Which of the Following Is an Example of Tax Evasion

question 140

Multiple Choice

Which of the following is an example of tax evasion?

• A)Beth invests money in tax exempt municipal bonds instead of corporate bonds.
• B)Bryan uses the cafeteria plan offered by his employer to fund pension plan contributions for his retirement.
• C)Bauregard, a very wealthy 87-year-old individual, gives bonds to each of his grandchildren so that the interest income on them would be taxed at a lower tax rate.
• D)Bertha won $500 cash in an amateur mud-wrestling contest but doesn't report it on her tax return.
• E)All of the above are examples of tax evasion.

---

Definitions:

Balance Sheet

An overview presenting a company's financial position, including assets, liabilities, and the equity of shareholders at a specified time.

Ratio

A quantitative relationship between two numbers indicating how many times one value contains or is contained within the other.

Average Values

Statistical measures that represent the central tendency or typical value of a dataset, such as the mean, median, and mode.

Operating Activities

Business activities directly related to the production, selling, and delivery of a company's products or services.