Which of the Following Principles Encourages a Vertically Equitable Tax

question 83

Multiple Choice

Which of the following principles encourages a vertically equitable tax system?

• A)Pay-as-you-go
• B)Economy
• C)Income effects
• D)Ability to pay principle
• E)None of the choices are correct

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Definitions:

Cash Budget

An estimation of cash inflows and outflows over a specific period, used to manage and plan for any potential surplus or deficit in cash.

Shortage Costs

Costs incurred when the demand for a product exceeds the supply available, potentially including lost sales, expedited shipping fees, and lower customer satisfaction.

Operating Cycle

The duration of time it takes for a company to purchase inventory, sell it to customers, and collect the cash from the sale.

Cash Cycle

The period between the outlay of cash for the purchase of inventory and the receipt of cash from accounts receivable, reflecting how quickly a company can convert its products into cash through sales.