What Is the Best Explanation for This Journal Entry

question 195

Multiple Choice

What is the best explanation for this journal entry?

• A) Received cash for services performed.
• B) Received cash for services to be performed in the future.
• C) Paid cash in advance for services to be done.
• D) Paid cash for services to be performed.

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Definitions:

Tax Shifting

The transfer of the burden of a tax from the entity legally responsible for paying it to another party, often consumers, through higher prices.

Tax Evasion

The illegal practice of not paying taxes by not reporting income, reporting expenses not legally allowed, or by not paying taxes owed.

Corporate Profits Tax

A tax imposed on the income or profit earned by corporations.

Equilibrium

A state of balance or stability within a system, where all forces acting upon the system are equal and opposite, leading to no net change.