Severance Taxes, as a Source of State Revenues, Are Popular

question 27

Multiple Choice

Severance taxes, as a source of state revenues, are popular

• A)in states that have a lot of natural resources. They help keep income, property, and sales taxes relatively low and eventually those taxes are paid mostly by out-of-state users.
• B)with resource-rich states, but the rates are set by the national government.
• C)in states like Virginia and Washington, but they are unused in Alaska and Wyoming because the price of natural resources is constantly changing due to market conditions.
• D)because they exempt natives (in-staters)from the tax.

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Definitions:

Adjusting Entry

At the closure of an accounting period, entries are documented to attribute earnings and outlays to the span during which they genuinely happened.

Supplies Purchased

Represents the purchase of tangible goods or materials used in the production of goods or for the operation of the company.

Accrued Revenues

Accrued revenues are revenues that have been earned but not yet received in cash or recorded, representing assets on the balance sheet.

Balance Sheet

A financial statement that presents a company's financial position at a specific point in time, showing assets, liabilities, and equity.