With a Lump-Sum Tax,how Is the Average Tax Rate Evaluated

question 45

Multiple Choice

With a lump-sum tax,how is the average tax rate evaluated

• A)The average tax rate is always equal to zero.
• B)The average tax rate is always less than the marginal tax rate.
• C)The average tax rate falls as income rises.
• D)The average tax rate rises as income rises.

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Definitions:

Accounting Cycle

The collective process of recording and processing the accounting events of a company, from when the transaction occurs, to its inclusion in the financial statements.

Financial Statements

Consolidated documents presenting the financial status, performance, and cash flows of a company, primarily comprising the balance sheet, income statement, and statement of cash flows.

Working Paper

Documents that record the detailed information and procedures used in an audit or financial analysis, serving as the basis for conclusions.

End-Of-Period Spreadsheet

A document used to gather all account balances at the end of an accounting period to prepare financial statements.