BASICS OF ACCOUNTING - SECTION 04 REVIEW QUIZ

What is an example of a CAPITAL GAIN?

A salary of $30,000

Selling a stock share for a profit

Interest earned on a savings account

Your answer is incorrect. A salary of $30,000 is an example of ordinary income.

Correct! A profit made from selling a stock share is an example of a capital gain.

Your answer is incorrect. Interest earned on a savings account is an example of ordinary income.

The job of INCOME TAX ACCOUNTING is:

To structure things so that the correct amount of tax is paid, no more, no less

To fill out and submit tax forms and send payments to the government

All of the above

Your answer is Incorrect because it is incomplete. Structuring things so that the correct amount of tax is paid is part of income tax accounting but there are more functions.

Your answer is Incorrect because it is incomplete. Filling out and submitting tax forms and sending payments to the government are both part of income tax accounting but there are more functions.

Correct! Structuring things so that the correct amount of tax is paid, filling out and submitting tax forms, and sending payments to the government are all under the heading of INCOME TAX ACCOUNTING.

What are the two types of income?

Ordinary Income and Capital Gains

Capital Gains and Credits

Correct! The two types of income are Ordinary Income and Capital Gains.

Incorrect. A capital gain is a type of income but a credit is not.

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