Which of the Following Statements Regarding Late Filing Penalties And/or

question 134

Multiple Choice

Which of the following statements regarding late filing penalties and/or late payment penalties is true?

• A)An extension of time to file the tax return protects a taxpayer from late payment penalties as long as the tax is paid by the extended due date of the return.
• B)The penalty rate for late filing penalties is less than the penalty rate for late payment penalties.
• C)If a taxpayer has not paid the full tax liability by the original due date of the return and the taxpayer has not filed a tax return by the due date of the return, the maximum late filing and late payment penalty will be no greater than the late filing penalty by itself.
• D)None of the choices are correct.

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Definitions:

Merchandise Inventory

Goods that a retail or wholesale company intends to sell to customers. The inventory account is adjusted based on purchases and sales.

Purchases Returns

Goods returned to the supplier from the buyer due to defects, inaccuracies in orders, or other reasons.

Sales Returns

Transactions where customers return previously purchased merchandise to the seller, resulting in a deduction from gross sales to arrive at net sales.

Purchases Returns

Goods returned by a buyer to the seller, often due to defects or dissatisfaction, resulting in a refund or credit.