1. Jacob Corporation decides to use the LIFO method of inventory valuation. Which of the following is true? (Points : 5)
Jacob can change to FIFO whenever it wishes.
Jacob must use LIFO in its financial statements.
Jacob will have higher taxable income if prices are rising.
Jacob can include FIFO information on the face of the income statements.
2. Which of the following is a taxable fringe benefit when paid by the employer? (Points : 5)
On-premises exercise facilities
Group whole life insurance policy premium
Employer subsidized meals
3. Which one of the following employee benefits can a staff accountant exclude from income? (Points : 5)
A single ticket to a Marlins game
Frequent commuting use of the employer’s automobile
Membership in Bodyworks Athletic Club
All of the above
4. Tachibana Corporation has income per books before tax of $286,000. In computing income per books, Tachibana deducted $20,000 for meals and entertainment expenses, $3,000 for premiums on officers’ life insurance policies (the corporation is the beneficiary for these policies), and $100 for fines. What is Tachibana Corporation’s taxable income?
(Points : 5)
5. The contribution limit for a defined contribution plan is: (Points : 5)
6. If FIFO is used for inventory valuation instead of LIFO when prices are falling: (Points : 5)
Cost of goods sold will be less under FIFO than LIFO.
Cost of goods sold will be more under FIFO than LIFO.
Inventory value will be less under FIFO than LIFO.
There is no difference in inventory or cost of goods sold.
7. Which of the following is not taxable to an employee when paid for by the employer? (Points : 5)
A $200 gift certificate given to each employee at Christmas
Personal use of a company automobile
Housing provided by the employer in lieu of a $400 housing allowance
$150 for a business related seminar