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    Economic incidence of tax; prepayment of interest

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    True and False

    1. The person who pays a tax directly to the government bears the economic incidence of the tax.

    2. A cash basis taxpayer must account for any prepayment of interest expense under the accrual method.

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    https://brainmass.com/business/accounting/economic-incidence-tax-prepayment-interest-245276

    Solution Preview

    1. The person who pays a tax directly to the government bears the economic incidence of the tax.

    Not necessarily true. Example is that you buy a new shirt at the store and pay the sales tax as part of the total purchase ...

    Solution Summary

    In two short paragraphs, each question is fully explained together with a true false answer.

    $2.19

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