When a Business Collects GST from Customers, It Records

question 16

Multiple Choice

When a business collects GST from customers, it records:

• A) a contra asset.
• B) a liability.
• C) an expense.
• D) an asset.

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed. The government sets the rate, which can apply to income, capital gains, or other financial figures.

Straight-Line Depreciation

A procedure for assigning the cost of a solid asset over its productive lifetime in equal annual figures.

Marginal Tax Rates

The rate at which an individual or corporation's next dollar of taxable income is taxed.

Pre-Tax Loan Rate

The interest rate on a loan before taking into account any tax deductions that might apply.