Deck 12: Managing Taxes and Getting Management Assistance

Question 1

Many entrepreneurs get help growing their businesses by

A)forming a board of advisers
B)creating a mentoring committee
C)delegating management to an outside adviser
D)getting onto a board of directors of another company in their industry

Answer 1

A

Question 2

SBD stands for

A)Small Business Development Act
B)Small Business Directors' Liability Program
C)Small Business Design Initiative
D)Small Business Deduction

Answer 2

D

Question 3

Payments into Deferred Profit Sharing plans

A)represent an alternative to Vacation Pay
B)are not deductible to the company
C)are taxable to the employee only when received
D)can include dividends declared but not yet paid

Answer 3

C

Question 4

When selecting board members,it is advised that

A)candidates be subjected to background checks
B)they have senior level executive positions in the industry
C)they be willing to commit to the venture's mission
D)they be close friends of relatives of the entrepreneur

Question 5

The following are fundamental areas of tax management

A)tax deferral,continual tax planning and legal liability
B)personal world income,depreciation and marginal tax rates
C)income splitting,marginal tax rates and deductibles
D)tax funding,owners' equity and total external debt

Question 6

For tax purposes a business's income refers to

A)the business's total cash receipts
B)the profits the business makes
C)total sales by the business
D)the owners' salaries

Question 7

The Federal tax rate for incorporated businesses is

A)16% on the first $50,000.Of profit
B)about 11%
C)always the same as an individual's personal tax rate
D)a deterrent to new ventures

Question 8

Tax planning will address the issue of

A)executive loans
B)cash flow
C)bank borrowing
D)inadequate sales

Question 9

One of the top concerns of small businesses is

A)total tax burden
B)Provincial labor laws
C)Workers' compensation
D)Government debt

Question 10

Tax deferrals are

A)an unwritten rule of tax management
B)considered illegal
C)are a sign of poor corporate citizenship
D)considered unethical but legal

Question 11

Value added taxes

A)are levied on sales revenue
B)are levied on profits
C)are of little bother to small businesses
D)are based on customer credit terms

Question 12

Compared to business and property taxes,income taxes

A)can be more complicated
B)are less subject to interpretation
C)only have a minimal impact on cash flow
D)are straightforward to calculate

Question 13

A good way to explore the distinction between employee and subcontractor is to

A)interview other small contractors
B)perform an internet search for discussion boards on the topic
C)consult the CRA guide
D)apply common sense

Question 14

The area of tax management suffers from

A)the burden of uniform application across provinces
B)the boredom that flows from relatively stable legislation
C)the time it takes for the entrepreneur to prepare income tax returns
D)the complexity of tax principles

Question 15

When contracting one's services out,care should be taken to

A)deal with local,readily accessible businesses
B)seal the arrangement with a handshake with the owner personally
C)deduct all employee benefits
D)avoid an employment arrangement

Question 16

One of the identified functions of a board of advisers is

A)keeping the business's employees focused on their personal goals
B)to raise capital for the business
C)sharing their own marketing research
D)supporting day to day activities of the business

Question 17

Before using someone as an adviser,an entrepreneur

A)should ensure that the person is independently well off
B)should develop a social relationship with them
C)should assess or interview the person
D)should get feedback from their own employees about the business having an adviser

Question 18

An increased depreciation rate is

A)not allowed
B)available to start-up businesses when needed to reduce income taxes owing
C)is only available in an election year
D)allowed under a government accelerated capital cost allowance program

Question 19

The major desirable characteristic of a mentor is that they

A)have time available to work with a business
B)have experience in the role
C)work for no charge
D)are close to the age of the entrepreneur

Question 20

Entrepreneurs often purchase club memberships in order to meet customers

A)such memberships are deductible as "business entertaining"
B)such memberships are not deductible
C)it is illegal to meet customers in a private club
D)it is better to buy such memberships for good customers