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2. The administrative convenience concept explains why some items are not treated consistently when the cost of
implementing a concept exceeds the benefit of using it.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: CIFT.MUHI.14.2 - 2
NATIONAL STANDARDS: United States - AACSB Analytic
United States - AICPA Measurement
DATE CREATED: 10/26/2015 11:04 AM
DATE MODIFIED: 10/26/2015 11:04 AM
3. John sells his uncle Bob land held for investment for $10,000 that he had purchased 3 years ago for $12,000. John is
precluded from taking the $2,000 loss under the arm’s-length transaction concept since this is a related party transaction.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: CIFT.MUHI.14.2 - 2
NATIONAL STANDARDS: United States - AACSB Analytic
United States - AICPA Measurement
DATE CREATED: 10/26/2015 11:04 AM
DATE MODIFIED: 10/26/2015 11:04 AM
5. An individual can legally assign income to another individual, and the assignment relieves the owner of the income
from paying tax on the income.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: CIFT.MUHI.14.3 - 3
NATIONAL STANDARDS: United States - AACSB Analytic
United States - AICPA Measurement
DATE CREATED: 10/26/2015 11:04 AM
DATE MODIFIED: 10/26/2015 11:04 AM
6. Benji hired his three-year-old son to work in his engineering consulting firm. As long as Benji fills out all the forms and
properly deposits the paychecks in his son’s bank account, he will be able to deduct the expenditure as a business expense.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Medium
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: CIFT.MUHI.14.3 - 3
NATIONAL STANDARDS: United States - AACSB Analytic
United States - AICPA Measurement
DATE CREATED: 10/26/2015 11:04 AM
DATE MODIFIED: 10/26/2015 11:04 AM
8. Under the all-inclusive income concept, the tax law always starts with the proposition that all receipts of cash are
taxable.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: CIFT.MUHI.14.4 - 4
NATIONAL STANDARDS: United States - AACSB Analytic
United States - AICPA Measurement
DATE CREATED: 10/26/2015 11:04 AM
DATE MODIFIED: 10/26/2015 11:04 AM
9. Frank rents an apartment to Pete and collects a cleaning deposit to be repaid at the end of the lease. Under the claim-of-
right doctrine, Frank includes the deposit in income when collected.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Medium
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: CIFT.MUHI.14.4 - 4
NATIONAL STANDARDS: United States - AACSB Analytic
United States - AICPA Measurement
DATE CREATED: 10/26/2015 11:04 AM
DATE MODIFIED: 10/26/2015 11:04 AM
III.
IV.