The Ability-To-Pay Principle Claims That a Person Should Pay Taxes

question 94

Multiple Choice

The ability-to-pay principle claims that a person should pay taxes according to

• A)the level of public education that the person has received throughout his lifetime.
• B)how many government services that person will receive.
• C)how well that person can shoulder the tax burden.
• D)the level of debt that the person has.

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Definitions:

Full Settlement

A financial arrangement where a debtor pays a lump sum that is less than the total amount owed to fully settle the outstanding debt.

Perpetual Inventory System

An inventory accounting system that records purchases and sales of merchandise immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Periodic Inventory System

A periodic inventory system is an accounting method where inventory levels and cost of goods sold are determined at the end of an accounting period, not after each sale or purchase.

Freight Charges

Costs associated with transporting goods from one location to another, paid by the shipper or the receiver, depending on the terms of sale.