If an Employer Chooses a Per Diem Method of Substantiation

question 10

Multiple Choice

If an employer chooses a per diem method of substantiation for travel expenses,

• A)The high-low method allows employees traveling mostly in high-cost areas the same high-cost per diem rate all year.
• B)The high-low method averages the high-cost locality and low-cost locality per diem rates to arrive at an average rate.
• C)The meals and incidental expenses method requires actual cost records to substantiate lodging expenses.
• D)Actual expense records substantiating the business reason for the trip and the dates of arrival and departure are not required.
• E)The employer need not use an accountable plan for reimbursing employees for travel expenses.

---

Definitions:

Cost of Debt

The effective rate that a company pays on its total debt, reflecting the expense of borrowing funds.

Straight-Line Depreciation

A method of allocating an asset's cost evenly across its useful life.

After-Tax Annual Lease Payment

The amount of money paid every year for a lease after accounting for taxes.

Tax Rate

The fraction of earnings or revenue that governmental bodies levy as tax from individuals or corporations.