Which of the Following Terms Indicate That Costs Are Not

question 105

Multiple Choice

Which of the following terms indicate that costs are not directly caused by the cost object?

• A)Allocated
• B)Assigned
• C)Common
• D)All of these ans choices are correct

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Definitions:

Ability-To-Pay Principle

The concept that taxes should be levied according to an individual's or entity's ability to bear them, typically resulting in higher earners paying more taxes.

Lump-Sum Taxes

Taxes that are a fixed amount, not dependent on the taxpayer's income or activities, thus they do not distort economic decisions.

Economic Efficiency

A condition where every resource is optimally allocated to serve each individual or entity in the best way while minimizing waste and inefficiency.

Ability-To-Pay Principle

The ability-to-pay principle in taxation suggests that taxes should be levied based on an individual's or entity's capacity to pay, meaning those with higher income should pay more.