Use the Information Above to Answer the Following Question

question 40

Multiple Choice

Use the information above to answer the following question.Which of the following statements is true?

• A)The sales revenue is $2,500.
• B)The gross profit is $2,500.
• C)The cost of goods sold is $2,500.
• D)The net income is $2,500.

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Definitions:

Effective Federal Tax Rate

The average rate at which an individual or a corporation is taxed by the federal government, calculated by dividing the total tax paid by taxable income.

Tax-Deferred Retirement

Investment accounts, like 401(k)s or IRAs, that allow earnings to grow tax-free until funds are withdrawn, usually during retirement.

Flexible Spending Account

A type of savings account, usually for healthcare or dependent care expenses, that offers tax advantages by using pre-tax dollars.

Federal Taxes

Federal Taxes are imposed by the government on income, goods, services, and activities, used to fund public services and government operations.