Which of the Following Forms of Tax Does Not Directly

question 21

Multiple Choice

Which of the following forms of tax does not directly affect cash flows but rather only affects them via its effect on demand (except for the banking and finance industry) ?

• A)Fringe Benefits Tax (FBT)
• B)Capital Gains Tax (CGT)
• C)Goods and Services Tax (GST)
• D)Corporate Income Tax

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Definitions:

Bad Debt Expense

An estimated expense that represents the amount of receivables a company does not expect to collect due to customer defaults.

Allowance for Doubtful Accounts

A financial accounting provision representing the estimated amount of receivables that may not be collected.

Receivables

Amounts owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Accounts Receivable Turnover

A financial ratio that measures how effectively a company collects on its credit sales by dividing total credit sales by the average accounts receivable.