Under the Ability-To-Pay Concept, Taxpayers Are Required to Have Tax

question 125

True/False

Under the ability-to-pay concept, taxpayers are required to have tax withheld from income or to make estimated tax payments so that the taxpayer avoids a large tax liability at the end of the year.

---

Definitions:

Treasury Bills

Short-term government securities issued at a discount from the face value and mature in a year or less, used by governments to raise funds.

Money Markets

Financial markets for short-term borrowing and lending, typically with maturities of less than one year.

Current Asset

An asset expected to be converted into cash, sold, or consumed within one year or the normal operating cycle of the business, whichever is longer.

Non-current Asset

Long-term investments or properties that a company holds and are not expected to be converted into cash within a year.