Which One of the Following Statements Is Not True Concerning

question 44

Multiple Choice

Which one of the following statements is not true concerning tax rates?

• A)A proportional tax rate is one in which an increasing percentage rate is applied to increasing increments of the tax base.
• B)The marginal tax rate of any rate structure is that percentage at which the next dollar added to the tax base will be taxed.
• C)The average tax rate is the percentage of taxable income paid in tax.
• D)The effective tax rate is the percentage of total income paid in tax.
• E)An individual cannot pay more in Federal income taxes than he reports as taxable income unless his marginal tax rate exceeds 100 percent.

---

Definitions:

Operating Expenses

Expenses incurred from a company's primary business activities, excluding cost of goods sold, such as rent, salaries, and utility bills.

Gross Profit

The difference between revenue and the cost of goods sold, before deducting overhead, payroll, taxation, and interest.

Cost of Goods Sold

Cost of goods sold is the direct costs attributable to the production of the goods sold by a company, including material and labor expenses.

Gross Profit Rate

The ratio of gross profit to net sales, expressed as a percentage, indicating the efficiency of a company in managing its direct costs.