Accounting Tax Chapters 1-4
(Mcgraw-Hill) with correct
questions and answers
usr
, 1. Who cares about taxes? Answer: Businesses, Politicians,individuals
2. Tax Answer: A payment required by a government agency that is unrelated to any specific benefit
or service received from the government agency
3. Tax Rate Answer: level of taxes imposed on the tax base and is usually expressed as a
percentage
4. Tax Base Answer: defines what is actually taxed and is usually expressed in monetary terms
5. Formula for calculating tax Answer: Tax= Tax Base X Tax rate
6. 3 different ways to measure tax rates Answer: Marginal Tax Rate, Average Tax Rate,
Ettective Tax Rate
7. marginal tax rate Answer: the tax rate that applies to the next additional increment of a
taxpayers taxable income
8. average tax rate Answer: the taxpayers average level of taxation on each dollar of taxable
income
9. effective tax rate Answer: the taxpayers average rate of taxation on each dollar of total
income (both taxable and non-taxable)
10. average tax rate = Answer: total tax / taxable income
11. effective tax rate = Answer: total tax / total income
12. graduated taxes Answer: the base is divided into a serious of monetary accounts, or
brackets, a portion of the tax base is subject to a specific tax rate
13. 3 tax rate structures Answer: flat tax, progressive tax, regressive tax
14. flat tax rate (proportional tax rate) Answer: imposes a constant tax rate
throughout the tax base
15. progressive tax rate Answer: imposes an increasing marginal tax rate as the tax
base increases
16. regressive tax rate Answer: imposes a decreasing marginal tax rate as the tax base
increases
17. types of federal taxes Answer: income taxes, employment and unemployment taxes,
excise taxes, and transfer taxes
18. income tax Answer: federal tax used to cover government programs
19. employment and unemployment tax Answer: federal tax used to fund
social security, medicare, and unemployment payments
20. excise tax Answer: federal tax that is the quantity of product sold (alcohol, gasoline)
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(Mcgraw-Hill) with correct
questions and answers
usr
, 1. Who cares about taxes? Answer: Businesses, Politicians,individuals
2. Tax Answer: A payment required by a government agency that is unrelated to any specific benefit
or service received from the government agency
3. Tax Rate Answer: level of taxes imposed on the tax base and is usually expressed as a
percentage
4. Tax Base Answer: defines what is actually taxed and is usually expressed in monetary terms
5. Formula for calculating tax Answer: Tax= Tax Base X Tax rate
6. 3 different ways to measure tax rates Answer: Marginal Tax Rate, Average Tax Rate,
Ettective Tax Rate
7. marginal tax rate Answer: the tax rate that applies to the next additional increment of a
taxpayers taxable income
8. average tax rate Answer: the taxpayers average level of taxation on each dollar of taxable
income
9. effective tax rate Answer: the taxpayers average rate of taxation on each dollar of total
income (both taxable and non-taxable)
10. average tax rate = Answer: total tax / taxable income
11. effective tax rate = Answer: total tax / total income
12. graduated taxes Answer: the base is divided into a serious of monetary accounts, or
brackets, a portion of the tax base is subject to a specific tax rate
13. 3 tax rate structures Answer: flat tax, progressive tax, regressive tax
14. flat tax rate (proportional tax rate) Answer: imposes a constant tax rate
throughout the tax base
15. progressive tax rate Answer: imposes an increasing marginal tax rate as the tax
base increases
16. regressive tax rate Answer: imposes a decreasing marginal tax rate as the tax base
increases
17. types of federal taxes Answer: income taxes, employment and unemployment taxes,
excise taxes, and transfer taxes
18. income tax Answer: federal tax used to cover government programs
19. employment and unemployment tax Answer: federal tax used to fund
social security, medicare, and unemployment payments
20. excise tax Answer: federal tax that is the quantity of product sold (alcohol, gasoline)
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6
