Multiple Choice
K buys a policy where the premium payments are recorded as an expense in the company's financial statements. Which type of accounting is primarily responsible for recording this transaction?
19
views
1. Introduction to Accounting
Types of Accounting
Struggling with Financial Accounting?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Voluntary deductions from employee pay can include all of the following EXCEPT:
A
Federal income tax withholding
B
Charitable donations
C
Contributions to retirement plans (e.g., 401(k))
D
Health insurance premiums
Verified step by step guidance1
Understand the concept of voluntary deductions: Voluntary deductions are amounts that employees choose to have withheld from their paychecks for specific purposes, such as retirement savings, health insurance, or charitable donations.
Recognize the difference between voluntary and mandatory deductions: Mandatory deductions are required by law, such as federal income tax withholding, Social Security, and Medicare taxes. Voluntary deductions are optional and based on the employee's preferences.
Review the examples of voluntary deductions provided in the problem: Charitable donations, contributions to retirement plans (e.g., 401(k)), and health insurance premiums are all examples of voluntary deductions.
Identify the exception in the list: Federal income tax withholding is a mandatory deduction required by law and is not considered a voluntary deduction.
Conclude that the correct answer is the mandatory deduction (Federal income tax withholding), as it does not fall under the category of voluntary deductions.
4:10mWatch next
Master Types of Accounting: Financial and Managerial with a bite sized video explanation from Brian
Start learningRelated Videos
Related Practice
Types of Accounting practice set
Problem sets built by lead tutorsExpert video explanations