Free F1 Financial Reporting Exam Braindumps (page: 11)

Page 11 of 49

Which of the following is NOT a feature of a multi-stage sales tax?

  1. The entire tax burden is usually passed to the final consumer.
  2. Tax is charged each time a product is sold in the chain from manufacturer through to retailer.
  3. Tax is applied at the retail level only and not at production level.
  4. Credit may not be allowed for taxes paid on sales within the chain from manufacturer through to retailer.

Answer(s): C



Why are excise duties an attractive method of raising tax for governments? Select TWO that apply.

  1. Low cost of collection compared to other forms of taxation.
  2. High yields from the tax.
  3. Encourages consumption of products such as alcohol.
  4. Popular form of tax for the tax payer as it can be reclaimed.
  5. Ensures that the tax levied on all taxpayers is the same irrespective of their spending habits.

Answer(s): A,B



Which of the following would NOT be assessed for tax under a Pay-As-You-Earn system?

  1. Profit-sharing payments received by an employee.
  2. Benefits in kind received by an employee.
  3. Commissions received by an employee.
  4. The wealth of an employee.

Answer(s): D



Which of the following is NOT a type of supply for value added tax (VAT)?

  1. Fixed
  2. Standard-rated
  3. Exempt
  4. Zero-rated

Answer(s): A



Page 11 of 49



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