Question

The town county anticipated that discount opportunities of up to $3,000 would be taken by their taxpayers. Which of the following statements accurately reflects the accounting for the anticipated discounts when the taxes are levied?

a) Deducted from tax revenues
b) Ignored in financial statements
c) Adjusted in the budget
d) Recorded as a liability

Answer 1

The accurate accounting for the anticipated discounts when the taxes are levied would be recorded as a liability.

Step-by-step explanation:

The accurate accounting for the anticipated discounts when the taxes are levied would be recorded as a liability. This means that the town county would create a liability on their financial statements for the potential discounts that taxpayers may take. By recording it as a liability, the town county acknowledges that it owes the taxpayers the discounts and will have to adjust their financial records accordingly.