Multiple Choice
Transactions between a company and its stockholders affect the company's _____ accounts only.
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1. Introduction to Accounting
Types of Accounting
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Examples of employee voluntary deductions may include all of the following except:
A
Federal income tax withholding
B
Health insurance premiums
C
Retirement plan contributions
D
Charitable contributions
Verified step by step guidance1
Understand the concept of employee voluntary deductions: These are amounts that employees choose to have deducted from their paychecks for specific purposes, such as health insurance, retirement plans, or charitable contributions.
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.
Analyze the options provided in the question: Federal income tax withholding is a mandatory deduction, while health insurance premiums, retirement plan contributions, and charitable contributions are examples of voluntary deductions.
Identify the exception: Since federal income tax withholding is mandatory and not voluntary, it does not fall under the category of employee voluntary deductions.
Conclude that the correct answer is 'Federal income tax withholding,' as it is the only option that does not represent a voluntary deduction.
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