Canadian Income Taxation (2022-2023) 25e William
Buckwold, Joan Kitunen, Matthew Roman (Test Bank)
CANADIAN INCOME TAXATION TEST BANK/
2023 BEST GUIDE
CHAPTER 1
• Which of the following is not considered to be a separate entity for tax
purposes inCanada?
• An individual
• A proprietorship
• A corporation
• A trust
• Which of the following attitudes and actions is most likely to help decision-
makersdevelop an efficient approach to taxation?
• Cash flows should be considered from a before-tax perspective when
makingdecisions.
, • Functional managers should not be held responsible for the tax effects of
decisionswithin their divisions.
• Tax costs to a business should be regarded as controllable expenses, much
likeproduct costs and selling costs.
• All managers should own a copy of the Income Tax Act.
• Which of the following statements is true?
• Dividends paid by a corporation are deductible by that corporation and are a
form ofproperty income for the recipient.
• Dividends paid by a corporation are deductible by that corporation and are a
form ofbusiness income for the recipient.
• Dividends paid by a corporation are not deductible by that corporation and are a
formof business income for the recipient.
• Dividends paid by a corporation are not deductible by that corporation and are a
formof property income for the recipient.
• When assessing the value of a corporation, the most relevant information that
decision- makers normally consider is
• the potential for before-tax profits.
• the potential for after-tax profits.
• the current corporate tax rate.
• cash flow before-tax.
• Income tax is calculated for which of the following jurisdictional groups?
• Municipal, provincial, and federal
• Municipal, federal, and foreign
• Provincial, federal, and foreign
• Municipal, provincial, and foreign
,• Two investor corporations may not enter jointly into which of the following?
• Joint venture
• Partnership
• Separate corporation
• Proprietorship
• Which of the following statements is true?
• Cash flow should never be calculated on an after-tax basis.
• The tax cost to a business should be regarded as a cost of doing business.
• Income tax cannot be treated as a controllable cost.
• The value of an enterprise should be based on pre-tax cash flow.
• Logan holds a 7% interest-bearing debt instrument in Glow Co. Glow Co.'s tax
rate is27%, and Logan is in a 45% tax bracket. Which of the following statements is
correct?
• The after-tax cost of the debt instrument is 5.11% to Glow Co., and the after-tax
valueto Logan is 3.85%.
• The after-tax cost of the debt instrument is 5.11% to Glow Co., and the after-tax
valueto Logan is 3.15%.
• The after-tax cost of the debt instrument is 1.89% to Glow Co., and the after-tax
valueto Logan is 3.15%.
• The after-tax cost of the debt instrument is 7% to Glow Co., and the after-tax
value toLogan is 7%.
, • Which of the following lists accurately names the five general income categories for
taxpurposes?
• Business, Interest, Employment, Capital Gains, Other
• Business, Property, Employment, Capital Gains, Foreign
• Business, Property, Employment, Capital Gains, Other
• Business, Property, Employment, Investments, Other
• Proprietorships, corporations, partnerships, limited partnerships, joint ventures,
and income trusts are all
• categories of income for tax purposes.
• tax jurisdictions.
• examples of financial instruments.
• forms of business.
• Which of the following statements regarding taxation within jurisdictions in
Canada istrue?
• Federal and provincial or territorial tax brackets are always identical to one another.
• Only federal taxes apply to individuals while both federal and provincial or
territorialtaxes apply to corporations.
• Both federal and provincial or territorial taxes apply to Canadian taxpayers.
• Only federal taxes apply to corporations while both federal and provincial taxes
applyto individuals.
• Jamie is an employee at ABC Ltd. and is in a 45% tax bracket. ABC Ltd. has a tax
rate of 27%. The company has offered Jamie a 10% pay raise. Jamie's current salary is
$50,000. What isafter-tax cost of the raise to ABC Ltd.?
Buckwold, Joan Kitunen, Matthew Roman (Test Bank)
CANADIAN INCOME TAXATION TEST BANK/
2023 BEST GUIDE
CHAPTER 1
• Which of the following is not considered to be a separate entity for tax
purposes inCanada?
• An individual
• A proprietorship
• A corporation
• A trust
• Which of the following attitudes and actions is most likely to help decision-
makersdevelop an efficient approach to taxation?
• Cash flows should be considered from a before-tax perspective when
makingdecisions.
, • Functional managers should not be held responsible for the tax effects of
decisionswithin their divisions.
• Tax costs to a business should be regarded as controllable expenses, much
likeproduct costs and selling costs.
• All managers should own a copy of the Income Tax Act.
• Which of the following statements is true?
• Dividends paid by a corporation are deductible by that corporation and are a
form ofproperty income for the recipient.
• Dividends paid by a corporation are deductible by that corporation and are a
form ofbusiness income for the recipient.
• Dividends paid by a corporation are not deductible by that corporation and are a
formof business income for the recipient.
• Dividends paid by a corporation are not deductible by that corporation and are a
formof property income for the recipient.
• When assessing the value of a corporation, the most relevant information that
decision- makers normally consider is
• the potential for before-tax profits.
• the potential for after-tax profits.
• the current corporate tax rate.
• cash flow before-tax.
• Income tax is calculated for which of the following jurisdictional groups?
• Municipal, provincial, and federal
• Municipal, federal, and foreign
• Provincial, federal, and foreign
• Municipal, provincial, and foreign
,• Two investor corporations may not enter jointly into which of the following?
• Joint venture
• Partnership
• Separate corporation
• Proprietorship
• Which of the following statements is true?
• Cash flow should never be calculated on an after-tax basis.
• The tax cost to a business should be regarded as a cost of doing business.
• Income tax cannot be treated as a controllable cost.
• The value of an enterprise should be based on pre-tax cash flow.
• Logan holds a 7% interest-bearing debt instrument in Glow Co. Glow Co.'s tax
rate is27%, and Logan is in a 45% tax bracket. Which of the following statements is
correct?
• The after-tax cost of the debt instrument is 5.11% to Glow Co., and the after-tax
valueto Logan is 3.85%.
• The after-tax cost of the debt instrument is 5.11% to Glow Co., and the after-tax
valueto Logan is 3.15%.
• The after-tax cost of the debt instrument is 1.89% to Glow Co., and the after-tax
valueto Logan is 3.15%.
• The after-tax cost of the debt instrument is 7% to Glow Co., and the after-tax
value toLogan is 7%.
, • Which of the following lists accurately names the five general income categories for
taxpurposes?
• Business, Interest, Employment, Capital Gains, Other
• Business, Property, Employment, Capital Gains, Foreign
• Business, Property, Employment, Capital Gains, Other
• Business, Property, Employment, Investments, Other
• Proprietorships, corporations, partnerships, limited partnerships, joint ventures,
and income trusts are all
• categories of income for tax purposes.
• tax jurisdictions.
• examples of financial instruments.
• forms of business.
• Which of the following statements regarding taxation within jurisdictions in
Canada istrue?
• Federal and provincial or territorial tax brackets are always identical to one another.
• Only federal taxes apply to individuals while both federal and provincial or
territorialtaxes apply to corporations.
• Both federal and provincial or territorial taxes apply to Canadian taxpayers.
• Only federal taxes apply to corporations while both federal and provincial taxes
applyto individuals.
• Jamie is an employee at ABC Ltd. and is in a 45% tax bracket. ABC Ltd. has a tax
rate of 27%. The company has offered Jamie a 10% pay raise. Jamie's current salary is
$50,000. What isafter-tax cost of the raise to ABC Ltd.?
