QUESTION 1

How is a hobby different from a business?

1. Income from a hobby is assessable whereas income from a business is not assessable.
2. Expenses for generating income from a hobby are deductible whereas they are not deductible for income from a business.
3. A hobby is generally carried out on small size and scale whereas a business is carried out on a large size and scale.
4. A hobby is carried out with an intention to make profit whereas a business is carried out for recreation.
5. All of the above

QUESTION 2

Which of the followings is specifically assessable under ITAA 1997?

1. Receipts from cancellation of contracts.
2. Profits from isolated transactions.
3. Bounties and subsidies.
4. Income from Illegal activities
5. All of the above.

QUESTION 3

Which of the following sections of the Act specifies that assessableincome includes ordinary income?

1. Section 5-6.
2. Section 6-5.
3. Section 6-10.
4. Section 8-1.
5. None of the above.

QUESTION 4

Which of the following receipts represents assessable income?

1. Lump sum proceeds from a life assurance policy.
2. Wages recovered through workers compensation.
3. Medical bills reimbursed by employer.
4. Lump sum compensation for personal injury.
5. None of the above.

QUESTION 5

Taxable income does not include:

1. Royalties received.
2. Rent received.
3. Medicare levy surcharge.
4. Periodic workers compensation for loss of wages.
5. Franked dividends.

QUESTION 6

Direct compensation for services is assessable under s.6-5(1). Thiswould generally include:

1. A non-cash fringe benefit
2. Personal injury awards
3. Mere gifts
4. Lump sum proceeds of a life assurance policy
5. None of the above.

QUESTION 7

Which of the following is an exempt entity?

1. A clothing manufacturer
2. The Clothing Textiles & Footwear Employees Union
3. A McDonalds franchise
4. A large Australian corporation with 80% of activities performed overseas
5. None of the above

QUESTION 8

Which of the following would NOT be assessable income for a drinkswaiter?

1. A clothing allowance from his employer.
2. Tips from customers.
3. A cash bonus from his employer.
4. Overtime wages from his employer.
5. None of the above.

QUESTION 9

Which of the following sections of the Act specifies that assessableincome includes statutory income?

1. Section 5-6
2. Section 6-5.
3. Section 6-10.
4. Section 8-1.
5. None of the above.

QUESTION 10

The gross earnings or proceeds from the conduct of a business areassessable under s.6-5(1). This would usually not include:

1. Income from a hobby.
2. Wages.
3. Gambling wins.
4. Prizes or awards not related to the business activities.
5. All of the above.