Quiz 1: Taxation-Its Role in Decision Making
Business
Q 1Q 1
Which of the following is not considered to be a separate entity for tax purposes in Canada?
A) Individuals
B) Proprietorships
C) Corporations
D) Trusts
Free
Multiple Choice
B
Q 2Q 2
Which of the following attitudes and actions will help decision-makers develop an efficient approach to taxation?
A) Cash flows should be considered from a before-tax perspective when making decisions.
B) Functional managers should not be held responsible for the tax effects of decisions within their divisions.
C) Tax costs to a business should be regarded as controllable expenses, much like product costs and selling costs.
D) All managers should own a copy of the Income Tax Act.
Free
Multiple Choice
C
Q 3Q 3
Which of the following statements is true?
A) Payment of the return on equity is deductible by the corporation and is a form of property income for the individual.
B) Payment of the return on equity is deductible by the corporation and is a form of business income for the individual.
C) Payment of the return on equity is not deductible by the corporation and is a form of business income for the individual.
D) Payment of the return on equity is not deductible by the corporation and is a form of property income for the individual.
Free
Multiple Choice
D
Q 4Q 4
When assessing the value of a corporation,the most relevant information that decision-makers normally consider is
A) the potential for before-tax profits.
B) the potential for after-tax profits.
C) the current rate of corporate tax.
D) cash flow before-tax.
Free
Multiple Choice
Q 5Q 5
Income tax is calculated for which of the following jurisdictional groups?
A) Municipal, provincial, and federal
B) Municipal, federal, and international
C) Provincial, federal, and international
D) Municipal, provincial, and international
Free
Multiple Choice
Q 6Q 6
Two investor corporations may not enter jointly into which of the following?
A) Joint venture
B) Partnership
C) Separate corporation
D) Proprietorship
Free
Multiple Choice
Q 7Q 7
Which of the following statements is false?
A) Cash flow should be calculated on an after-tax basis.
B) The tax cost to a business should not be regarded as a cost of doing business.
C) Income tax should be considered a controllable cost.
D) The value of an enterprise should not be based on pre-tax cash flow.
Free
Multiple Choice
Free
Essay
Q 9Q 9
ABC Corporation is in a 25% income tax bracket.John Adams is an employee at ABC.He is in a 40% tax bracket.The company has offered John a 10% pay raise.His current salary is $50,000.
Required:
A)Calculate the after-tax cost of the raise to the corporation.
B)Calculate the after-tax cost of the raise for John.
Show all calculations.
Free
Essay
Free
Essay