Which of the Following Statements Is Correct

question 152

Multiple Choice

Which of the following statements is correct?

• A)Equity is more important than efficiency as a goal of the tax system.
• B)Efficiency is more important than equity as a goal of the tax system.
• C)Both equity and efficiency are important goals of the tax system.
• D)Neither equity nor efficiency is an important goal of the tax system.

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Definitions:

Drawing Accounts

Accounts used in a sole proprietorship or partnership to record the amounts withdrawn by the owner(s) for personal use.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, indicating profit or loss.

Partners' Capital Statement

A financial statement that shows the changes in each partner’s equity in the business over a specific period of time.

Drawings

Withdrawals of cash or other assets from a business by the owner for personal use.