Which of the following statements regarding the relationship between amortization and income taxes is true?

Question

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Canada Revenue Agency (CRA) specifies the maximum Capital Cost Allowance (CCA) rate, which is essentially the maximum amortization rate a taxpayer may use for different classes of assets for income tax purposes. This rate varies by asset class and is not the same for all capital assets, nor does it require the use of the same amortization method for both tax reporting and financial accounting purposes. Most companies do not use straight-line amortization for tax purposes; instead, they use the CCA rates specified by the CRA.

Which of the Following Statements Regarding the Relationship Between Amortization