Which of the Following Might Logically Be Reasons Used in Support

question 11

Multiple Choice

Which of the following might logically be reasons used in support of a value added tax for the federal government?

• A) Improve separation of revenue sources across the levels of government federal, state, and local).
• B) Provide an increased economic incentive for private saving.
• C) Increase the responsiveness of the federal tax base to changes in the natural economic activity.
• D) Improve progressivity of the federal revenue system.

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Definitions:

Accounting Methods

The rules and guidelines used by businesses to keep financial records and prepare financial statements, including accrual and cash basis accounting.

Comparable Data

Data that is similar in nature and allows for comparison between different data sets or time periods.

Reporting Unusual Items

The practice of separately reporting significant financial transactions or events that are not typical of the business's regular operations, to provide clarity in financial statements.

Income Statement

A financial report that summarizes a company's revenues, expenses, and profits/losses over a specific period of time.