EGR Just Completed Its First Year End

question 63

Multiple Choice

EGR just completed its first year end.During the year, EGR recorded $12,000 in depreciation ($18,500 CCA) .In addition there was a deduction in the accounting records for meals and entertainment amounting to $6,000.As a result taxable income will:

• A)be lower than accounting income by $5,500.
• B)be higher than accounting income by $500.
• C)be equal to accounting income.
• D)be higher than accounting income by $5,500.
• E)be lower than accounting income by $500.

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Definitions:

Post-secondary

Relating to education after high school, including college, university, and vocational or technical training.

Compounded

The process where interest earned on an investment is reinvested to earn additional interest over time.

Nominal Rate

The advertised or stated interest rate of an investment or loan, not accounting for compounding or inflation.

Endowment

An endowment is a financial asset, in the form of money or property, donated to institutions or individuals, typically used for a specific purpose like a scholarship fund.