HST Practice Test PDF

**True/False** **True/False** Indicate if the following statements are true or false by circling the correct response **Basic rules and general concepts** 1.An activity that involves making an exempt supply of real property is a commercial activity. False - commercial activity is activity that b...

**True/False** **True/False** Indicate if the following statements are true or false by circling the correct response **Basic rules and general concepts** 1.An activity that involves making an exempt supply of real property is a commercial activity. False - commercial activity is activity that being done with expectation of profit, nth to do with exempt supply of real property 2\. An activity that involves making a taxable supply of real property is a commercial activity. False 3\) In general, transaction taxes are easy to administer and collect. True 4\) One reason for using a single stage transaction tax as opposed to a multi-stage transaction tax is that it allows the government to accrue revenues at a faster pace. False- multi-stage allow faster, not single 5\. Zero-rated supplies are not considered to be taxable supplies. False True or False? **Registration** 6\) If a non-registrant has taxable supplies in excess of \$30,000 in a calendar quarter, The individual becomes a deemed registrant as of the first sale in that quarter that pushes the total over \$30,000. True 7\) When the quick method is used, input tax credits on capital expenditures are tracked and dealt with in the same manner as when the regular method is used. Ture - capital exp. has to track separately when quick method is used **Multiple choice questions** **Basic rules and general concepts** 1\) Which of the following is **[NOT]{.smallcaps}** a transaction tax? A\) The federal GST that is assessed in Alberta. B\) The provincial sales tax that is assessed in Manitoba. C\) The tax charged for spending a day in Banff National Park. D\) The toll assessed for driving on Highway 407 in Toronto. 2.ABC Ltd., a stationary manufacturer sells toner to Staples Ltd, an office supply dealership for \$1000 and charges appropriate taxes. Assuming both businesses operate in Manitoba, please indicate the correct amount of ITC that Staples Ltd could claim: 1.130 2.50 3.80 4.None of the above **Type of supplies** 3\) Which of the following statements related to fully taxable and zero-rated supplies in a participating province is correct? A\) Fully taxable supplies are taxed at the HST rate and zero-rated supplies are taxed at zero percent. Expenditures related to both types of supplies are eligible for ITCs. B\) Fully taxable supplies are taxed at the HST rate and zero-rated supplies are taxed at zero percent. ITCs are available on only expenditures related to fully taxable supplies. C\) Both types of supplies are taxed at the HST rate. ITCs are available on only expenditures related to fully taxable supplies. D\) Fully taxable supplies are taxed at the HST rate and zero-rated supplies are taxed at zero percent. ITCs are available on all expenditures related to fully taxable supplies and on only capital expenditures related to zero-related supplies. **Trade- in** 4\) George Black lives in Manitoba, a non-participating province that has an 7% provincial sales tax. During the current year, he purchases a new Lexus for \$82,000. He receives a trade in allowance of \$36,000 for his old vehicle. The GST/HST charged on his new vehicle would be equal to: A\) \$4,100. B\) \$2,300. - MB is GST+PST, not HST. so only 5% of GST, not PST req'd here C\) \$5,980. D\) \$10,660. 5\) Marvin\'s Rooms is a new business which started on January 1, 2021. Its sales during its first four quarters of operation were as follows: **[Quarter Sales]** 1 \$13,000 2 18,000 3 24,000 4 27,000 On what date will Marvin\'s Rooms have to begin collecting GST? - slide 26 A\) The date in the second quarter on which cumulative sales total \$30,000. B\) July 1, 2021. C\) August 1, 2021. D\) September 1, 2021. 6\) Elfassy Art Dealers is a new business which commenced January 1 of the current year. It had four sales on the following dates during its first year of operation: **[Quarter - Date Sales]** 1 - February 1 \$13,000 2 - May 1 5,000 3 - August 1 35,000 4 - November 1 27,000 On what date will Elfassy Art Dealers have to begin collecting GST/HST? A\) July 1. B\) August 1. -- C\) September 1. D\) November 1. 7.John Barker owns a repair shop in Ontario, a province that has a 13% HST rate. He has asked you to calculate the HST payable or refund for the first reporting period. Given the following information, what should the repair shop\'s HST payable or refund be? **[Amount Before HST]** Sales \$150,000 Equipment purchased 96,000 Supplies purchased 83,000 Wages paid 19,000 Rent paid 17,000 A\) A refund of \$8,450. B\) A payment of \$6,500. C\) A refund of \$3,770. 50) D\) A refund of \$5,980. - (150-96-83-17)\*0.13