Question
QUESTION 2 Which of the following can contribute toward a phantom balance in an operating budget? a. Transfer operating expenses to the capital budget. b.
QUESTION 2
Which of the following can contribute toward a phantom balance in an operating budget?
a. | Transfer operating expenses to the capital budget. | |
b. | Accelerate payment of income tax refunds. | |
c. | Issue payroll checks on June 15 rather than June 20 (July 1 fiscal year start). | |
d. | Change the estimate of the property tax delinquency rate from 5 percent to 10 percent, to better reflect actual collection patterns. |
QUESTION 3
A requirement that the Governors operating budget be balanced usually means that:
a. | All expenditure proposed in that document must be covered either by revenue raised currently, available from prior year surpluses, or by borrowing on the promise to repay from future revenues. | |
b. | All expenditure proposed in that document must be covered either by revenue raised within the budget year or available from prior year surpluses. | |
c. | The state can have no debt. | |
d. | State expenditure cannot exceed state revenue for the year. |
0.5 points
QUESTION 4
An advantage of the traditional line item budget is
a. | Accountability and responsibility are easily assigned. | |
b. | Costs of defined activities are identified. | |
c. | The long timeframe allows for decision-making and planning. | |
d. | Appropriations are flexible to allow for achievement of desired outcomes. |
0.5 points
QUESTION 5
Performance budgets:
a. | link performance objectives to requests for funds. | |
b. | do not focus on measurable activities. | |
c. | classify the budget by goals or objectives (e.g., Protection of Persons and Property, Safe and Speedy Transportation). | |
d. | None of the above. |
0.5 points
QUESTION 6
The budget process which emphasizes the achievement of goals and competition between alternatives is:
a. | incremental budgeting. | |
b. | performance budgeting. | |
c. | program budgeting. | |
d. | target based budgeting. |
0.5 points
QUESTION 7
A feature that distinguishes a traditional performance budget from other budget classification structures is:
a. | unit cost estimates for tasks or activities. | |
b. | quantitative performance objectives for agencies and departments. | |
c. | cost estimates for each agency. | |
d. | measurement of worth of agency functions to society. |
0.5 points
QUESTION 8
A lower discount rate applied to a given flow of returns in the future (e.g., $5,000 at the end of 5 years, $10,000 at the end of 10 years, $15,000 at the end of 15 years, etc.) will cause the present value of that flow to:
a. | remain unchanged if the future dollars do not change. | |
b. | increase. | |
c. | decrease. | |
d. | change in a direction that cannot be determined in general. |
0.5 points
QUESTION 9
Which of the following is not a characteristic of a capital expenditure, for the purposes of government budgeting?
a. | recurring expenditure | |
b. | large price tag | |
c. | long life | |
d. | none of the above |
0.5 points
QUESTION 10
For the income tax, in a regressive tax rate structure:
a. | the average tax rate is lower than the marginal tax rate. | |
b. | the average tax rate increases with the size of the tax base. | |
c. | the effective tax rate decreases as the size of the tax base increases. | |
d. | the effective tax rate does not vary with the size of the tax base. |
0.5 points
QUESTION 11
The concept of vertical equity states that:
a. | equals should be treated equally in a tax system. | |
b. | unequals should be treated equally in a tax system. | |
c. | equals should be treated unequally in a tax system. | |
d. | unequals should be treated unequally in a tax system. |
0.5 points
QUESTION 12
The marginal tax rate equals:
a. | tax paid divided by the appropriate measure of affluence. | |
b. | the tax liability resulting from true application of the tax statutes divided by the statutory base. | |
c. | the tax rate required, at the margin, to balance the budget. | |
d. | the amount by which a taxpayers tax would increase from an additional dollar of the tax base. |
0.5 points
QUESTION 13
Tax credits, exemption, and exclusions all can be used by governments to reduce taxes. Consider a credit of $5,000, an exemption of $5,000, and an exclusion of $5,000all to be added to the existing federal individual income tax. Which of the following statements is correct?
a. | The revenue lost by the U.S. Treasury would be greatest for the exclusion, because such a provision removes transactions which would appear to be income from the tax base. | |
b. | The personal exemption would save the individual taxpayer the most money because it would have the greatest relative increase over existing exemption levels (currently somewhat over $2,000). | |
c. | The credit will cause greater revenue loss, because it takes effect after rates are applied and directly reduces tax liability. | |
d. | All tax reducing impacts would be the same. |
0.5 points
QUESTION 14
Under the current federal individual income tax law, which of the following would be an exclusion?
a. | Wages paid by a non-profit organization, like the Red Cross. | |
b. | Interest paid on a bond issued by a state government. | |
c. | The value of an old car you received in exchange for painting a house. | |
d. | All the above are exclusions. |
0.5 points
QUESTION 15
Exemption of food purchases from a sales tax reduces regressivity because:
a. | the percent of income spent on food generally declines as family income increases. | |
b. | total food purchases decline as income increases. | |
c. | low income families spend more money on food than do high income families. | |
d. | food exemption does not reduce regressivity. |
0.5 points
QUESTION 16
A common criticism of retail sales and excise taxes is:
a. | they are progressive with respect to income. | |
b. | they are general taxes with no allowed exemptions. | |
c. | they are regressive with respect to income. | |
d. | they tend to be shifted backward. |
0.5 points
QUESTION 17
Which of the following is a unit excise tax?
a. | The 5 percent Indiana state sales tax. | |
b. | A 10 percent sales tax on beer. | |
c. | A 10 cents per gallon beer tax. | |
d. | The Indiana motor vehicle excise tax levied each year at a rate varying by the value of your car when it was new. |
0.5 points
QUESTION 18
Fractional assessment refers to:
a. | the practice states use to divide formula funding among cities. | |
b. | the balance of corporate profits across state jurisdictions. | |
c. | assessing properties at less than market value for tax purposes. | |
d. | None of the above. |
0.5 points
QUESTION 19
Which of the following would ordinarily not be taxed in a local real property tax?
a. | land subdivided for residential construction | |
b. | an apartment building | |
c. | a shopping center | |
d. | a private collection of valuable paintings by Picasso and Monet |
0.5 points
QUESTION 20
Which of the following does not constitute a property tax relief measure?
a. | circuit breakers | |
b. | deferrals | |
c. | exemptions | |
d. | all of the above constitute property tax relief measures |
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