1. Which one of the following is not a relevant test in determining whether an expense is deductible for tax purposes? a. Income earning purpose test b. Capital test c. Taxation test d. Reasonableness test
2. Which one of the following expenses is not deductible by a commissioned salesperson? a. Utilities b. Property taxes c. Insurance d. Mortgage interest
3. Which one of the following is not a condition of deductibility for a reserve on doubtful debts (AFDA)? a. The reverse cannot exceed $10,000 b. The reserve must be reasonable c. The reserve must be based on doubtful debts d. The debt when established, created income for the taxpayer
4. Which one of the following is an accounting rule with respect to depreciable property? a. Gaines & losses are recognized b. Only capital gains are recognized c. Only one-half of the capital gain is taxable d. Capital losses are not recognized on depreciable property
5. Which one of the following is not true of class 10.1 passenger vehicles? a. Maximum addition to the class is $30,000 on most vehicles & $55,000 on zero-emission vehicles b. Passenger vehicles costing less than $30,000 are placed in the class c. No recapture or terminal loss when vehicle is sold d. 50% of CCA is claimable in the year of disposal
6. Which one of the following is not true of class 14 intangible assets? a. The assets have an unlimited life b. The assets have a limited life c. CCA is determined separately for each item d. Annual CCA is determined by dividing the total number of days in the asset’s life by the number of days in the taxation year
7. Which one of the following is not considered income from property? a. Dividends b. Interest c. Rental income d. Taxable capital gains
8. Which one of the following is not an accepted individual taxpayer method for declaring interest income? a. The receivable method b. The amortized cost method c. The cash method d. The anniversary day accrual method
9. Which one of the following is not an allowable deduction from rental income? a. Insurance b. Property taxes c. Repairs & maintenance d. All of the above are allowable deductions
10. Which one of the following is not a factor in establishing a taxpayer’s original intent? a. Nature of the asset b. Period of ownership c. Nature of the transaction d. Relation of transaction to taxpayer’s business
11. Which one of the following is not considered as Listed Personal Property (LPP) for tax purposes? a. A painting b. A vehicle c. A stamp d. A coin
12. Which one of the following would not result in a deemed disposition for tax purposes? a. Change in use of an asset b. A taxpayer giving up Canadian residency c. The death of a taxpayer d. All of the above would result in a deemed disposition