Q5) Which of the following deductions is disallowed for tax purposes?

1) An employer's contribution to an RPP

2) The expense of issuing shares

3) A deduction for capital expenditures

4) Convention expenses

Q6) If an expense is not specifically addressed in the Act, it is usually deductible for tax purposes if the expense is:

1) Incurred in Canada.

2) Capital expenditure.

3) Deductible using generally accepted accounting principles.

4) Immaterial.

Q7) The ITA prohibits deduction of prepaid expenses in the year of outlay. Expenses that are NOT treated in this manner are:

1) Payments for insurance in respect of a period after the end of the year.

2) Payments of interest, taxes, rent, or royalties in respect of a period after the end of the year.

3) Deduction of an expense for goods received but not paid for by the company until after the end of the year.

4) Payments for services to be rendered after the end of the year.