Which Statement Regarding the Tax System Is True

question 76

Multiple Choice

Which statement regarding the tax system is true?

• A)For small Canadian-controlled private corporations, income less than $400,000 is exempt from taxes. Thus, government receives no tax revenue from these businesses.
• B)All businesses, regardless of their legal form of organization, are taxed by the Canada Revenue Agency (CRA).
• C)Corporate income taxes are influenced by the size and location of the companies and their income types.
• D)All corporations other than nonprofit corporations are subject to corporate income taxes, which are 26.5% for the lowest amounts of income and 32.5% for the highest amounts of income.

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Definitions:

Percentage-Of-Completion Method

An accounting technique used in long-term contracts, recognizing revenue and expenses based on the project's estimated completion level.

Revenue

The total income generated from normal business operations and before any costs or expenses are deducted.

Progress Payments

Payments made on a contract in advance of the final delivery, typically based on the completion of certain stages or milestones within the project.

Critical Event

A significant occurrence or turning point that has the potential to affect the operation, stability, or outcome of a process, project, or situation.