TRUE OR FALSE

1. A user fee entitles the payer to a specific good or service from the government.

2. A tax is intended to deter or punish unacceptable behavior.

3. Net cash flow from a transaction equals the difference between cash received and cash disbursed in the transaction.

4. A dollar available today is always worth more than a dollar not available until a future period.

5. The after-tax cost of a dollar of deductible expense to a high-tax entity is less than the after-tax cost to a low-tax entity.

6. The time period variable is based on the time value of money.

7. Taxable income is defined as gross income minus allowable deductions and credits.

8. The MACRS calculation ignores any salvage or residual value of an asset.

9. Gain realized on a property exchange that is not recognized is actually deferred rather than nontaxable.

10. A corporate shareholder usually cannot be held personally liable for the debts arising from the corporate business.

11. Gabriel operates his business as a sole proprietorship. This year the business incurred an operating loss. The loss can be used to offset other income he earned during the year.

12. At least three corporations are required to form an affiliated group.