6 Canadian tax & accounting terms starting with I
Plain-language definitions, each with the CRA rule it comes from and the filings it affects.
Income Statement
An income statement, or profit and loss statement, reports a business's revenue and expenses over a period, ending in net profit or loss.
Incorporation
Incorporation is the legal process of forming a corporation, a separate legal entity from its owners, giving limited liability and access to corporate tax rates.
Input Tax Credit (ITC)
An input tax credit is the GST/HST a registered business pays on its purchases, which it claims back so that it only remits tax on the value it adds.
Instalment
A tax instalment is a periodic prepayment of income tax made through the year, required when you owe more than a set threshold, rather than paying the whole amount at filing.
Inventory
Inventory is the goods a business holds for sale, or the materials it will turn into products, recorded as a current asset until sold.
Invoice
An invoice is a document a seller issues to a buyer requesting payment for goods or services, listing amounts, terms, and any GST/HST charged.
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