Tax Avoidance Can Be Flagrant and Very Intentional, but Entrepreneurs

question 66

Multiple Choice

Tax avoidance can be flagrant and very intentional, but entrepreneurs often come up short on their tax commitments because of a single-minded focus on their product or service and _____.

• A) casual accounting system.
• B) low-cost accounting software.
• C) incompetent in-house accountant.
• D) cash-basis accounting system.

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Definitions:

Fixed Costs

Expenses that do not change with the level of goods or services produced by the business over the short term.

Product Cost Concept

The accounting principle that determines the cost of a product by adding the costs of raw materials, labor, and overhead incurred in its production.

Rate of Return

The increase or decrease in the value of an investment during a certain timeframe, represented as a percentage of the original investment's cost.

Markup Percentage

The percentage added to the cost of goods to cover overhead and profit, determining the selling price.