Question

q 1. Liquidity refers to

Select one:

a. the ease of converting a financial resource into cash without a loss in value.

b. the amount of insurance coverage a person has.

c. a positive net cash flow to cover unexpected expenses.

d. a person's inability to pay his or her debt or other obligations.

Question 2

Balance sheet assets should be valued at

Select one:

a. insured value.

b. fair market value.

c. original purchase price.

d. replacement value.

Question 3

You have a salary of $30 000, an RPP deduction of $2000, and union dues of $800. The federal tax rate is 15.5 percent. What federal tax do you owe?

Select one:

a. $4340

b. $1416

c. $2216

d. $4216

Question 4

Tax credits are used to reduce tax

Select one:

a. when calculating total income.

b. after total taxes payable are calculated.

c. when calculating taxable income.

d. before you subtract all deductions.

Question 5

Even if you have no tax to pay it is beneficial to file a tax return because

Select one:

a. you may be eligible for Employment Insurance benefits.

b. you can make use of non-refundable tax credits during the year.

c. it is required by law, if you are over 18.

d. you may be eligible for a tax-free refundable GST/HST credit.

Answer 1

1) Solution: the ease of converting a financial resource into cash without a loss in value.

Explanation: Liquidity refers to the ease with which a financial resource can be turned into money without loss of value

　

2) Solution: fair market value

Explanation: Balance sheet assets should be valued at fair market value

　

3) Solution: $4216

Explanation: 15.5% * (30,000 - 2000 - 800) = 4216

　

4) Solution: after total taxes payable are calculated

Explanation: Tax credits are used to decrease the tax after the computation of total payable taxes

　

5) Solution: you may be eligible for a tax-free refundable GST/HST credit

Explanation: To avail GST/HST credit an individual must file a tax return