Deck 12: Management Help: Mentors, Boards of Advisors or Directors, and Tax Assistance

Question 1

Payments into deferred profit-sharing plans:

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

Answer 1

C

Question 2

Many entrepreneurs get help growing their businesses by:

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

Answer 2

D

Question 3

Entrepreneurs often purchase club memberships in order to meet customers.

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

Answer 3

D

Question 4

Tax planning will address the issue of:

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

Question 5

When selecting board members, it is advised that:

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

Question 6

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

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

Question 7

For tax purposes a business's income refers to:

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

Question 8

SBD stands for:

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

Question 9

The major desirable characteristic of a mentor is that they:

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

Question 10

One of the top concerns of small businesses is:

A) workers' compensation.
B) total tax burden.
C) provincial labour laws.
D) government debt.

Question 11

Tax deferrals are:

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

Question 12

Before using someone as an adviser, an entrepreneur:

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

Question 13

The area of tax management suffers from:

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

Question 14

What allows the owner-manager to calculate the after-tax effects of extra income and expenses?

A) Total tax rate
B) Marginal tax rate
C) Tax deferral
D) Deductibles

Question 15

When a business has no tax liability, this means that it is:

A) not filing income taxes regularly.
B) making large profits.
C) claiming more deductions than it should.
D) losing money.

Question 16

Compared to business and property taxes, income taxes:

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

Question 17

One of the identified functions of a board of advisers is:

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

Question 18

The following are fundamental areas of tax management:

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

Question 19

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

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

Question 20

A common mistake for entrepreneurs is to work with:

A) whatever mentor is easy to find.
B) a mentor that is prepared to provide unlimited time.
C) a mentor that specializes in business start-ups.
D) a mentor that is most inexpensive.

Question 21

An increased depreciation rate is:

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

Question 22

The federal tax rate for incorporated businesses is:

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

Question 23

Currently, CRA allows how much of a lifetime capital gains exemption on the shares of a small business corporation?

A) $1,000,000
B) $750,000
C) $500,000
D) $800,000

Question 24

Value added taxes:

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