Which Statement About Sales Taxes Is Correct

question 27

Multiple Choice

Which statement about sales taxes is correct?

• A)The consumer is responsible for remitting the tax to the government.
• B)Taxes are uniformly applied to all sale transactions.
• C)Businesses can deduct the GST paid on their purchases from GST collected.
• D)The same products that are exempt from GST are exempt from PST.

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Definitions:

Average cost method

An inventory costing method where all costs of inventory are averaged out to determine the cost of goods sold and the ending inventory value.

Cost of merchandise sold

The entire expense directly tied to the production and sale of products in inventory that were sold during a specific period.

Year amount

An expression referring to the total amount or figures calculated over a year's period.

Average cost method

An inventory costing method where the cost of goods sold and ending inventory is calculated based on the average cost of all units available for sale during the period.