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Payroll Fundamentals 1 Final Exam |
Advanced Practice | 100% Pass
Guaranteed | Graded A+
[1] The four primary expense reimbursement methods for automobile expenses are the per-
kilometre allowance, the flat-rate monthly allowance, the leasing allowance, and:
A. The actual expense method
B. The mileage log method
C. The flat-rate weekly allowance
D. The business-use percentage method
☑ Correct Answer: A
☑ Explanation: The four expense reimbursement methods are the per-kilometre
allowance, the flat-rate monthly allowance, the leasing allowance, and the actual expense
method. The actual expense method reimburses employees based on actual receipts and
documentation. Mileage logs support per-kilometre claims, and business-use percentage may
be used with the actual expense method, but they are not separate methods themselves. Option
C (flat-rate weekly) is not a recognized method.
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[2] Which of the following driving activities is classified as personal driving for automobile
allowance purposes?
A. Driving to existing and prospective clients
B. Driving to other office locations of the employer
C. Travel between home and work, even if the employer insists the employee drive the vehicle
home
D. When an employee travels directly from home to a point of call which is not the employer's
regular place of business
☑ Correct Answer: C
☑ Explanation: Personal driving includes vacation travel, driving to conduct personal
business, and travel between home and work, even if the employer insists the employee drive
the vehicle home. Business driving includes driving to existing and prospective clients, points of
call, and other office locations of the employer, as well as travel directly from home to a point of
call that is not the regular place of business.
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[3] An automobile is defined as a motor vehicle designed or adapted to primarily carry
individuals on highways and streets, with a seating capacity of not more than:
A. The driver and four passengers
B. The driver and six passengers
C. The driver and eight passengers
D. The driver and ten passengers
☑ Correct Answer: C
☑ Explanation: An automobile is defined as a motor vehicle designed or adapted to
primarily carry individuals on highways and streets, with a seating capacity of not more than the
driver and eight passengers. Vehicles with larger seating capacities are typically classified as
vans or buses for tax purposes.
[4] The Canada Revenue Agency (CRA) and Revenu Québec (RQ) define a car allowance as
reasonable if:
A. The allowance is based solely on business kilometres driven in a calendar year
B. The allowance is based on a percentage of the employee's salary
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C. The allowance is paid monthly regardless of business use
D. The allowance covers both personal and business kilometres equally
☑ Correct Answer: A
☑ Explanation: A car allowance is considered reasonable if it is based solely on business
kilometres driven in a calendar year and the amount provided follows government-prescribed
reasonable guidelines. Allowances based on salary percentages, flat monthly amounts
regardless of business use, or covering personal kilometres would not meet the reasonableness
test.
[5] The number of thirty-day periods that an automobile is available to the employee for the
current taxation year is known as:
A. Standby charge
B. Operating cost benefit
C. Availability
D. Reasonable allowance
Payroll Fundamentals 1 Final Exam |
Advanced Practice | 100% Pass
Guaranteed | Graded A+
[1] The four primary expense reimbursement methods for automobile expenses are the per-
kilometre allowance, the flat-rate monthly allowance, the leasing allowance, and:
A. The actual expense method
B. The mileage log method
C. The flat-rate weekly allowance
D. The business-use percentage method
☑ Correct Answer: A
☑ Explanation: The four expense reimbursement methods are the per-kilometre
allowance, the flat-rate monthly allowance, the leasing allowance, and the actual expense
method. The actual expense method reimburses employees based on actual receipts and
documentation. Mileage logs support per-kilometre claims, and business-use percentage may
be used with the actual expense method, but they are not separate methods themselves. Option
C (flat-rate weekly) is not a recognized method.
,2
[2] Which of the following driving activities is classified as personal driving for automobile
allowance purposes?
A. Driving to existing and prospective clients
B. Driving to other office locations of the employer
C. Travel between home and work, even if the employer insists the employee drive the vehicle
home
D. When an employee travels directly from home to a point of call which is not the employer's
regular place of business
☑ Correct Answer: C
☑ Explanation: Personal driving includes vacation travel, driving to conduct personal
business, and travel between home and work, even if the employer insists the employee drive
the vehicle home. Business driving includes driving to existing and prospective clients, points of
call, and other office locations of the employer, as well as travel directly from home to a point of
call that is not the regular place of business.
,3
[3] An automobile is defined as a motor vehicle designed or adapted to primarily carry
individuals on highways and streets, with a seating capacity of not more than:
A. The driver and four passengers
B. The driver and six passengers
C. The driver and eight passengers
D. The driver and ten passengers
☑ Correct Answer: C
☑ Explanation: An automobile is defined as a motor vehicle designed or adapted to
primarily carry individuals on highways and streets, with a seating capacity of not more than the
driver and eight passengers. Vehicles with larger seating capacities are typically classified as
vans or buses for tax purposes.
[4] The Canada Revenue Agency (CRA) and Revenu Québec (RQ) define a car allowance as
reasonable if:
A. The allowance is based solely on business kilometres driven in a calendar year
B. The allowance is based on a percentage of the employee's salary
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C. The allowance is paid monthly regardless of business use
D. The allowance covers both personal and business kilometres equally
☑ Correct Answer: A
☑ Explanation: A car allowance is considered reasonable if it is based solely on business
kilometres driven in a calendar year and the amount provided follows government-prescribed
reasonable guidelines. Allowances based on salary percentages, flat monthly amounts
regardless of business use, or covering personal kilometres would not meet the reasonableness
test.
[5] The number of thirty-day periods that an automobile is available to the employee for the
current taxation year is known as:
A. Standby charge
B. Operating cost benefit
C. Availability
D. Reasonable allowance
