

b)

$1050.00

c)

$932.50

d)

$1082.5

71.

Wayne Anthony earns $36,200 annually. He is married and supports 2 children. The state tax rate is 0.0%. How much is withheld yearly for state income tax?

a)

$0.00

b)

$36.20

c)

$8,000.00

d)

$905.00

72.

David Chow earns $42,000 a year. He is paid weekly. He is married, has no dependents, and claims 2 withholding allowances for federal income tax purposes.The state income tax rate is 2% of taxable income. How much does his employer withhold annually from David's gross pay for state and federal income taxes combined?

a)

$3,276.00

b)

$4,036.00

c)

$1,600.00

d)

$760.00

73.

Annual Salary : $24,872; personal exemptions: $1,500.

This person is paid semimonthly.

Use the following graduated income tax rates and find the income tax withheld per pay period.

First $10,000 is 2.75%

Next $15,000 is 3.25%

a)

$275.00

b)

$709.59

c)

$434.59

d)

$29.57

74.
Sales tax is __________ to the price
a)
subtracted
b)
added
c)
multiplied
d)
divided
75.
Vickie makes $40,000 annually.  If she pays 20% in income tax, what is the amount of income tax she will pay?
a)
8000
b)
80000
c)
2000
d)
1200
76.
Noah is a lawyer.  Last year he made $92,000.  If he has to pay 22% in income tax what is the amount of income tax he has to pay?
a)
2024
b)
22000
c)
20240
d)
2000
77.
Myron won $33,000 on a game show in California where the state tax rate is 7.25%. How much did he walk away with? 
a)
$27,783
b)
$30,607.50
c)
$31,893.55
d)
$29,333.65
78.

Mr. Barrett bought a new battery for his car. The battery cost $72. Since batteries are a taxable item, he had to pay a sales tax of 7.5%. What was the total cost of the battery in dollars and cents?

a)

$79.50

b)

$5.40

c)

$77.40

d)

$66.60

79.

Mr. Lucas bought a new lounge chair for his game room. The one he chose was $425. He had to pay a sales tax of 8.2%. What was the amount of sales tax he paid on the chair?

a)

$24.90

b)

$44.30

c)

$34.85

d)

Not Here

80.
What can happen if you don't file/pay taxes?
a)
You can get fined
b)
You can own back taxes
c)
You can go to prison
d)
All of the above
81.
The government agency in charge of collecting tax.
a)
FICA
b)
IRS
c)
NBA
d)
SEC
82.
A required payment to local, state, or national government is 
a)
a tax
b)
revenue
c)
a ripoff
83.
Just like you have a social security number, your employer has a _____ number that they place on your W-4 form.
a)
AIM
b)
EPN
c)
DWM
d)
EIN
84.
Grants are payments that must be paid back.
a)
True
b)
False
85.
A W-4 is given to you by an employer...
a)
True
b)
False
86.
What is money received on a regular basis for work or through investments?
a)
salary
b)
paycheck
c)
wage
d)
income
87.
Taxable income includes such things as wages, tips, salaries, alimony, andchild support.
a)
True
b)
False
88.
Money paid to the government from working for pay
a)
excise tax
b)
income tax
c)
sales tax
d)
payroll tax
89.
The different ways an employer can issue pay checks are:
a)
Weekly
b)
Bi-Weekly
c)
Monthly
d)
All of these are correct
90.
Earned income includes:
a)
Wages, Salaries, Tips, and other taxable employee pay
b)
Union Strike Benefits
c)
Long-term disability benefits received prior to retirement age
d)
All of these are correct
91.
Total amount of earnings made over a month before any deductions are____________.
a)
gross annual income
b)
net monthly income
c)
gross monthly income
d)
net annual income
92.
What is the amount of the monthly income remaining after all deductions have been taken?
a)
gross annual income
b)
gross monthly income
c)
net annual income
d)
net monthly income
93.
Withholdings from paychecks that go to provide income support for people who are unemployed, disabled, or over age 65
a)
401k
b)
Social Security
c)
Medicare
d)
Medicaid
94.
What is the purpose of a W-4?
a)
To track your tax history
b)
To tell you how much you will earn each month.
c)
To inform you on how much your employer will withhold on your taxes
d)
None of the above
95.

What does "gross pay" mean.

a)

The amount of money a bank loans you

b)

The amount of money that creeps you out

c)

The amount of money you take home after taxes are taken out.

d)

The total amount of money a person earns, including overtime, before taxes are taken out.

96.

What kind of income is defined by earning the same, consistent, amount every pay period?

a)

Salary

b)

Hourly

c)

Commission

d)

Part-time

97.

What kind of income is defined by earning your pay based on the number of hours your work?

a)

Salary

b)

Hourly

c)

Commission

d)

Part-Time

98.

Net Pay is...

a)

pay you get after deductions

b)

pay you get before deductions

c)

gross pay

d)

regular pay + overtime pay

99.

What is the RATE used to calculate overtime?

a)

5 times

b)

2 times

c)

1.5 times

d)

2.5 times

100.

What percent is used to calculate the Social Security deduction?

a)

15%

b)

6.2%

c)

1.45%

d)

12%

101.

What percent is used to calculate the Medicare deduction?

a)

15%

b)

6.2%

c)

1.45%

d)

12%

102.

Which of the below is NOT a deduction?

a)

Federal income Tax

b)

State Income Tax

c)

Social Security Tax

d)

Capital Gains Tax

103.

Identify this cricket player who is playing IPL, will he be normal resident of India

a)

Nathan Coulter-Nile Normal Resident of SA

b)

Pat Cummins Normal Resident of Australia

c)

Mitchel Starc Normal Resident of Australia

d)

Kyle Jamison Normal Resident of New Zealand

104.

Indian High Commission to Sri Lanka is part of domestic territory of

a)

Sri Lanka

b)

India

105.

Which is not a factor income:

a)

Dearness allowance added to basic salary of an employee

b)

Five kg wheat and rice given by the govt during COVID to help the poor

c)

Salary received by an employee of SBI

d)

Rent received by the owner of a factory building from an industrialist

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