Failure to Make Required Estimated Payments Will Subject the Taxpayer

question 73

Multiple Choice

Failure to make required estimated payments will subject the taxpayer to a potential underpayment penalty plus interest.However,if the difference between the tax shown on the return and the amount of tax withheld for wages is less than ________,the taxpayer will not be assessed a penalty.

• A)$1,250
• B)$500
• C)$850
• D)$1,000

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Definitions:

Discretionary Accounting

Involves the use of judgment by management to choose among acceptable accounting techniques or adjusting estimates that impact financial statements.

Accrue Revenue

The process of recognizing revenue before cash is received, based on the earning process being complete and the revenue being earned.

Loan Agreement

A contract between a borrower and a lender outlining the terms and conditions of a loan.

Events of Default

Specific conditions or circumstances outlined in a loan agreement or bond indenture that, when occurring, grant the lender the right to demand early repayment or take other corrective actions.