1. True/False. The Federal personal income tax is a flat tax. 1. True/False A ba
ID: 2623376 • Letter: 1
Question
1. True/False. The Federal personal income tax is a flat tax.
1. True/False A balance sheet shows your financial condition as of the time the statement is prepared.
2. True/False An income statement deficit would increase net worth.
3. The three parts of your balance sheet are
a. income, liabilities, balance.
b. assets, expenditures, balance.
c. assets, liabilities, balance.
d. assets, liabilities, net worth.
e. income, liabilities, net worth.
4. The federal income tax is
a. integrative.
b. regressive.
c. progressive.
d. flat rate.
e. none of the above.
5. The best approach to solving the problem of an annual budget deficit is generally to
a. liquidate enough savings to make up the deficit.
b. sell stock to make up the deficit.
c. reduce flexible expenditures.
d. reduce fixed expenses.
e. get a part time job.
6. Inflation this coming year is expected to be 4 percent. If Mr. Gonza earned $37,000 this year, how much must he earn the following year just to keep up with inflation and maintain the balance between his income and his increasing expenditures?
7. Russ buys his wife a valuable painting for $20,000. He purchases it using $15,000 from his savings and a $5,000 loan. How does this transaction affect Russ' balance sheet?
a. His assets increase
b. His liabilities increase
c. His net worth stays the same
d. a and b
e. a, b and c
8. Tax credits reduce your
a. tax liability.
b. adjusted gross income.
c. tax refund.
d. tax withholding.
e. taxable income.
9. Jamie has taxable income of $45,000. She is single and her tax rates are 10% on the first $7,000 of taxable income, 15% of the amount over $7,000 up to $28,400 of taxable income and 25% on the remainder. What is Jamie's tax liability, her marginal tax rate, and her average tax rate?
10. Interest you paid on your [car | house] loan could be deducted. ps: car or house.
Explanation / Answer
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ANSWER 9
Tax Liability = 7000*10% + (28400-7000)*15% + (45000-28400)*25%
= $8060
Marginal tax Rate = Tax Rate on additional income earned. In our case it is 25%.
Average Tax Rate = Tax Liability / Income
= 8060 / 45000 = 17.91%
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