SOLUTION MANUAL FOR
Psychology Around Us, 4th Canadian Edition Michael Boyes, Nancy Ogden, Elizabeth
Gould, Ronald Comer, Evelyn Field
Chapter 1-16
CHAPTER 1
PSYCHOLOGY: YESTERDAY AND TODAY
CHAPTER LEARNING OBJECTIVES
taxation.---### Overview of Business Entities#### 1. Types of Business EntitiesBusiness entities can be categorized based on ownership st ructure and tax treatment. Understanding these types is crucial for determining tax
obligations and benefits.- **Sole Proprietorships**: - Owned by a single individual, this is the simplest form of business entity. Income is reported on the owner’s personal tax re turn (Form 1040, Schedule C), which simplifies tax
filing but also means personal liability for debts and obligations.- **Partnerships**: - Consisting of two or more individuals, partnerships do not pay federal income taxes. Instead, they are considered pass -through entities, meaning
income is taxed at the partners' individual rates. Form 1065 is used to report partnership income, while partners receive Schedule K-1 to report their share on their returns.- **Corporations**: - Corporations are separate legal
entities that provide limited liability protection to their owners (shareholders). C-Corporations face double taxation: once at the corporate level on profits and again at the individual level when dividends are distributed. S -
Corporations, on the other hand, are pass-through entities but have restrictions on ownership and number of shareholders.- **Limited Liability Companies (LLCs)**: - LLCs combine the flexibility of partnerships with the liability
protection of corporations. An LLC can choose to be taxed as a sole proprietorship, partnership, or corporation, allowing for strategic tax planning. ### 2. Tax Implications of Each Entity TypeUnderstanding the tax implications of
each entity type is critical for effective business planning.- **Sole Proprietorships**: - Income is taxed at the owner’s individual tax rate. All profits and losses are reported on the owner’s tax return. This simplicity, however, can
expose owners to significant personal risk.- **Partnerships**: - Each partner reports their share of income and losses on their personal returns, allowing for loss deductions. Partners are a lso subject to self-employment taxes on
their share of the income, which can significantly impact tax liability.- **Corporations**: - C-Corporations are taxed at the corporate tax rate (currently 21%). Dividends are taxed again at the shareholder level. S -Corporations avoid
double taxation, but there are restrictions on the number and type of shareholders.- **Limited Liability Companies (LLCs)**: - By default, single-member LLCs are treated as sole proprietorships for tax purposes, while multi-member
LLCs are treated as partnerships. However, they can elect to be taxed as a corporation if beneficial.### Key Tax Concepts#### 1. Income RecognitionIncome recognition is a fundamental principle in taxation, determining when
income must be reported.- **Cash vs. Accrual Accounting**: - Businesses can choose between cash and accrual methods. Cash accounting recognizes income when received and expenses when paid, making it straightforward.
Accrual accounting recognizes income when earned and expenses when incurred, aligning revenue with the period it relates to, but can complicate cash flow management.#### 2. DeductionsDeductions reduce taxable income,
directly impacting tax liability.- **Ordinary and Necessary Expenses**: - The IRS allows deductions for expenses that are ordinary (common in the industry) and necessary (helpful and appropriate for the business). Common
deductions include rent, utilities, salaries, and professional fees.- **Limits on Deductions**: - Certain expenses, such as meals and entertainment, have specific limits (e.g., meals are typically only 50% deductible). Understanding
these limits is vital for effective tax planning.#### 3. Tax CreditsTax credits directly reduce the tax liability, providing a dollar-for-dollar reduction of taxes owed.- **Types of Tax Credits**: - Examples include the Research and
Development (R&D) tax credit, which encourages innovation, and the Work Opportunity Tax Credit (WOTC) for hiring individuals from certain target groups.### Specific Business Entity
Define psychology and describe the goals and levels of analysis psychologists use.
Psychology is the study of mental processes and behaviour.
The goals of psychology are to describe, explain, predict, and control behaviour and mental
processes. Psychologists vary in the degree to which they focus on some of these goals more
than others.
The study of psychology must occur at multiple levels, including the level of the brain (the biological
activity associated with mental processes and behaviour), the level of the person (thecontent of
mental processes), and the level of the group (social influences on behaviour).
Describe the influences of early myths and ancient Greek philosophies on psychology.
Early explanations of human behaviour were rooted in superstition and magic.
Later, philosophers, beginning with the ancient Greeks, tried to develop more objective theoriesof
human consciousness and reality.
The work of such early philosophers as Hippocrates, Socrates, Plato, and Aristotle contributedto
the later formation of psychology as a natural science.
Name important early psychologists and describe their major theories and research
methods.
The development of psychology has been strongly influenced by shifts in the social environment and
development of new technology.
The first psychology laboratory was founded in Leipzig, Germany, by physiologist Wilhelm Wundt.
Wundt was interested in human consciousness and will, which he studied through small,
structured activities that could be easily watched and replicated.
Structuralism, a school of thought developed by one of Wundt‘s students, relied upon the use of
introspection, the careful observation of human perception. The goal of the structuralists was to
find the smallest building blocks of consciousness.
William James established the first psychology laboratory in the United States at Harvard. He
helped shift the field‘s focus to the functions of mental events and behaviours, forming a school
of thought known as functionalism.
Gestalt psychologists studied human tendencies to perceive pattern rather than dividing
consciousness into its smallest parts. They focused on putting together the ―parts,‖ or individual
, sensations, to create a ―whole‖ or perception that went beyond the sum of the parts.
Summarize the major principles of the psychoanalytical, behaviourist, humanistic,
cognitive, and neuroscience approaches to psychology.
Over the years, different fields of psychology emerged, with different ideas about what was the
appropriate area of study for human psychology. Some of the most influential fields were the
psychoanalytic, behaviourist, humanistic, cognitive, and neuroscience schools of thought.
Sigmund Freud‘s psychoanalytical theory focused on the importance of unconscious mental
processes.
Behaviourists believed strongly that psychology should restrict its focus to the careful study of
observable behaviours.
Humanistic psychologists reacted against the mechanical portrayals of people by the
behaviourists and emphasized individuals‘ potential for growth and self-actualization.
Cognitive psychologists reignited interest in the study of mental processes, comparing the
workings of the mind to the workings of computers.
Biological science, including interest in the workings of the brain and in our genetic inheritance, was
the major influence on neuroscience approaches.
taxation.---### Overview of Business Entities#### 1. Types of Business EntitiesBusiness entities can be categorized based on ownership st ructure and tax treatment. Understanding these types is crucial for determining
tax obligations and benefits.- **Sole Proprietorships**: - Owned by a single individual, this is the simplest form of business entity. Income is reported on the owner’s personal tax re turn (Form 1040, Schedule
C), which simplifies tax filing but also means personal liability for debts and obligations.- **Partnerships**: - Consisting of two or more individuals, partnerships do not pay federal income taxes. Instead, they
are considered pass-through entities, meaning income is taxed at the partners' individual rates. Form 1065 is used to report partnership income, while partners receive Schedule K-1 to report their share on
their returns.- **Corporations**: - Corporations are separate legal entities that provide limited liability protection to their owners (shareholders). C-Corporations face double taxation: once at the corporate level
on profits and again at the individual level when dividends are distributed. S -Corporations, on the other hand, are pass-through entities but have restrictions on ownership and number of shareholders.-
**Limited Liability Companies (LLCs)**: - LLCs combine the flexibility of partnerships with the liability protection of corporations. An LLC can choose to be taxed as a sole proprietorship, partnership, or
corporation, allowing for strategic tax planning. ### 2. Tax Implications of Each Entity TypeUnderstanding the tax implications of each entity type is critical for effective business planning. - **Sole
Proprietorships**: - Income is taxed at the owner’s individual tax rate. All profits and losses are reported on the owner’s tax return. This simplicity, however, can expose owners to significant personal risk.-
**Partnerships**: - Each partner reports their share of income and losses on their personal returns, allowing for loss deductions. Partners are a lso subject to self-employment taxes on their share of the income,
which can significantly impact tax liability.- **Corporations**: - C-Corporations are taxed at the corporate tax rate (currently 21%). Dividends are taxed again at the shareholder level. S -Corporations avoid
double taxation, but there are restrictions on the number and type of shareholders.- **Limited Liability Companies (LLCs)**: - By default, single-member LLCs are treated as sole proprietorships for tax
purposes, while multi-member LLCs are treated as partnerships. However, they can elect to be taxed as a corporation if beneficial.### Key Tax Concepts#### 1. Income RecognitionIncome recognition is a
fundamental principle in taxation, determining when income must be reported.- **Cash vs. Accrual Accounting**: - Businesses can choose between cash and accrual methods. Cash accounting recognizes
income when received and expenses when paid, making it straightforward. Accrual accounting recognizes income when earned and expenses when incurred, aligning revenue with the period it relates to, but
can complicate cash flow management.#### 2. DeductionsDeductions reduce taxable income, directly impacting tax liability. - **Ordinary and Necessary Expenses**: - The IRS allows deductions for expenses
that are ordinary (common in the industry) and necessary (helpful and appropriate for the business). Common deductions include rent, utilities, salaries, and professional fees.- **Limits on Deductions**: -
Certain expenses, such as meals and entertainment, have specific limits (e.g., meals are typically only 50% deductible). Understanding these limits is vital for effective tax planning.#### 3. Tax CreditsTax
credits directly reduce the tax liability, providing a dollar-for-dollar reduction of taxes owed.- **Types of Tax Credits**: - Examples include the Research and Development (R&D) tax credit, which encourages
innovation, and the Work Opportunity Tax Credit (WOTC) for hiring individuals from certain target groups.### Specific Busines s Entity
Describe the three major branches of psychology and summarize key trends in
psychology.
The theoretical and cultural diversity of the field of psychology has increased dramatically over
recent years.
There are three key branches of psychology: academic, applied, and clinical/counselling.
Across the three branches and many specialty areas in psychology, psychologists are united by their
shared values. Psychologists generally agree that psychology is theory-driven, empirical,
multi-level, and contextual.
Currently, psychology appears to be developing as a science in response to a growing diversity
throughout the field, advances in technology (such as brain scanning), and the development of
new schools such as positive psychology.
, RUE-FALSE STATEMENTS
Mental processes describe the activity of our brains when we are engaged in thinking.
Answer: True
Difficulty: Easy
Bloomcode: Knowledge
Learning Objective: Define psychology and describe the goals and levels of analysis psychologists
use.
Section Reference: What Is Psychology?
The person level of analysis may include how intelligence or motivation influences behaviour.
Answer: True
Difficulty: Easy
Bloomcode: Knowledge
Learning Objective: Define psychology and describe the goals and levels of analysis psychologists
use.
Section Reference: What Is Psychology?
The history of psychology (and most other sciences) drew heavily on philosophy.
Answer: True
Difficulty: Easy
Bloomcode: Knowledge
Learning Objective: Describe the influences of early myths and ancient Greek philosophies on
psychology.
Section Reference: Psychology‘s Roots in Philosophy
Socrates believed that ―truth‖ is an objective concept that is NOT dependent on perception.
Answer: False
Difficulty: Easy
Bloomcode: Comprehension
Learning Objective: Describe the influences of early myths and ancient Greek philosophies on
psychology.
Section Reference: Psychology‘s Roots in Philosophy
Darwin argued that dihybrid crossing was responsible for the characteristics that survive in a
population.
Answer: False
, Difficulty: Easy
Bloomcode: Knowledge
Learning Objective: Name important early psychologists and describe their major theories and
research methods.
Section Reference: The Early Days of Psychology
Voluntarism focused on the belief that a person‘s free will ultimately determines human behaviour.
Answer: True
Difficulty: Easy
Bloomcode: Comprehension
Learning Objective: Name important early psychologists and describe their major theories and
research methods.
Section Reference: The Early Days of Psychology
Functionalists viewed the mind as an ever-changing stream of mental events that respond to
changing environments.
Answer: True
Difficulty: Easy
Bloomcode: Comprehension
Learning Objective: Name important early psychologists and describe their major theories and
research methods.
Section Reference: The Early Days of Psychology
Gestalt psychology is named after the German psychologist, Ernst Gestalt, who coined the term.
Answer: False
Difficulty: Easy
Bloomcode: Knowledge
Learning Objective: Name important early psychologists and describe their major theories and
research methods.
Section Reference: The Early Days of Psychology
Wundt believed that the unconscious mind, rather than the conscious mind, was instrumental in
predicting behaviour.
Answer: False
Difficulty: Easy
Bloomcode: Comprehension
Learning Objective: Summarize the major principles of the psychoanalytical, behaviourist,
humanistic, cognitive, and neuroscience approaches to psychology.
Section Reference: Twentieth-Century Approaches
Jasmine is a psychiatrist specializing in childhood trauma. She believes that childhood events
