SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN: 9780357391266
Author: Nellen
Publisher: Cengage
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14) When examining revenue transactions, which of the following transactions is classified as an exchange transaction?
A) When a homeowner pays property taxes
B) When a university receives a federal grant that mandates a certain type of research activity
C) When an aquatic center receives cash for a group swim
D) When an employer deducts money for state tax withholding
Choose the best answer from the four choices
Assuming that a government will collect its sales taxes in sufficient time to satisfy the “available” criterion, it would ordinarily recognize revenue from sales taxes in its governmental fund statements
When the underlying sales transaction takes place
On the date the merchant must remit the taxes to the government
On the date the merchant must file a tax return
When the taxes are received by the government
Assuming that a government will collect its sales taxes in sufficient time to satisfy the “available” criterion, it would ordinarily recognize revenue from sales taxes in its government‐wide statements
When the underlying sales transaction takes place
On the date the merchant must remit the taxes to the government
On the date the merchant must file a tax return
When the taxes are received by the government
A local politician claimed, “to reduce the government’sdeficit, it’s time we require companies to start payingtheir deferred income tax liabilities.” Explain to thepolitician what deferred income taxes represent and whythey should not be viewed as accounts payable to thegovernment.
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