Which of the Following Is a Reason a Person Would

question 70

Multiple Choice

Which of the following is a reason a person would prefer to be an independent contractor?

• A)An independent contractor pays only 7.65 percent FICA tax.
• B)An independent contractor can deduct expenses directly from business income.
• C)An independent contractor can deduct his or her health insurance directly from business income.
• D)An independent contractor can always participate in the retirement plan of the business for which he or she is performing work.

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Definitions:

Source Documents

Original records that provide evidence and details of business transactions, such as receipts and invoices.

Debit

A financial record that elevates an asset or expense account, or lessens a liability or equity account.

Double-entry Accounting

An accounting method where every financial transaction results in equal and opposite effects in at least two different accounts.

Ledger

A book or collection of financial accounts where all transaction records are summarized and recorded.