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CHAPTER 7 – Questions and Answers

CHAPTER 7 – Questions and Answers

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CHAPTER 7 – Questions and Answers

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  1. CHAPTER 7 – Questions and Answers • Students - Here are 14 questions to test what you have learned! • Press the buttons on the left to check your answers. • If you answer correctly, I will tell you “Affirmative”. • If you answer incorrectly, I will tell you “Negative”. • IT IS TIME TOPROCEED TO THE FIRST QUESTION

  2. stopping all collection action on the debt. ceasing active collection on the debt. C. writing-off the debt. Question 1 - When you “terminate collection action” on a debt you are:

  3. A. being lazy. B. currently-not-collectible. C. suspension. Question 2 - Temporarily ceasing active collection on a debt is called:

  4. A. The debtor is discharged in bankruptcy. B. You cannot locate the debtor. C. Your boss tells you to finish action on the debt before you go on vacation. D. The debtor does not have the ability to pay any portion of the debt. Question 3 - All of the following are legitimate reasons for terminating collection action except:

  5. A. A decision by Santa Clause that a child should not receive a present for the upcoming Christmas. B. A determination that a debtor does not have to pay a debt that is owed. C. A determination that a debt has no value for accounting purposes and an agency’s action to reflect this determination in the agency’s accountingreports. Question 4 - The term write-off refers to:

  6. A. True B. False C. True and False Question 5 - You may only write-off a debt after the debt has been terminated:

  7. A. Two B. Three C. This is a trick question - there is no such thing as OMB. Question 6 - According to OMB Circular No. A-129, how many classifications of write-off are there?

  8. A. Termination and currently-not-collectible. B. Jack and Jill. C. Currently-not-collectible and close-out. Question 7 - The two classifications of write-off are called:

  9. A. Before it is terminated. B. When it is determined that the agency does not intend to take any further action to collect the debt. C. When it is determined that a debt is ineligible for the Treasury Offset Program. Question 8 - A debt is classified as “close-out”...

  10. A. A form filed with the Internal Revenue Service used to report potential income of a debtor whose debt has been closed-out. B. A Federal Claims Collection Standards section dealing with termination of indebtedness. C. A new jumbo aircraft created by Boeing that can hold up to 1099 passengers. Question 9 - A 1099-C is...

  11. A. $1.37 B. $500 C. $600 Question 10 - The dollar threshold for mandatory 1099-C reporting is:

  12. A. A lineup at a police station where a witness to a crime identifies a suspect. B. An event that triggers the requirement to report a discharge of indebtedness to IRS as potential income. C. A verifiable UFO siting. Question 11 - What is an “identifiable event”?

  13. A. 6 B. 8 C. Its not the quantity that matters, but the quality. Question 12 - How many identifiable events are there under IRS regulations?

  14. Active collection --- Federal Claims Collection Standards Discharge of Indebtedness --- Internal Revenue Code Currently-not-collectible --- OMB Circular No. A-129 B. Active collection --- OMB Circular No. A-129 Discharge of Indebtedness --- Internal Revenue Code Currently-not-collectible --- Federal Claims Collection Standards C. Active collection --- The Bone Collector Discharge of Indebtedness --- A River Runs Through It Currently-not-collectible --- The Merchant of Venice Question 13 - Which answer has each of the terms on the left matched to the appropriate source document on the right.

  15. A. Close-out the debt and issue a 1099-C. B. Terminate collection action on the debt. Question 14 - If a debtor files for Chapter 11 bankruptcy protection, the agency should: C. Write-off the debt. D. Suspend collection action until the bankruptcy case is dismissed.