Unit-IV; Professional Sales Representative (PSR).pptx
Acc 307 wk 11 final exam
1. ACC 307 WK 11 Final Exam
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1. One indicia of independent contractor (rather than employee) status is when the individual
performing the services is paid based on time spent (rather than on tasks performed).
True False
2. In some cases it may be appropriate for a taxpayer to report work-related expenses by
using both Form 2106 and Schedule C.
True False
3. The IRS will not issue advanced rulings as to whether a worker’s status is that of an employee or an
independent contractor.
True False
4. Jake performs services for Maude. If Jake provides his own helper and tools, this is indicative of
independent contractor (rather than employee) status.
True False
5. A statutory employee is not a common law employee but is subject to income tax withholdings.
True False
6. For tax purposes, a statutory employee is treated the same as a common law employee.
True False
7. If an individual is subject to the direction or control of another only to the extent of the end result but
not as to the means of accomplishment, an employer-employee relationship does not exist.
True False
2. 8. The work-related expenses of an independent contractor will not be subject to the 2%-of-AGI floor.
True False
9. After she finishes working at her main job, Ann returns home, has dinner, then drives to her second
job. Ann may deduct the mileage between her home and second job.
True False
10. A taxpayer who maintains an office in the home to conduct his only business will not have
nondeductible commuting expense.
True False
11. After the automatic mileage rate has been set by the IRS for a year, it can later be changed by the
IRS.
True False
12. In choosing between the actual expense method and the automatic mileage method, a taxpayer
should consider the cost of insurance on the automobile.
True False
13. A taxpayer who uses the automatic mileage method to compute auto expenses can also deduct the
business portion of tolls and parking.
True False
14. A deduction for parking and other traffic violations is allowed under the actual cost method but not
the automatic mileage method.
True False
15. A taxpayer who uses the automatic mileage method for the business use of an automobile can
change to the actual cost method in a later year.
True False
3. 16. Once the actual cost method is used, a taxpayercannot change to the automatic mileage method in a
later year.
True False
17. For tax purposes, “travel” is a broader classification than “transportation.”
True False
18. Amy lives and works in St. Louis. In the morning she flies to Boston, has a three-hour business
meeting, and returns to St. Louis that evening. For tax purposes, Amywas away from home.
True False
19. Janet, who lives and works in Newark, travels to Atlanta for a Thursday-Friday business
conference. She stays over after the conference and visits relatives and friends on Saturday. Under
certain circumstances, the meals and lodging expenses for Saturday can be considered as business
related.
True False
20. Marvin lives with his family in Alabama. He has two jobs: one in Alabama and one in North
Carolina. Marvin’s tax home is where he lives (Alabama).
True False
21. A taxpayer who lives and works in Kansas City is sent to Chicago on an eight-day business trip. While
in Chicago, taxpayer uses the hotel valet service to have some laundry done. The valet charge is a
deductible travel expense.
True False
22. The tax law specifically provides that a taxpayercannot be temporarily away from home for any
period of employment that exceeds one year.
True False
23. A taxpayer who lives and works in Tulsa travels to Buffalo for five days. If three days are spent on
business and two days are spent on visiting relatives, only 60% of the airfare is deductible.
True False
4. 24. Bob lives and works in Newark, NJ. He travels to London for a three-day business meeting, after
which he spends three days touring Scotland. All of his air fare is deductible.
True False
25. Edna lives and works in Cleveland. She travels to Berlin for an eight-day business meeting, after
which she spends four days touring Germany. All of Edna’s airfare is deductible.
True False
26. Daniel just graduated from college. The cost of moving his personal belongings from his parents’
home to his first job site does qualify for the moving expense deduction.
True False
27. Tired of her 60 mile daily commute, Margaret purchases a condo that is only five miles from her job.
Margaret’s moving expenses to her new condo are allowed and can be claimed by her as a deduction.
True False
28. In November 2012, Katie incurs unreimbursed moving expenses to accept a new job. Katie cannot
deduct any of these expenses when she timely files her 2012 income tax return since she has not yet
satisfied the 39-week time test.
True False
29. In May 2012, after 11 months on a new job, Ken is fired after he assaults a customer. Ken must
include in his gross income for 2012 any deduction for moving expenses he may have claimed on his
2011 tax return.
True False
30. A moving expense deduction is allowed even if at the time of the move the taxpayer did not have a
job at the new location.
True False
5. 31. Kelly, an unemployed architect, moves from Boston to Phoenix to accept a job as a chef at a
restaurant. Kelly’s moving expenses are not deductible because her new job is in a different trade or
business.
True False
32. Alexis (a CPA and JD) sold her public accounting practice in Des Moines and accepted a job with the
Seattle office of a national accounting firm. Her moving expenses are not deductible because she has
changed employment status (i.e., went from self-employed to employee).
True False
33. Qualified moving expenses include the cost of lodging but not meals during the move.
True False
34. Qualified moving expenses of an employee that are not reimbursed are a deduction for AGI.
True False
35. At age 65, Camilla retires from her job in Boston and moves to Florida. As a retiree, she is not subject
to the time test in deducting her moving expenses.
True False
36. An education expense deduction is not allowed if the education results in a promotion or pay raise
for the employee.
True False
37. Lloyd, a practicing CPA, pays tuition to attend law school. Since a law degree involves education
leading to a new trade or business, the tuition is not deductible.
True False
38. Under the right circumstances, a taxpayer’s meals and lodging expense can qualify as a deductible
education expense.
True False
6. 39. There is no cutback adjustment for meals and entertainment as to employees who are subject to
regulation by the U.S. Department of Transportation.
True False
40. Dove Corporation pays for a trip to Jamaica for its two top salespersons. This expense is not subject
to the cutback adjustment.
True False
41. Mallard Corporation furnishes meals at cost to its employees by means of a cafeteria it maintains.
The cost of operating the cafeteria is subject to the cutback adjustment.
True False
42. Every year, Penguin Corporation gives each employee a fruit basket and a bottle of wine at
Christmas. These gifts are not subject to the cutback adjustment.
True False
43. A taxpayer takes six clients to an NBA playoff game. If all of the tickets (list price of $120 each) are
purchased on the Internet for $1,800 ($300 each), only $150 ($300 ´ 50% cutback adjustment) per ticket
is deductible.
True False
44. Ethan, a bachelor with no immediate family, uses the Pine Shadows Country Club exclusively for his
business entertaining. None of Ethan’s annual dues for his club membership are deductible.
True False
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