Multiple Choice
Which of the following statements correctly describes the amount of the self-employment tax (SECA) and its comparison to FICA taxes for employees?
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1. Introduction to Accounting
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What is a primary benefit of setting up a recurring payment through online bill pay?
A
It increases the interest rate on your savings account.
B
It automatically negotiates lower bills with service providers.
C
It helps ensure bills are paid on time, reducing the risk of late fees.
D
It eliminates the need to track your spending.
Verified step by step guidance1
Understand the concept of recurring payments: Recurring payments are automated transactions set up to pay bills or expenses regularly, such as monthly utility bills or loan payments.
Identify the primary benefit: The main advantage of recurring payments is ensuring bills are paid on time, which helps avoid late fees and penalties.
Evaluate the incorrect options: Increasing the interest rate on a savings account, negotiating lower bills, or eliminating the need to track spending are not direct benefits of recurring payments.
Relate the benefit to financial management: Timely payments improve financial discipline and can positively impact your credit score by avoiding missed payments.
Conclude the correct answer: The primary benefit of recurring payments is ensuring bills are paid on time, reducing the risk of late fees.
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