In a Vertical Analysis of the Income Statement, the 100

question 172

Multiple Choice

In a vertical analysis of the income statement, the 100% amount is

• A) Net income
• B) Gross profit
• C) Operating income
• D) Net sales

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Definitions:

Proportional Tax

A taxation system where the tax rate remains constant regardless of the amount subject to tax.

Progressive Tax

A tax system where the tax rate increases as the taxable amount or income rises, meaning higher earners pay a larger percentage of their income in taxes than lower earners.

Progressive Tax

A tax system where the tax rate increases as the taxable amount increases, meaning higher income individuals pay a larger percentage of their income in taxes compared to lower-income individuals.

Tax Rate

The percentage at which an individual or corporation is taxed.