The Sales Returns and Allowances Account Is Not Debited If

question 81

Multiple Choice

The Sales Returns and Allowances account is not debited if a customer

• A) returns defective merchandise.
• B) receives a credit for merchandise of inferior quality.
• C) utilizes a prompt payment incentive.
• D) returns goods that are not in accordance with specifications.

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Definitions:

Ability-to-Pay Principle

A tax principle suggesting that taxes should be levied according to an individual or entity's capacity to pay, generally implying that those with higher incomes should pay more tax.

Proportional Income Tax

A tax system where the tax rate remains constant regardless of the amount of income, thus taxing all income levels at the same percentage.

Horizontal Equity

The principle that individuals or entities in similar financial situations should be treated equally by the tax system or other public policies.

Tax Burdens

The total amount of taxes imposed on an individual or business by a government entity.