A Tax Levied on the Purchase of a Specific Good

question 140

Multiple Choice

A tax levied on the purchase of a specific good or service is

• A) an excise tax.
• B) a consumption tax.
• C) a purchase tax.
• D) a value tax.

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Definitions:

Useful Life

The estimated period a fixed asset is expected to be usable for its intended purpose, important for depreciation calculations.

Residual Value

The estimated remaining value of an asset at the end of its useful life, often considered for depreciation calculations and lease contracts.

Depreciation

The accounting process of allocating the cost of a tangible asset over its useful life, reflecting wear and tear, decay, or decline in value.

Book Value

The book value represents the value of an asset according to its balance sheet account balance, taking into account the cost of the asset minus any depreciation.