The correct answer is D. All of above.
An electronic credit ledger is a system that allows businesses to track their tax credits and debits. Businesses can use the electronic credit ledger to offset their tax liabilities, including output tax payable, interest payable, and penalty.
Output tax payable is the tax that businesses must pay on the goods and services they sell. Interest payable is the interest that businesses must pay on any outstanding tax debts. Penalty is the penalty that businesses must pay for late or non-payment of taxes.
Businesses can use the electronic credit ledger to offset their tax liabilities by transferring credits from the electronic credit ledger to the tax liability account. This can help businesses to reduce their tax liabilities and avoid penalties.
Here are some additional details about each option:
- Output tax payable is the tax that businesses must pay on the goods and services they sell. It is calculated by multiplying the sales price of the goods or services by the applicable sales tax rate.
- Interest payable is the interest that businesses must pay on any outstanding tax debts. The interest rate is usually based on the prime rate, plus a percentage.
- Penalty is the penalty that businesses must pay for late or non-payment of taxes. The penalty rate is usually based on the amount of tax that is owed.
I hope this information is helpful. Please let me know if you have any other questions.