Multiple Choice
In the context of financial accounting, what information would you expect to find about individuals who are described as 'credit risks'?
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1. Introduction to Accounting
Types of Accounting
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The following descriptions refer to taxes that are levied on the income or profits of individuals and businesses. What type of taxes are these?
A
Income taxes
B
Property taxes
C
Sales taxes
D
Excise taxes
Verified step by step guidance1
Understand the concept of income taxes: These are taxes imposed on the income or profits earned by individuals and businesses. They are typically calculated as a percentage of taxable income.
Review the definition of property taxes: These are taxes levied on the value of real estate or other property owned by individuals or businesses. They are not based on income or profits.
Examine sales taxes: These are taxes applied to the sale of goods and services, usually as a percentage of the purchase price. They are unrelated to income or profits.
Analyze excise taxes: These are taxes imposed on specific goods, such as alcohol, tobacco, or fuel, often included in the price of the product. They are not based on income or profits.
Conclude that the type of taxes described in the problem, which are levied on income or profits, are income taxes.
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