CANADIAN INCOME TAXATION TEST BANK/ 2023
g g g g g g
BEST GUIDE
g
,CHAPTERg1
1) Whichgofgthegfollowinggisgnotgconsideredgtogbegagseparategentitygforgtaxgpurposesg
ingCanada?
A) Angindividual
B) Agproprietorship
C) Agcorporation
D) Agtrust
2) Whichgofgthegfollowinggattitudesgandgactionsgisgmostglikelygtoghelpgdecision-
makersgdevelopgangefficientgapproachgtogtaxation?
A) Cashgflowsgshouldgbegconsideredgfromgagbefore-
taxgperspectivegwhengmakinggdecisions.
B) Functionalgmanagersgshouldgnotgbegheldgresponsiblegforgthegtaxgeffectsgofgdecisio
nsgwithingtheirgdivisions.
C) Taxgcostsgtogagbusinessgshouldgbegregardedgasgcontrollablegexpenses,gmuchglik
egproductgcostsgandgsellinggcosts.
D) AllgmanagersgshouldgowngagcopygofgthegIncomegTaxgAct.
3) Whichgofgthegfollowinggstatementsgisgtrue?
A) Dividendsgpaidgbygagcorporationgaregdeductiblegbygthatgcorporationgandgaregagformg
ofgpropertygincomegforgthegrecipient.
B) Dividendsgpaidgbygagcorporationgaregdeductiblegbygthatgcorporationgandgaregagformg
ofgbusinessgincomegforgthegrecipient.
C) Dividendsgpaidgbygagcorporationgaregnotgdeductiblegbygthatgcorporationgandgaregagfor
mgofgbusinessgincomegforgthegrecipient.
D) Dividendsgpaidgbygagcorporationgaregnotgdeductiblegbygthatgcorporationgandgaregagfor
mgofgpropertygincomegforgthegrecipient.
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,4) Whengassessinggthegvaluegofgagcorporation,gthegmostgrelevantginformationgthatgdecisio
n-gmakersgnormallygconsidergis
A) thegpotentialgforgbefore-taxgprofits.
B) thegpotentialgforgafter-taxgprofits.
C) thegcurrentgcorporategtaxgrate.
D) cashgflowgbefore-tax.
5) Incomegtaxgisgcalculatedgforgwhichgofgthegfollowinggjurisdictionalggroups?
A) Municipal,gprovincial,gandgfederal
B) Municipal,gfederal,gandgforeign
C) Provincial,gfederal,gandgforeign
D) Municipal,gprovincial,gandgforeign
6) Twoginvestorgcorporationsgmaygnotgentergjointlygintogwhichgofgthegfollowing?
A) Jointgventure
B) Partnership
C) Separategcorporation
D) Proprietorship
7) Whichgofgthegfollowinggstatementsgisgtrue?
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, A) Cashgflowgshouldgnevergbegcalculatedgongangafter-taxgbasis.
B) Thegtaxgcostgtogagbusinessgshouldgbegregardedgasgagcostgofgdoinggbusiness.
C) Incomegtaxgcannotgbegtreatedgasgagcontrollablegcost.
D) Thegvaluegofgangenterprisegshouldgbegbasedgongpre-taxgcashgflow.
8) Logangholdsgag7%ginterest-
bearinggdebtginstrumentgingGlowgCo.gGlowgCo.'sgtaxgrategisg27%,gandgLogangisgingag45%gtax
gbracket.gWhichgofgthegfollowinggstatementsgisgcorrect?
A) Thegafter-taxgcostgofgthegdebtginstrumentgisg5.11%gtogGlowgCo.,gandgthegafter-
taxgvaluegtogLogangisg3.85%.
B) Thegafter-taxgcostgofgthegdebtginstrumentgisg5.11%gtogGlowgCo.,gandgthegafter-
taxgvaluegtogLogangisg3.15%.
C) Thegafter-taxgcostgofgthegdebtginstrumentgisg1.89%gtogGlowgCo.,gandgthegafter-
taxgvaluegtogLogangisg3.15%.
D) Thegafter-taxgcostgofgthegdebtginstrumentgisg7%gtogGlowgCo.,gandgthegafter-
taxgvaluegtogLogangisg7%.
9) Whichgofgthegfollowingglistsgaccuratelygnamesgthegfiveggeneralgincomegcategoriesgforgta
xgpurposes?
A) Business,gInterest,gEmployment,gCapitalgGains,gOther
B) Business,gProperty,gEmployment,gCapitalgGains,gForeign
C) Business,gProperty,gEmployment,gCapitalgGains,gOther
D) Business,gProperty,gEmployment,gInvestments,gOther
10) Proprietorships,gcorporations,gpartnerships,glimitedgpartnerships,gjointgventures,gan
dgincomegtrustsgaregall
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g g g g g g
BEST GUIDE
g
,CHAPTERg1
1) Whichgofgthegfollowinggisgnotgconsideredgtogbegagseparategentitygforgtaxgpurposesg
ingCanada?
A) Angindividual
B) Agproprietorship
C) Agcorporation
D) Agtrust
2) Whichgofgthegfollowinggattitudesgandgactionsgisgmostglikelygtoghelpgdecision-
makersgdevelopgangefficientgapproachgtogtaxation?
A) Cashgflowsgshouldgbegconsideredgfromgagbefore-
taxgperspectivegwhengmakinggdecisions.
B) Functionalgmanagersgshouldgnotgbegheldgresponsiblegforgthegtaxgeffectsgofgdecisio
nsgwithingtheirgdivisions.
C) Taxgcostsgtogagbusinessgshouldgbegregardedgasgcontrollablegexpenses,gmuchglik
egproductgcostsgandgsellinggcosts.
D) AllgmanagersgshouldgowngagcopygofgthegIncomegTaxgAct.
3) Whichgofgthegfollowinggstatementsgisgtrue?
A) Dividendsgpaidgbygagcorporationgaregdeductiblegbygthatgcorporationgandgaregagformg
ofgpropertygincomegforgthegrecipient.
B) Dividendsgpaidgbygagcorporationgaregdeductiblegbygthatgcorporationgandgaregagformg
ofgbusinessgincomegforgthegrecipient.
C) Dividendsgpaidgbygagcorporationgaregnotgdeductiblegbygthatgcorporationgandgaregagfor
mgofgbusinessgincomegforgthegrecipient.
D) Dividendsgpaidgbygagcorporationgaregnotgdeductiblegbygthatgcorporationgandgaregagfor
mgofgpropertygincomegforgthegrecipient.
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,4) Whengassessinggthegvaluegofgagcorporation,gthegmostgrelevantginformationgthatgdecisio
n-gmakersgnormallygconsidergis
A) thegpotentialgforgbefore-taxgprofits.
B) thegpotentialgforgafter-taxgprofits.
C) thegcurrentgcorporategtaxgrate.
D) cashgflowgbefore-tax.
5) Incomegtaxgisgcalculatedgforgwhichgofgthegfollowinggjurisdictionalggroups?
A) Municipal,gprovincial,gandgfederal
B) Municipal,gfederal,gandgforeign
C) Provincial,gfederal,gandgforeign
D) Municipal,gprovincial,gandgforeign
6) Twoginvestorgcorporationsgmaygnotgentergjointlygintogwhichgofgthegfollowing?
A) Jointgventure
B) Partnership
C) Separategcorporation
D) Proprietorship
7) Whichgofgthegfollowinggstatementsgisgtrue?
Versiong1 2
, A) Cashgflowgshouldgnevergbegcalculatedgongangafter-taxgbasis.
B) Thegtaxgcostgtogagbusinessgshouldgbegregardedgasgagcostgofgdoinggbusiness.
C) Incomegtaxgcannotgbegtreatedgasgagcontrollablegcost.
D) Thegvaluegofgangenterprisegshouldgbegbasedgongpre-taxgcashgflow.
8) Logangholdsgag7%ginterest-
bearinggdebtginstrumentgingGlowgCo.gGlowgCo.'sgtaxgrategisg27%,gandgLogangisgingag45%gtax
gbracket.gWhichgofgthegfollowinggstatementsgisgcorrect?
A) Thegafter-taxgcostgofgthegdebtginstrumentgisg5.11%gtogGlowgCo.,gandgthegafter-
taxgvaluegtogLogangisg3.85%.
B) Thegafter-taxgcostgofgthegdebtginstrumentgisg5.11%gtogGlowgCo.,gandgthegafter-
taxgvaluegtogLogangisg3.15%.
C) Thegafter-taxgcostgofgthegdebtginstrumentgisg1.89%gtogGlowgCo.,gandgthegafter-
taxgvaluegtogLogangisg3.15%.
D) Thegafter-taxgcostgofgthegdebtginstrumentgisg7%gtogGlowgCo.,gandgthegafter-
taxgvaluegtogLogangisg7%.
9) Whichgofgthegfollowingglistsgaccuratelygnamesgthegfiveggeneralgincomegcategoriesgforgta
xgpurposes?
A) Business,gInterest,gEmployment,gCapitalgGains,gOther
B) Business,gProperty,gEmployment,gCapitalgGains,gForeign
C) Business,gProperty,gEmployment,gCapitalgGains,gOther
D) Business,gProperty,gEmployment,gInvestments,gOther
10) Proprietorships,gcorporations,gpartnerships,glimitedgpartnerships,gjointgventures,gan
dgincomegtrustsgaregall
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