A Tax Placed on a Good That Is a Necessity

question 32

Multiple Choice

A tax placed on a good that is a necessity for consumers will likely generate a tax burden that

• A) falls more heavily on sellers.
• B) falls entirely on sellers.
• C) falls more heavily on buyers.
• D) is evenly distributed between buyers and sellers.

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Definitions:

Debit

An accounting entry that results in either an increase in assets or a decrease in liabilities or equity on a company's balance sheet.

Credit

An accounting entry that increases liabilities or equity or represents a decrease in assets, also refers to the provision of resources based on trust.

Owner's Capital

The amount of equity a proprietor has in the business, representing the difference between the business's assets and liabilities.