If Revenue from a Gasoline Tax Is Used to Build

question 188

Multiple Choice

If revenue from a gasoline tax is used to build and maintain public roads, the gasoline tax may be justified on the basis of

• A)the benefits principle.
• B)the ability-to-pay principle.
• C)vertical equity.
• D)horizontal equity.

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Definitions:

Estimated Warranty Liability

A provision on the balance sheet to cover the expected costs of product warranties, predicting future expenses from warranties on products sold.

Sales

Sales refer to the total revenue a company generates from selling goods or services over a certain period, critical for assessing a company's performance and growth.

Deferred Income Tax Liability

A tax obligation due in the future for income that has been recognized in the financial statements before it is taxable.

Income Tax Expense

The cost to a company for its taxable income, calculated according to the applicable tax laws governing the period.