If Bob Earns $20,000 a Year and Pays $2,000 in Taxes,and

question 49

Multiple Choice

If Bob earns $20,000 a year and pays $2,000 in taxes,and Cindy earns $40,000 a year and pays $4,000 in taxes,there must be a _______________ tax in place.

• A)progressive
• B)regressive
• C)proportional
• D)lump-sum

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Definitions:

Partnership Terminated

The dissolution of a business partnership through the exit of one or more partners or by mutual agreement.

Agreement

A mutual arrangement, contract, or understanding between parties outlining their rights and responsibilities.

Death

The cessation of all biological functions that sustain a living organism; not relevant in a financial context.

Liquidation Purposes

The process of converting assets into cash or cash equivalents by selling them in the event that a business is closing or reorganizing