Krissa Wants to Buy a Horse from Gunnar

question 8

Multiple Choice

Krissa wants to buy a horse from Gunnar.Gunnar agrees to let Krissa take the horse for a week to try it out.They sign a contract for a sale on approval.Krissa rides the horse for a week,but then decides that she does not like it.Krissa

• A)must still buy the horse.
• B)can return the horse with no penalty.
• C)can return the horse,but must buy another one from Gunnar.
• D)can return the horse,but must pay a penalty fee.

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Definitions:

Minimum Tax Exemption

An amount exempt from alternative minimum tax (AMT), designed to ensure that taxpayers with substantial income pay at least a minimum amount of tax.

Book Income

The income calculated for accounting purposes, rather than for tax purposes, often used to measure a company's financial performance.

Taxable Income

The amount of income used to determine how much tax an individual or a corporation owes to the government.

Federal Income Tax

A charge imposed by the IRS on the yearly income of individuals, corporations, trusts, and various legal bodies.