ACC 522 Chapter Notes - Chapter 1: Canadian Business, Cash Flow

• School: Ryerson University
• Department: Accounting
• Course: ACC 522
• Professor: Antoinette Vena

Document Summary

Acc 522 chapter 1 notes: taxation its role in decision making. Business enterprises and individuals are subject to many forms of taxation by municipal, provincial, and federal authorities. Most significant form of taxation affecting roi is income tax at both federal and provincial level. By its nature, it taxes more heavily those enterprises that are more successful in maximizing profits. Investor"s roi is measured by the cash flow returned after the payment of all related taxes. Cash flow exists only on an after-tax basis; therefore, every decision necessarily has a tax impact. Whether or not the ultimate result of the decision is successful. Two important principles must be adhered to when applying taxation to financial decision- making: (1) tax should be considered a controllable cost and (2) cash flow exists on an after-tax. Tax cost should be regarded as a cost of doing business similar to other relevant costs. Provincial income tax rates vary considerably among provinces.