Which of the Following Statements About the Financing of the Social

question 25

Multiple Choice

Which of the following statements about the financing of the Social Security programs is (are) true?
I.Although the self-employed pay an OASDI tax rate that is twice the employee rate,they are allowed certain deductions that reduce the effective tax rate.
II.The earnings base on which OASDI taxes are paid increases annually based on changes in average wages in the national economy.

• A)I only
• B)II only
• C)both I and II
• D)neither I nor II

---

Definitions:

Current Liabilities

Short-term financial obligations that are due within one year or within the normal business cycle of a company.

Consolidated Balance Sheet

A comprehensive financial statement presenting the total assets, liabilities, and shareholder equity of a parent company and its subsidiaries as a single entity.

Common Shares

Equity securities that represent ownership in a corporation, granting voting rights and a share in the company's profits through dividends.

Equity Method

An accounting technique used for recording investments in which the investor has significant influence over the investee, but not full control.