Multiple Choice
Jeb earns $8 per hour. He receives a raise of 3.5%. How much is the amount of his raise per hour?
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1. Introduction to Accounting
Types of Accounting
Struggling with Financial Accounting?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
In the context of accounting, what is the total tax a person or business is required to pay called?
A
Tax deduction
B
Tax liability
C
Tax credit
D
Tax asset
Verified step by step guidance1
Understand the key terms: 'Tax liability' refers to the total amount of tax a person or business is legally obligated to pay to the government. It is calculated based on taxable income and applicable tax rates.
Differentiate between the options: 'Tax deduction' reduces taxable income, 'Tax credit' directly reduces the tax liability, and 'Tax asset' refers to a deferred tax benefit.
Identify the correct term: The total tax a person or business is required to pay is specifically referred to as 'Tax liability'.
Relate the concept to practical scenarios: For example, if a business earns taxable income, the tax liability is the amount owed to the tax authorities after applying tax rates and any credits or deductions.
Conclude: The correct answer to the question is 'Tax liability', as it directly represents the total tax obligation.
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