5) What is a reserve? Briefly explain the reserve system that is used in the ITA...

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5) What is a reserve? Briefly explain the reserve system that is used in the ITA with respect to income from a business. Answer: 6) List three reserves that can be claimed with respect to a business for income tax purposes. Answer: 7) Compare the general process used to determine doubtful debts for accounting purposes with the process for income tax purposes. Answer: 8) The ability to claim a reserve for receivables (e.g. unpaid amounts) produces results that are similar to those that would arise if only cash sales were required to be included in business income. However, the ability to claim this type of reserve is restricted. Describe the restrictions. Answer: 9) ITA 18 lists a number of general limitations that affect what can be claimed as a deduction with respect to a business. Identify four of these limitations. Answer: Practice 10) Describe the income tax treatment that applies to interest and property tax on land. Answer: Chapter 06 11) Both employees and individuals carrying on a business as a sole proprietor can claim expenses for a home office. Is the income tax treatment the same? If not, describe the differences. Answer: 5) What is a reserve? Briefly explain the reserve system that is used in the ITA with respect to income from a business. Answer: 6) List three reserves that can be claimed with respect to a business for income tax purposes. Answer: 7) Compare the general process used to determine doubtful debts for accounting purposes with the process for income tax purposes. Answer: 8) The ability to claim a reserve for receivables (e.g. unpaid amounts) produces results that are similar to those that would arise if only cash sales were required to be included in business income. However, the ability to claim this type of reserve is restricted. Describe the restrictions. Answer: 9) ITA 18 lists a number of general limitations that affect what can be claimed as a deduction with respect to a business. Identify four of these limitations. Answer: Practice 10) Describe the income tax treatment that applies to interest and property tax on land. Answer: Chapter 06 11) Both employees and individuals carrying on a business as a sole proprietor can claim expenses for a home office. Is the income tax treatment the same? If not, describe the differences. Answer:

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5 What is a reserve Briefly explain the reserve system that is used in the ITA with respect to income from a business Answer A reserve is an amount set aside for a specific purpose or as a provision f... View the full answer