Which of the Following Is True Regarding Use Taxes

question 84

Multiple Choice

Which of the following is True regarding use taxes?

• A) A use tax is relatively easy to enforce compared to a sales tax.
• B) Use taxes attempt to eliminate any tax advantage of purchasing goods out of state.
• C) Use taxes encourage taxpayers to buy goods out of state to avoid paying sales tax in their home state.
• D) A use tax is generally a progressive tax.
• E) None of the choices are correct.

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Definitions:

Work in Process Inventory

Inventory that includes all materials and components currently being used in the production of final products but are not fully assembled.

Process Costing System

An accounting system used to ascertain the cost of a product at each process or stage of manufacturing, suitable for industries producing homogeneous products.

Accounts Receivable

Money owed to a company by its customers for products or services that have been delivered but not yet paid for.

Finished Goods Inventory

The value of a company's completed products ready for sale but not yet sold.