There Is a Difference Between Who Is Legally Required to Send

question 48

Multiple Choice

There is a difference between who is legally required to send a tax payment to the government and who bears the burden of the tax. Which of the following would have the most impact on who bears the burden of an excise tax?

• A) whether the tax is imposed by the federal government or a state government
• B) whether the tax is based on the ability-to-pay principle or the benefits-received principle
• C) The motive for the tax. If the tax is designed to raise revenue, more of the burden will fall on firms. If the tax is designed to achieve a social objective (for example, to discourage smoking) more of the burden will fall on consumers.
• D) the elasticity of demand for the item that is taxed

Analyze the benefits and drawbacks of leasing from a cash flow perspective.

Understand how various tax rates (lessee vs. lessor) affect lease payments and incentives.

Recognize the characteristics and implications of different types of leases (operating, financial, combination).

Understand the impact of off-balance sheet financing on a company's perceived risk.

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Definitions:

Gross Profit

The difference between sales revenue and the cost of goods sold, indicating the efficiency of a company in managing its production and supply chain.

Chief Executive Officer

The highest-ranking executive in a company, responsible for making major corporate decisions, managing overall operations, and resources.

Financial Statements

Financial statements are formal records of the financial activities and position of a business, person, or entity, providing an overview of a financial situation over a specific period.

Physical Existence

The actual, tangible presence of an asset, as opposed to intangible assets or rights.