Inherent Risk Is the Susceptibility of a Transaction or Accounting

question 73

True/False

Inherent risk is the susceptibility of a transaction or accounting adjustment to be recorded in error,or for the transaction not to be recorded in the absence of internal controls.

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Definitions:

Marginal Tax Rate

The rate at which the last dollar of income is taxed, reflecting the rate applied to each additional dollar of income.

Net Pay

The amount of money an employee receives after deductions like taxes and social security charges are subtracted from the gross pay.

Laffer Curve

A representation of the relationship between rates of taxation and the resulting levels of government revenue that illustrates there can be an optimum tax rate that maximizes revenue.

Tax Revenues

The income that is collected by governments through taxation.