An Excise Tax I.is Levied on the Value of Property

question 55

Multiple Choice

An excise tax
I.is levied on the value of property.
II.is levied on the quantity of the product or service.
III.differs from an sale tax, because a sales tax is imposed on the value of property.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Statements I and II are correct.
• D)Statements II and III are correct.
• E)Statements I, II, and III are correct.

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Definitions:

Allowance for Doubtful Accounts

A contra-asset account that reduces the total amount of accounts receivable to reflect those that are expected to go uncollected.

Uncollectible

Accounts receivable that cannot be recovered or are very unlikely to be paid by debtors.

Income Statement Approach

An analytic method focusing on revenues and expenses to determine the net income of a business within a specific period.

Net Credit Sales

The total revenue from sales made on credit, minus any returns or allowances.