Employer-Provided Spending Accounts

question 47

Multiple Choice

Employer-provided spending accounts:

• A)May be set up for tax-free vacation savings
• B)Are not allowed for dependent care
• C)Do not require that the employee provide receipts for the expenses incurred
• D)Allow qualifying expenses to be treated as tax-free reductions in the employees' salaries

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Definitions:

Bargain Purchase Option

A clause in a lease agreement allowing the lessee to purchase the leased asset at the end of the lease term at a price significantly below its expected fair market value.

Executory Costs

Expenses related to executing a contract, such as maintenance and insurance costs, that are typically incurred over the contract's term.

FASB

The Financial Accounting Standards Board, responsible for establishing and improving financial accounting and reporting standards in the United States.