Assume That a Product Has the Following Three Stages of Production

question 28

Multiple Choice

Assume that a product has the following three stages of production: $$\begin{array} { c c } \text { Production } & \text { Selling } \\\text { Stage } & \text { Price } \\\hline 1 & € 1,000 \\2 & € 2,000 \\3 & € 3,000\end{array}$$ If the value-added tax (VAT) rate is 20%,what would be the VAT over all stages of production?

• A)€150
• B)€600
• C)€150.0
• D)€225

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Definitions:

Adjusting Entries

Journal entries made at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Adjusted Trial Balance

A list of all account titles and balances after adjusting entries have been made, serving as a check before preparing financial statements.

Partial Worksheet

A preliminary financial document used internally to prepare for the completion of the full financial statements.

Adjusted Trial Balance

A statement that lists all the accounts and their balances after adjusting entries are made, used to prepare financial statements.