28 Questions
Which of the following is not associated with absorption costing?
functional format
What factor, related to manufacturing costs, causes the difference in net earnings computed using absorption costing and net earnings computed using variable costing?
Absorption costing allocates fixed overhead costs between cost of goods sold and inventories, and variable costing considers all fixed costs to be period costs.
Under variable costing,
product costs are both fixed and variable.
On the variable costing income statement, the difference between the 'contribution margin' and 'income before income taxes' is equal to
the total variable costs.
What costs are treated as product costs under variable (direct) costing?
Only direct costs
Which of the following is an argument against the use of direct (variable) costing?
Fixed manufacturing overhead is difficult to allocate properly
Which of the following statements is true for a firm that uses variable costing?
Profits fluctuate with sales
CVP analysis relies on the assumptions that costs are either strictly fixed or strictly variable. Consistent with these assumptions, as volume decreases total
Fixed costs decrease
In CVP analysis, linear functions are assumed for
All of the above
After the level of volume exceeds the break-even point
The total contribution margin will turn from negative to positive
__ focuses only on factors that change from one course of action to another.
Incremental analysis
The margin of safety would be negative if a company('s)
Was presently operating at a volume that is below the break-even point
Which of the following is NOT an inherent power of the government?
Anti-terrorism
Which statement about inherent powers is true?
Only Statement 2 is true.
What is the primary character of the inherent powers of the government?
Legislative
Under which inherent power did the Philippine government pass RA No. 14023 to penalize violations of community quarantine rules?
Police Power
Which inherent power of the government has the most tangible equivalent compensation?
Eminent Domain
What is a common characteristic of eminent domain and police power?
They both involve government control over private property.
Which of the following is an example of the State’s exercise of police power?
Collection of taxes on sweetened beverages as enacted by the Congress
According to the benefits received theory, what statement is true?
Is conclusive upon taxpayers and cannot be disproved
What is eminent domain?
The power to take private property for public purpose after payment of just compensation
According to the Marshall doctrine, what does it justify?
The power of the government to collect taxes even without the grant of the Constitution
Which theory justifies taxes being a preferred credit?
Lifeblood Doctrine
What does tax evasion entail?
Also known as tax dodging, and is the illegal way of not paying taxes
'Eminent domain' refers to which power?
The power to take private property for public purpose after payment of just compensation
Which theory is associated with taxes being considered as a preferred charge?
Lifeblood Doctrine
What does tax evasion entail?
Also known as tax dodging, and is the illegal way of not paying taxes
According to 'Eminent domain', what does it involve?
Involves taking private property for public purpose after payment of just compensation
Test your knowledge of basic tax concepts and principles with this self-test DIY drill. Multiple choice questions cover topics such as inherent powers of the government and the Constitution.
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