Vertical Equity Holds That

question 152

Multiple Choice

Vertical equity holds that

• A) those with equal ability to pay should bear equal tax burdens.
• B) those who benefit the most from governmental services should bear the higher tax burden.
• C) those with greater ability to pay should pay more.
• D) those with equal ability to pay should bear unequal tax burdens.

---

Definitions:

Support Department Costs

Expenses incurred by service departments that do not directly produce goods but support other departments that do.

Total Janitorial Costs

The complete expenses associated with cleaning and maintaining a facility.

Market Value

The current price at which an asset or service can be bought or sold in the open market, subject to supply and demand.

Reciprocal Services Method

A method used in cost accounting to allocate costs between interdependent departments, acknowledging mutual services they provide to each other.