1. The definition of a "permanent establishment" is a key article of the OECD's model tax treaty. Which of the following would NOT be considered a permanent establishment by the OECD?

A) Branch B) Mine C) Storage facility D) Construction site

2. Which of the following is the most important type of Subpart F income?

A) Income from countries engaged in international boycotts B) Income from foreign base companies C) Income from insurance of U.S. risks D) Income from illegal payments

3. Zen Energies is a Chinese branch of Super Sigma Inc., incorporated in U.S. In the year ending Dec. 31, 2019, the net income of Zen was 25 million Yuan before tax of 25%. During the year the average exchange rate was 0.16379 Yuan per dollar. The exchange rate on the date of payment of taxes is was 0.16474 Yuan per dollar. Determine the amount of U.S. taxable income.

A) $3.0711 million B) $114.475 million C) $18.75 million D) $4.1007 million

4. What is an advance pricing agreement?

A) A transfer price that is negotiated between two divisions of a decentralized organization B) A transfer pricing method accepted by the IRS before an intercompany transaction is completed C) A contract between a parent company and a foreign subsidiary to complete a transaction at a specified future price D) A foreign currency firm commitment with payment before delivery of the product

5. Which of the following inventory valuation methods, commonly used under the U.S. GAAP, is NOT allowed under IAS 2 (Inventories)?

A) LIFO B) FIFO C) Weighted average D) Retail inventory method