18 Canadian tax & accounting terms starting with C
Plain-language definitions, each with the CRA rule it comes from and the filings it affects.
Canada Pension Plan (CPP)
The Canada Pension Plan is a mandatory contributory pension: employees and employers each contribute on earnings, and the self-employed pay both shares, funding a retirement pension.
Canadian-Controlled Private Corporation (CCPC)
A CCPC is a private corporation resident in Canada that is not controlled by non-residents or public companies, and it qualifies for valuable tax advantages.
Capital Cost Allowance (CCA)
Capital cost allowance is the tax deduction that lets you write off the cost of business assets over several years instead of all at once, at rates set by asset class.
Capital Dividend Account (CDA)
The capital dividend account is a notional tax account that lets a private corporation pay out certain amounts, mainly the tax-free half of capital gains, to shareholders completely tax-free.
Capital Expenditure (CapEx)
A capital expenditure is money spent to acquire or improve a long-lived asset, capitalised and depreciated over time rather than expensed immediately.
Capital Gain
A capital gain is the profit from selling a capital asset, such as shares, real estate or a business, for more than its adjusted cost base.
Capital Loss
A capital loss occurs when you sell a capital property for less than its adjusted cost base, and it can be used to offset capital gains but generally not other income.
Cash Flow
Cash flow is the movement of money into and out of your business over a period, and it determines whether you can actually pay your bills, regardless of profit.
Chart of Accounts
A chart of accounts is the organised list of every account a business uses to record transactions, grouped into assets, liabilities, equity, revenue and expenses.
Clearance Certificate
A clearance certificate is CRA confirmation that a deceased person's or a business's taxes are paid, protecting the legal representative from personal liability before distributing assets.
Collateral
Collateral is an asset a borrower pledges to a lender as security for a loan, which the lender can seize if the borrower defaults.
Contra Account
A contra account is an account that offsets another account, carrying an opposite balance to reduce the gross value of a related asset, liability or revenue.
Corporate Bylaws
Corporate bylaws are the internal rules a corporation adopts to govern how it operates, covering directors, officers, meetings, and decision-making procedures.
Corporate Tax
Corporate tax is the income tax a corporation pays on its profits, at combined federal and provincial rates, reported annually on the T2 return.
Cost of Goods Sold (COGS)
Cost of goods sold is the direct cost of producing or purchasing the goods a business sold in a period, subtracted from revenue to calculate gross profit.
CRA Audit
A CRA audit is a systematic examination of a taxpayer's books and records to verify that income, deductions and credits were reported correctly.
Credit Note
A credit note is a document a seller issues to reduce or reverse a previously issued invoice, for returns, overcharges or discounts, adjusting the amount owed and any tax.
Current Ratio
The current ratio measures short-term liquidity by dividing current assets by current liabilities, showing whether a business can cover its near-term obligations.
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