What equals capital at the start of the accounting period plus profit?
- Assets less liabilities less drawings equals capital at the start of the accounting period plus profit. (2 marks) 1.3 The double entry system of bookkeeping normally results in which of the following balances in the ledger accounts?
Which of the following is a characteristic of a good tax?
A good tax system should meet five basic conditions: fairness, adequacy, simplicity, transparency, and administrative ease.
What are the characteristics of goods tax system?
A good tax system should meet five basic conditions: fairness, adequacy, simplicity, transparency, and administrative ease.
- Fairness, or equity, means that everybody should pay a fair share of taxes.
- Adequacy means that taxes must provide enough revenue to meet the basic needs of society.
What is equity principle of taxation?
Further, according to this theory, equity or fairness in taxation demands that an individual should be asked to pay a tax in proportion to the benefits he receives from the services rendered by the Government.
What are the four characteristics of a good tax?
The principles of good taxation were formulated many years ago. In The Wealth of Nations (1776), Adam Smith argued that taxation should follow the four principles of fairness, certainty, convenience and efficiency.
Which of the following is a characteristic of a direct tax?
Income tax, corporation tax, property tax, inheritance tax and gift tax are examples of direct tax.
Which is not the characteristic of a tax?
It is a compulsory payment. Every tax involves a sacrifice by tax payer. There is a quid-pro-quo between the tax payer and the Government. Refusal to pay tax is a punishable offence.
Which are the characteristics of good tax system Mcq?
Six Principles or Characteristics of a Good Tax System
- Productivity or Fiscal Adequacy:
- Elasticity of Taxation:
- Diversity:
- Taxation as in Instrument of Economic Growth:
- Taxation as an Instrument for Improving Income Distribution:
- Taxation for Ensuring Economic Stability:
- Conclusion:
What is horizontal equity in tax?
A principle used to judge the fairness of taxes, which holds that taxpayers who have the same income should pay the same amount in taxes. The principle of horizontal equity is a basic yard- stick used to gauge whether tax burdens are fairly distributed.
What is an example of equity when evaluating a tax system?
What is an example of equity when evaluating a tax system? Each taxpayer pays a different amount based on their income level.
Which of the following is an example of horizontal equity?
Horizontal equity implies that we give the same treatment to people in an identical situation. E.g. if two people earn £15,000 they should both pay the same amount of income tax. Therefore, horizontal equity makes sure we don’t have discrimination on the grounds such as race / gender / different types of work.
What are the 3 criteria for effective taxes?
In this lesson we looked at the criteria that must be examined for a tax system. Three general ideas must be kept in mind, namely efficiency, equity, and simplicity. Tax brackets offer a way to share equity, but can be viewed as less simple and less efficient.