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Canadian Income Taxation, 6/e
William Buckwold, University of Victoria
Taxation – Management's Forgotten Responsibility

Multiple Choice Quiz



1

Which of the following forms of business organization is directly subject to tax?
A)Joint venture
B)Corporation
C)Limited Partnership
D)Partnership
2

Which of the following is a complete list of the primary types of income that are applicable to general business activity?
A)Business, property, capital gains, employment and other.
B)Business, property and capital gains.
C)Business, property and employment.
D)Business, property, employment and capital gains.
3

Which of the following situations does not reflect all of the key variables to be considered in the business decision process?
A)Two corporations start a venture to earn business income in Ontario through a joint venture.
B)A corporation pays a dividend to its shareholders who are all individuals residing in Alberta.
C)A Saskatchewan corporation is expanding its retail operations into Manitoba.
D)A corporation is increasing its compensation to employees who all reside in B.C.
4

Which of the following would not be a responsibility of a functional manager.
A)To maintain updated information on changes in tax law and how to interpret and apply it.
B)To consider the tax impact of alternative strategies under investigation.
C)To identify alternatives that will minimize tax without creating an overpowering impact on non-tax-related areas.
D)To justify with non-tax and non-quantitative reasons the choice of a higher-tax alternative.
5

Which of the following would not be an efficient management approach to taxation?
A)Income tax should be treated as a controllable expense.
B)Cash flows, whether for expenses or asset acquisitions, should be considered after tax.
C)Responsibility for tax effects should be allocated to the financial executive of the company.
D)Management must have a means of bridging the gap between interpreting information and applying it to business decisions.




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