Suppose That Accountants Increase the Price for Calculating Income Taxes

question 48

Multiple Choice

Suppose that accountants increase the price for calculating income taxes owed by 20 percent. The short-run demand for their service is less elastic than the long-run demand because in the long run consumers will

• A) spend less on this service.
• B) experience an increase in income.
• C) try to avoid paying their income tax.
• D) find other ways to calculate the income tax they must pay.

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Definitions:

Cash Receipts

Money received by a business, often recorded in the period it is received.

Cash Sales

Revenue received from transactions where payment is made immediately in cash.

Collections

The process of pursuing and receiving payments on outstanding accounts receivable from customers.

Payments

The act of transferring money or money's worth from one party to another as a settlement for a transaction or an obligation.