Question 1-Which of the following is true regarding the taxation of a partnership?

a The partnership pays the tax on the partnership's taxable income.

b The partners' personal assets have legal protection from the partnership's creditors.

c The partnership is subject to "double taxation", which means it is taxed at both the partnership and partner levels.

d The partners' pay tax on any cash they receive from the partnership during the year.

e The partnership files an information-only return, and the partners pay the tax on the partnership's taxable income

Question 2-In which type of business is "taxable income" the relevant amount for determining how much tax is owed?

a Regular corporations, S corporations, LLCs

b Proprietorships, partnerships, S corporations

c All type of businesses

d Proprietorships, partnerships, LLCs

e Only regular and S corporations

Question 3-Prall Inc. had net income for the year of $7,000. During the year, Prall had 1,300 in federal income tax expense, $500 in business meals with clients, and received $600 interest on municipal bonds. How much is Prall's taxable income for the year?

a

$7,950

b

$6,050

c

$7,250

d

$9,150

Question 4-Topaz had no exclusions or tax credits, and its tax rate is 21%. What is Topazs net income?

a

$18,280

b

$17,380

c

$19,120

d

$18,700