1. The cognitive load framework emphasizes thata. deception is a cognitively complex task and it is cognitively easier to fabricate a plausible and convincing lie consistent with everything the observer knowsb. deception is a cognitively easy task and it is cognitively easier to fabricate a plausible and convincing lie consistent with everything the observer knowsc. deception is a cognitively easy task and it is cognitively more difficult to fabricate a plausible and convincing lie consistent with everything the observer knowsd. deception is a cognitively complex task and it is cognitively more difficult to fabricate a plausible and convincing lie consistent with everything the observer knowse. none of the above2. Experts agree that if when asked a question the hands gesture away from the bodya. the answer is probably falseb. the answer may be either false or truec. the answer is probably trued. the interviewee is uncertain of the correct answere. none of the above3. Based upon the following facts, determine a person’s preliminary understatement of income:Schedule C receipts…………………………………. $280,000Schedule C expenses………………………………. 135,000Personal living expenses…………………………… 65,000a. an overstatementb. $80,000c. $135,000d. $280,000e. None of the above4. Which statement is false?a. The source and application of funds technique is a variation of the net worth method that shows increases and decreases in a taxpayer’s accounts at the end of the year.b. Often the IRS agent will use the expenditure approach when a taxpayer is spending income lavishly rather than purchasing assets or investments.c. The expenditure approach is similar to the Cash T, except that the data used are the increases and decreases in the taxpayer’s accounts.d. The source and application of funds method is a variation of the bank deposit method.e. None of the above.5. Which statement is true?a. Beauty and barber shops are cash intensive businesses.b. Where the application of funds is less than the sources, a taxpayer is deemed to have an understatement of income.c. Where the application of funds is greater than the sources, a person is deemed to have an overstatement of income.d. The Cash T is appropriate for persons where a substantial amount of income is deposited in banks and the expenditures are proportionate to the income reported.e. None of the above is true6. In computing income under the net worth method, the following facts are found:Total assets $1,600,000Total liabilities 825,000Nondeductible expenses 120,000Net worth at beginning of year 560,000
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