Which of the Following Is an Example of the Timing

question 15

Multiple Choice

Which of the following is an example of the timing strategy?

• A)A cash-basis taxpayer paying all outstanding bills by year-end.
• B)A parent employing her child in the family business.
• C)A business paying its owner a $30,000 salary.
• D)A taxpayer investing in a tax-preferred investment.
• E)None of the choices are correct.

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Definitions:

Fixed Costs

Costs that do not change with the level of production or sales within a short period, such as rent, salaries, and insurance.

Gross Margin Percentage

A profitability metric expressed as a percentage, calculated by subtracting the cost of goods sold from sales revenue and dividing the result by sales revenue.

Net Profit Margin

The percentage of revenue remaining after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from a company's total revenue.

Return on Assets

A measure of a company's profitability relative to its total assets, indicating how efficiently a company uses its assets to generate earnings.