Statement 1: The distinction of a tax from permit or license fee is that a tax is imposed for regulation. Statement 2 Non-payment of tax does not neoessarily render a business ilegal. a Only statement 1 is correct b. Only statement 2 is correct C. Both statements are correct d. Both statements are incorect
Statement 1: The distinction of a tax from permit or license fee is that a tax is imposed for regulation. Statement 2 Non-payment of tax does not neoessarily render a business ilegal. a Only statement 1 is correct b. Only statement 2 is correct C. Both statements are correct d. Both statements are incorect
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Stalement 1: The distinction of a tax from permit or license fee is that
a tax is imposed for regulation.
Statement 2 Non-payment of tax does not necessarily render a
business ilegal.
a. Only statement 1 is correct
b. Only statement 2 is correct
C. Both statements are correct
d. Both statements are incorect
The primary purpose of taxation is to raise revenue for the support of
the government. However, taxation is often employed as a devise for
regulation by means of which, certain effects or conditions envisioned
by the government may be achieved such as:
a. Taxation may be used to provide incentive to greater production
through grant of tax exemptions.
b. Taxation can strengthen weak enterprises by creating conditions
conducive to their growth through grant of tax exemptions.
c. Taxes may be increased in periods of prosperity to curb spending
power and halt inflation or lowered in periods of slump to expand
business and ward off depression.
All of the ahove
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