Cat T9

Certified Accounting Technician examination

Sample multiple choice questions – June 2009

Paper T9 (IRL) Preparing Taxation Computations Section A only All questions are compulsory Note: Section B of the actual exam paper will contain four written questions

The following questions are typical of those that will appear in Section A of the examination paper from June 2009 onwards. There will be a total of ten questions in section A. All questions in Section A will be worth two marks each.

1 Benefits provided by employers are usually taxable on employees.

Which one of the following benefits is generally NOT taxable?



A Living accommodation



B Club membership



C Monthly bus/train passes



D Company cars

(2 marks)

2 Which Schedule is a dividend paid by an Irish resident company to an Irish individual taxed under?

A Schedule D Case lll



B Schedule E



C Schedule F

D Schedule D Case lV

(2 marks)

3 Peter received deposit interest of €80 (net of DIRT) for the year ended 31 December 2007 and €160 (net of DIRT) for the year ended 31 December 2008.

What is Peter’s taxable deposit interest for the year ended 31 December 2008?



A €240



B €200



C €160



D €100

(2 marks)

4 Tax relief is available for certain medical expenses incurred by individuals.

Which one of the following medical expenses is allowable for income tax purposes?



A Eyesight tests



B Routine dental check-ups



C Contact lenses



D X-rays

(2 marks)

5 Preliminary Tax must be paid by individuals on or before 31 October in the year of assessment to avoid interest.

What is the rate of interest payable if the income tax is paid after the due date?



A 0.273% per day



B 0.5% per day



D 0.325% per day

C 0.375% per day (2 marks)

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6 Joe and Mary have been married for 10 years. In August 2007, Joe purchased 500 shares in BIA Ltd at a cost of €5,000. In January 2008, he gifted 250 of his Bia Ltd shares to his wife Mary. The value of the 250 shares in January 2008 was €3,500. Mary sold all of her shares in Bia Ltd for €6,000 in December 2008.

What was Mary’s capital gain on the disposal of her shares in Bia Ltd?



A €1,000



B €2,500



C €3,500



D €1,500

(2 marks)

7 A Ltd is a trading company. During the year ended 31 December 2008, the company made a capital loss of €10,000 on the disposal of its factory premises.

Which one of the following can this loss be set against?



A The company’s trading profits for the year ended 31 December 2008



B Deposit interest received by the company in the year ended 31 December 2008.



C The company’s capital gains in the year ended 31 December 2008



D Rental income received by the company in the year ended 31 December 2008

(2 marks)

8 XYZ Ltd commenced trading on 1 February 2008 and made up its first set of accounts to 30 April 2009.

What is XYZ Ltd’s first accounting period?



A 15 months ended 30 April 2009



B

12 months ended 31 January 2009



C

11 months ended 31 December 2008

D

(2 marks)

Three months ended 30 April 2008

9 Businesses must register for value added tax (VAT) if their turnover exceeds certain limits.

What is the turnover limit at which a business providing taxable services only must register for VAT?



A €37,500 per annum



B €45,000 per annum C €75,000 per annum

D €50,000 per annum

(2 marks)

10 Which one of the following will a VAT registered trader who accounts for VAT on the cash receipts basis pay VAT on?

A The total amount of sales invoiced in the relevant VAT period



B The total amount of cash received in the relevant VAT period



C The total amount of sales invoiced and cash received in the relevant VAT period

D The total amount of cash sales made by the company in the VAT period End of question paper

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(2 marks)

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Answers

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Sample Multiple Choice Question Paper T9 (IRL) Preparing Taxation Computations

Answers

1

The correct answer is (c). Monthly bus/train passes provided by employers as part of a salary sacrifice scheme or in lieu of bonus are not treated as benefits in kind.

2

The correct answer is (c). Irish dividends are taxed under Schedule F when received by Irish resident individuals.

3

The correct answer is (b). The deposit interest liable to tax is the grossed up amount received in the year ended 31 December 2008:

€160 x 100 = €200 80 4

The correct answer is (d). The eyesight tests, routine dental check-ups and contact lenses do not qualify for medical expenses relief.

5

The correct answer is (a).

6

The correct answer is (c). The cost of Mary’s shares is the original cost to her husband, in this case it is €2,500 (250/500 x €5,000). She sold the shares for €6,000 so her gain is €3,500.

7 The correct answer is (c). The capital loss incurred in the year ended 31 December 2008 can only be set against the capital gains made in the year ended 31 December 2008. It cannot be set against the trading profit or the rental income. 8

The correct answer is (b). A company cannot have an accounting period for longer than 12 months. Where a set of accounts is made up for a period longer than 12 months, the first accounting period is for 12 months and the second period is for the remainder, in this case it would be three months.

9 The correct answer is (a). A business engaged in the supply of taxable services only must register for VAT if its turnover exceeds or is likely to exceed €37,500 in a 12 month period. 10 The correct answer is (b). Businesses accounting for VAT on the cash receipts basis pay VAT on amounts received during the VAT period.

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