The charge added to a purchase by the government is called a ()

• A. Tax
• B. Tip
• C. Fee
• D. Duty

Answer: (A)

At its heart, this item tests understanding of government charges on purchases. The term for a compulsory payment added to goods or services by the government is tax. Taxes collected at the point of sale, such as sales tax or value-added tax, fund public services and infrastructure. The other options refer to different kinds of charges: a tip is an optional gratuity for service; a fee is a charge for a specific service or access; a duty is a tax on goods moving across borders or on certain regulated items. Because a purchase typically involves a general, government-imposed charge that contributes to public revenue, tax is the most appropriate term.