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Common Accounting Acronyms and Forms

November 5, 2013

Tax Question:

Do you ever meet with your accountant and wonder if they are speaking the same language as you?


Accountants like acronyms, we even change form numbers into acronyms. This works great for us to shorten longer titles in our working papers and discussions but we often forget that the general population doesn’t follow our love for accounting lingo.


We have put together the following list of commonly used acronyms and forms that will hopefully help familiarize you with some of the accounting lingoes the next time you meet your accountant.

  • CRA – Canada Revenue Agency, although this may be rather intuitive we do often get folks asking for us to describe this one.
  • NTR – Notice to Reader, may also refer to a compilation engagement. This is a common level of financial statement engagement that accountants prepare for clients that do not offer opinions or assurance but provides a base for preparing corporate tax returns.
  • GAAP – Generally Accepted Accounting Principles, the framework of guidelines for preparing financial statement information that accountants follow. It is basically a rule book.
  • GRIP – General Rate Income Pool, this is where your corporation’s high rate tax is pooled, amounts in this tax pool can be paid out of the corporation via eligible dividends to the shareholders which are taxed at a lower rate than regular dividends.
  • CDA – Capital Dividend Account, this is where a portion of your corporation’s capital gains and other specific items are pooled, amounts can be paid out of this tax pool by way of a tax-free dividend to the shareholders.
  • RDTOH – Refundable Dividend Tax On Hand, this arises when corporations report investment income such as interest or dividends and can be refunded when the corporation issues regular dividends to the shareholders at $1 to $3 ratio (each dollar of RDTOH requires a $3 dividend to be fully refunded).
  • T2 – Corporate tax return, this is the annual income tax return your corporation must file.
  • T4/5 – slips used to report employment or dividend income each year.
  • RC59 – Business consent form, a CRA form that allows your accountant (or other individuals/firm) to communicate with CRA on behalf of your corporation.

If you would like more information on this topic, please contact a member of the Empire CPA team by filling out the contact form below.

Canadian and foreign tax laws are complex and have a tendency to change on a frequent basis. As such, the content published above is believed to be accurate as of the date of this post. Before implementing any tax planning, please seek professional advice from a qualified tax professional. Empire, Chartered Professional Accountants will not accept any liability for any tax ramifications that may result from acting based on the information contained above.

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