Additional Time Given to the Payee to Settle an Account

question 45

Multiple Choice

Additional time given to the payee to settle an account with issuance of a note, results in a transfer of:

• A) assets from Notes Receivable to Accounts Receivable.
• B) assets from Accounts Receivable to Notes Receivable.
• C) liabilities from Notes Payable to Accounts Payable.
• D) liabilities from Accounts Payable to Notes Payable.

---

Definitions:

Progressive Income Tax

A tax system where the tax rate increases as the taxable amount increases, placing a higher financial burden on wealthier individuals.

Regressive Income Tax

A tax system where the tax rate decreases as the taxable amount increases, placing a higher relative burden on lower-income earners.

Marginal Tax Rate

The rate at which the last dollar of income is taxed, reflecting the rate applied to each additional dollar of income.

Net Pay

The amount of money an employee receives after deductions like taxes and social security charges are subtracted from the gross pay.