Introduction to Federal Income Taxation
in Canada, 47th Edition, By Julie Robson
Solution manuals Julie Robson Devan
Mescall David Lin PRACTICE QUESTIONS
|ORIGINAL QUESTIONS & ANSWERS
|DETAILED RATIONALES |HINTED
COMPLETE EXAM PREP GRADED
A+*INSTANT DOWNLOAD PDF
1. Which legislation is the principal source of federal income-tax
rules in Canada?
A. Canada Business Corporations Act
B. Excise Tax Act
C. Income Tax Act
D. Financial Administration Act
Answer: C. Income Tax Act
The Income Tax Act contains the principal statutory rules governing
federal income taxation in Canada.
2. What is the primary purpose of an income tax?
A. To regulate corporations
B. To raise government revenue based on income
C. To establish accounting standards
D. To determine market prices
,Answer: B. To raise government revenue based on income
Income tax is principally a revenue-raising mechanism, although
taxation can also pursue policy objectives.
3. Which characteristic means that taxpayers with similar economic
circumstances should generally bear similar tax burdens?
A. Vertical equity
B. Neutrality
C. Horizontal equity
D. Certainty
Answer: C. Horizontal equity
Horizontal equity concerns comparable taxpayers being treated
similarly.
4. Vertical equity generally concerns differences between taxpayers
who have:
A. The same income
B. The same employer
C. Different levels of economic ability
D. The same residence
Answer: C. Different levels of economic ability
Vertical equity considers how tax burdens should differ as taxpayers'
ability to pay changes.
5. What does tax neutrality generally seek to minimize?
A. Tax filing requirements
B. Government revenue
C. Distortions in economic decision-making caused by taxation
D. Taxpayer identification
,Answer: C. Distortions in economic decision-making caused by
taxation
Neutrality means the tax system should interfere as little as practical
with economic choices.
6. Which concept is most closely associated with the requirement
that taxpayers know their tax obligations?
A. Neutrality
B. Certainty
C. Incidence
D. Integration
Answer: B. Certainty
Certainty means taxpayers should be able to determine the nature
and amount of their tax obligations.
7. The economic incidence of a tax refers primarily to:
A. Who files the tax return
B. Who ultimately bears the economic burden of the tax
C. Who administers the tax
D. Who calculates accounting income
Answer: B. Who ultimately bears the economic burden of the tax
Legal responsibility for remitting a tax can differ from the person who
ultimately bears its economic burden.
8. Which distinction is particularly important when determining
whether a receipt is taxable?
A. Cash versus cheque
B. Employee versus customer
, C. Income versus capital
D. Federal versus municipal
Answer: C. Income versus capital
The Income Tax Act applies different rules to income receipts and
capital amounts.
9. A tax professional's compliance role primarily involves:
A. Eliminating all tax
B. Meeting applicable legal filing and payment obligations
C. Choosing political policies
D. Setting tax rates
Answer: B. Meeting applicable legal filing and payment obligations
Compliance involves correctly fulfilling statutory filing, reporting, and
payment requirements.
10. Tax planning is generally concerned with:
A. Concealing taxable transactions
B. Ignoring tax legislation
C. Structuring transactions within the law to achieve legitimate tax
objectives
D. Destroying tax records
Answer: C. Structuring transactions within the law to achieve
legitimate tax objectives
Tax planning involves legally considering the tax consequences of
alternative transactions.
11. Which is an example of tax evasion?
in Canada, 47th Edition, By Julie Robson
Solution manuals Julie Robson Devan
Mescall David Lin PRACTICE QUESTIONS
|ORIGINAL QUESTIONS & ANSWERS
|DETAILED RATIONALES |HINTED
COMPLETE EXAM PREP GRADED
A+*INSTANT DOWNLOAD PDF
1. Which legislation is the principal source of federal income-tax
rules in Canada?
A. Canada Business Corporations Act
B. Excise Tax Act
C. Income Tax Act
D. Financial Administration Act
Answer: C. Income Tax Act
The Income Tax Act contains the principal statutory rules governing
federal income taxation in Canada.
2. What is the primary purpose of an income tax?
A. To regulate corporations
B. To raise government revenue based on income
C. To establish accounting standards
D. To determine market prices
,Answer: B. To raise government revenue based on income
Income tax is principally a revenue-raising mechanism, although
taxation can also pursue policy objectives.
3. Which characteristic means that taxpayers with similar economic
circumstances should generally bear similar tax burdens?
A. Vertical equity
B. Neutrality
C. Horizontal equity
D. Certainty
Answer: C. Horizontal equity
Horizontal equity concerns comparable taxpayers being treated
similarly.
4. Vertical equity generally concerns differences between taxpayers
who have:
A. The same income
B. The same employer
C. Different levels of economic ability
D. The same residence
Answer: C. Different levels of economic ability
Vertical equity considers how tax burdens should differ as taxpayers'
ability to pay changes.
5. What does tax neutrality generally seek to minimize?
A. Tax filing requirements
B. Government revenue
C. Distortions in economic decision-making caused by taxation
D. Taxpayer identification
,Answer: C. Distortions in economic decision-making caused by
taxation
Neutrality means the tax system should interfere as little as practical
with economic choices.
6. Which concept is most closely associated with the requirement
that taxpayers know their tax obligations?
A. Neutrality
B. Certainty
C. Incidence
D. Integration
Answer: B. Certainty
Certainty means taxpayers should be able to determine the nature
and amount of their tax obligations.
7. The economic incidence of a tax refers primarily to:
A. Who files the tax return
B. Who ultimately bears the economic burden of the tax
C. Who administers the tax
D. Who calculates accounting income
Answer: B. Who ultimately bears the economic burden of the tax
Legal responsibility for remitting a tax can differ from the person who
ultimately bears its economic burden.
8. Which distinction is particularly important when determining
whether a receipt is taxable?
A. Cash versus cheque
B. Employee versus customer
, C. Income versus capital
D. Federal versus municipal
Answer: C. Income versus capital
The Income Tax Act applies different rules to income receipts and
capital amounts.
9. A tax professional's compliance role primarily involves:
A. Eliminating all tax
B. Meeting applicable legal filing and payment obligations
C. Choosing political policies
D. Setting tax rates
Answer: B. Meeting applicable legal filing and payment obligations
Compliance involves correctly fulfilling statutory filing, reporting, and
payment requirements.
10. Tax planning is generally concerned with:
A. Concealing taxable transactions
B. Ignoring tax legislation
C. Structuring transactions within the law to achieve legitimate tax
objectives
D. Destroying tax records
Answer: C. Structuring transactions within the law to achieve
legitimate tax objectives
Tax planning involves legally considering the tax consequences of
alternative transactions.
11. Which is an example of tax evasion?
