Which of the Following Is Not True About CCA Expense

question 110

Multiple Choice

Which of the following is not true about CCA expense?

• A) It is sometimes called a tax shield.
• B) It usually causes an increase in taxes.
• C) Businesses usually want the largest possible CCA deduction.
• D) The expense deduction results from a cash expenditure.

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Definitions:

Sales

The total amount of goods or services sold by a company, serving as a primary source of revenue.

Net Income

A company's overall earnings following the deduction of all expenses and taxes from its gross income.

Average Collection Period

The average number of days it takes for a company to collect receivables from its customers, indicating the efficiency of its credit policies.

Discount Period

The time frame in which a buyer can pay less than the full amount due on an invoice if payment is made promptly, incentivizing early payment.