Tax 101 Basic Concepts and Principles DIY Drill Self-Test 1

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Which of the following is not associated with absorption costing?

gross margin

functional format (correct)

contribution margin

period costs

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 'inventories' all fixed costs for the period in ending finished goods inventory, but variable costing expenses all fixed costs.

Absorption costing allocates fixed overhead costs between cost of goods sold and inventories, and variable costing considers all fixed costs to be period costs. (correct)

Absorption costing 'inventories' all direct costs, but variable costing considers direct costs to be period costs.

Absorption costing considers all costs in the determination of net earnings, whereas variable costing considers fixed costs to be period costs.

Under variable costing,

product costs are both fixed and variable. (correct)

all product costs are variable.

all period costs are variable.

all product costs are fixed.

On the variable costing income statement, the difference between the 'contribution margin' and 'income before income taxes' is equal to

the total variable costs. Signup and view all the answers

What costs are treated as product costs under variable (direct) costing?

Only direct costs Signup and view all the answers

Which of the following is an argument against the use of direct (variable) costing?

Fixed manufacturing overhead is difficult to allocate properly Signup and view all the answers

Which of the following statements is true for a firm that uses variable costing?

Profits fluctuate with sales Signup and view all the answers

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 Signup and view all the answers

In CVP analysis, linear functions are assumed for

All of the above Signup and view all the answers

After the level of volume exceeds the break-even point

The total contribution margin will turn from negative to positive Signup and view all the answers

__ focuses only on factors that change from one course of action to another.

Incremental analysis Signup and view all the answers

The margin of safety would be negative if a company('s)

Was presently operating at a volume that is below the break-even point Signup and view all the answers

Which of the following is NOT an inherent power of the government?

Anti-terrorism Signup and view all the answers

Which statement about inherent powers is true?

Only Statement 2 is true. Signup and view all the answers

What is the primary character of the inherent powers of the government?

Legislative Signup and view all the answers

Under which inherent power did the Philippine government pass RA No. 14023 to penalize violations of community quarantine rules?

Police Power Signup and view all the answers

Which inherent power of the government has the most tangible equivalent compensation?

Eminent Domain Signup and view all the answers

What is a common characteristic of eminent domain and police power?

They both involve government control over private property. Signup and view all the answers

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 Signup and view all the answers

According to the benefits received theory, what statement is true?

Is conclusive upon taxpayers and cannot be disproved Signup and view all the answers

What is eminent domain?

The power to take private property for public purpose after payment of just compensation Signup and view all the answers

According to the Marshall doctrine, what does it justify?

The power of the government to collect taxes even without the grant of the Constitution Signup and view all the answers

Which theory justifies taxes being a preferred credit?

Lifeblood Doctrine Signup and view all the answers

What does tax evasion entail?

Also known as tax dodging, and is the illegal way of not paying taxes Signup and view all the answers

'Eminent domain' refers to which power?

The power to take private property for public purpose after payment of just compensation Signup and view all the answers

Which theory is associated with taxes being considered as a preferred charge?

Lifeblood Doctrine Signup and view all the answers

What does tax evasion entail?

Also known as tax dodging, and is the illegal way of not paying taxes Signup and view all the answers

According to 'Eminent domain', what does it involve?

Involves taking private property for public purpose after payment of just compensation Signup and view all the answers

Tax 101 Basic Concepts and Principles DIY Drill Self-Test 1

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Questions and Answers

Which of the following is not associated with absorption costing?

What factor, related to manufacturing costs, causes the difference in net earnings computed using absorption costing and net earnings computed using variable costing?

Under variable costing,

On the variable costing income statement, the difference between the 'contribution margin' and 'income before income taxes' is equal to

What costs are treated as product costs under variable (direct) costing?

Which of the following is an argument against the use of direct (variable) costing?

Which of the following statements is true for a firm that uses variable costing?

CVP analysis relies on the assumptions that costs are either strictly fixed or strictly variable. Consistent with these assumptions, as volume decreases total

In CVP analysis, linear functions are assumed for

After the level of volume exceeds the break-even point

__ focuses only on factors that change from one course of action to another.

The margin of safety would be negative if a company('s)

Which of the following is NOT an inherent power of the government?

Which statement about inherent powers is true?

What is the primary character of the inherent powers of the government?

Under which inherent power did the Philippine government pass RA No. 14023 to penalize violations of community quarantine rules?

Which inherent power of the government has the most tangible equivalent compensation?

What is a common characteristic of eminent domain and police power?

Which of the following is an example of the State’s exercise of police power?

According to the benefits received theory, what statement is true?

What is eminent domain?

According to the Marshall doctrine, what does it justify?

Which theory justifies taxes being a preferred credit?

What does tax evasion entail?

'Eminent domain' refers to which power?

Which theory is associated with taxes being considered as a preferred charge?

What does tax evasion entail?

According to 'Eminent domain', what does it involve?

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