Question

The Town of Valley View is located in Simpson County. The county property tax levy for 2017 is $1.5 million of which $1.3 million is expected to be collected. This levy includes $900,000 of taxes for the Town of Valley View which $875,000 is expected to be collected. The Tax Agency entry to record the Town of Valley View's levy includes a credit to:Choose the correct answer.1. Due to Other Governments for $875,000.2. Revenues Control for $900,000.3. Due to Other Governments for $900,000.4. Revenues Control for $875,000.

Answer 1

Answer:

The answer is: 3) Due to Other Governments for $900,000.

Explanation:

The full record should be:

• Dr Taxes Receivable for Other Governments 900,000
• Cr Due to Other Governments 900,000

The total amount of the tax levy, and not just the expected amount to be collected, should be recorded as a receivable. The county collector is responsible for collecting (or attempting to collect) all taxes as billed.