Which of the Following Will Have a Negative Effect on a Credit

question 54

Multiple Choice

Which of the following will have a negative effect on a credit history?

• A)Taking out a car loan with a ten year maturity
• B)Making as many purchases as possible with cash
• C)Never exceeding your credit limit on your credit card
• D)All these options would have a positive effect on credit history.

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Definitions:

Temporary Difference

Refers to differences between the carrying amount of an asset or liability in the balance sheet and its tax base that will result in taxable or deductible amounts in future periods.

Straight Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts.

Capital Cost Allowance

A tax deduction in Canada for the depreciation of tangible property.

Deferred Tax

A tax liability or asset that arises due to temporary differences between the book value and tax value of assets and liabilities.