Accounting Q&A · Taxation · Topic 8
Practise 25 questions on assessments, audit evidence, response deadlines and appeal preparation. Try each question before opening the answer. The examples use hypothetical amounts and rates. Check the rules for your jurisdiction and tax year before applying them.
Worked example
A notice adds 4,000 to taxable income. Reconcile the adjustment to the return and evidence. At a hypothetical 20% rate, the added principal tax is 800 before interest, penalties or credits.
Key concepts
1. What is a tax assessment?
A formal determination of tax under the applicable procedure.
2. What is self-assessment?
The taxpayer calculates and reports liability under the relevant system.
3. What is an amended assessment?
A change to a prior determination for a period.
4. What is a tax audit?
An authority review of records and reported tax positions.
5. Does an audit notice prove an error?
It starts a review. Findings depend on the facts and rules.
6. What should you read first in a notice?
Identify the authority, period, issue, requested action and deadline.
7. How should a notice be authenticated?
Use an official account or independently verified contact channel.
8. Why track service dates?
They can determine response and appeal deadlines.
9. What documents should support deductions?
Relevant invoices, payment records and evidence of eligibility.
10. How do you organise an audit response?
Map each request to a concise answer and numbered evidence.
Applying the rules
11. What is a reconciliation schedule?
A bridge between figures in different records, such as the ledger and return.
12. Why record unresolved differences separately?
They require follow-up rather than an unsupported adjustment.
13. What is a proposed adjustment?
A change the authority proposes before completing the applicable process.
14. What is an objection?
A formal challenge under procedures that vary by jurisdiction.
15. What is an appeal?
A request for review by the body designated under applicable rules.
16. What should an objection identify?
The disputed issue, facts, legal basis, evidence and remedy requested.
17. Does filing an appeal suspend payment?
Check local rules and whether a stay or separate request is available.
18. Can undisputed amounts be handled separately?
Some systems permit or require separate payment or treatment.
19. What is a settlement?
An agreed resolution where the governing procedure allows it.
Review questions
20. An audit adds 3,000 to the base at 15%. What is added principal tax?
450 before other effects.
21. Why distinguish principal tax from interest and penalties?
Each can have a different basis, period and review process.
22. What should you retain after an audit?
Notices, responses, evidence, decisions, payments and amended calculations.
23. How can evidence be shared securely?
Use approved channels and limit disclosure to required material.
24. Why distinguish a return correction from an appeal?
They address different situations and may have different deadlines.
25. What is a practical first-day checklist?
Verify the notice, log deadlines, assign responsibility and preserve records.