Which of the Following Is a Valid Reason for Establishing

question 7

Multiple Choice

Which of the following is a valid reason for establishing a tax agency fund and charging a collection fee to other governments?

• A) To help eliminate a General Fund deficit.
• B) To increase the total amount of taxes levied.
• C) To avoid overlapping taxes.
• D) To realize administrative efficiencies from centralizing tax billing and collection activities.

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Definitions:

Indirect Method

A way of reporting cash flows from operating activities in the cash flow statement by adjusting net income for changes in non-cash accounts.

Comparative Balance Sheet

A comparative balance sheet presents the financial position of a company at different points in time side by side, to analyze trends or changes in financial status.

Net Loss

Net loss refers to the result when a company's total expenses exceed its total revenues during a specific period, indicating a negative profitability.

General Ledger

A complete record of all the financial transactions over the lifetime of a company, serving as the primary source of accounting data.