An Income Statement

question 26

Multiple Choice

An income statement

• A) summarizes the changes in owner's equity for a specific period of time.
• B) reports the changes in assets liabilities and owner's equity over a period of time.
• C) reports the assets liabilities and owner's equity at a specific date.
• D) presents the revenues and expenses for a specific period of time.

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Definitions:

Progressive Tax

At the individual level, a tax whose average tax rate increases as the taxpayer’s income increases. At the national level, a tax for which the average tax rate (= tax revenue/GDP) rises with GDP.

Average Tax Rate

Total tax paid divided by total taxable income or some other base (such as total income) against which to compare the amount of tax paid. Expressed as a percentage.

Highly Progressive

A tax system in which tax rates increase significantly as income or wealth rises.

Federal Spending

Expenditures by the federal government, which can include spending on defense, social security, health care, and infrastructure, among others.