Under Many Cafeteria Plans,employees Make Premium Contributions with Pre-Tax Dollars

question 12

Multiple Choice

Under many cafeteria plans,employees make premium contributions with pre-tax dollars.Then they use money from the salary reduction to purchase group health insurance or dental insurance.This type of cafeteria plan is called a

• A)health reimbursement arrangement plan.
• B)premium conversion plan.
• C)full-choice plan.
• D)flexible spending account plan.

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Definitions:

Estimated Method

An approach that involves approximating financial figures or outcomes based on available data and educated assumptions.

Perpetual Inventory

An inventory system that records changes in inventory levels immediately as they occur, facilitating real-time tracking of stock.

Financial Statements

Reports that summarize the financial condition and operations of a business, including balance sheet, income statement, and cash flow statement.

Net Realizable Value

The estimated selling price of goods, minus the costs of their completion and the costs required to make the sale, used in inventory valuation and accounts receivable.