If the Net Unearned Income of a Minor Child Is

question 43

True/False

If the net unearned income of a minor child is to be taxed at the parents' tax rate,the parents may elect,under certain conditions,to include the child's gross income on their tax return.

---

Definitions:

Average Collection Period

The ratio of accounts receivable to daily sales. Also called days’ receivables.

Financial Statements

Documents that report the financial activities and condition of a business or entity, including the balance sheet, income statement, and cash flow statement.

After-Tax Profit Margin

A profitability ratio calculated by dividing net income after taxes by net sales, showing what percentage of sales translates into profits after all expenses.

Asset Turnover Ratio

A financial metric that measures the efficiency of a company in using its assets to generate revenue, calculated by dividing total revenue by average assets.