ACCT 307- Ch 1. Online QUIZ – Flashcards

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Compliance requires following guidelines issued by both state and Federal regulatory authorities. -FUTA is imposed only on the employer ("It is imposed on both employer and employee" and "It is imposed solely on the employee"). "It is applicable to spouses of employees but not to any children under age 18" refers to FICA. Because the administration of FUTA is shared by Federal and state governments, employers must comply with the rules issued by each ("Compliance requires following guidelines issued by both state and Federal regulatory authorities").

Tax on rent cars. -The Federal government imposes an excise tax on tobacco ("Tobacco excise tax"), customs duties ("Customs duties (tariffs on imports)"), and a gas guzzler tax ("Gas guzzler tax"). It does not impose a tax on rent cars ("Tax on rent cars").

None of these choices are correct. -FICA is imposed on both the employer and the employee ("It is imposed only on the employer"). Spouses who work for each other are not exempt from the tax ("It does not apply when one spouse works for the other spouse"). Its objective is retirement income, not loss of employment ("It provides a modest source of income in the event of loss of employment"). It is administered only by the Federal government ("It is administered by both state and Federal governments").

Taxpayer is an employed electrician. -Employees are subject to income tax withholding and have little opportunity to avoid reporting income ("Taxpayer is an employed electrician"). Casino gambling income is subject to Form 1099 reporting ("Taxpayer just won a $1 million slot machine jackpot at a Las Vegas casino").