Which of the Following Statements Is Incorrect Regarding Unfunded Deferred

question 29

Multiple Choice

Which of the following statements is incorrect regarding unfunded deferred compensation plans?

• A)The employee is not taxed on the compensation amount when it is deposited in an escrow account.
• B)An accrual-basis employer can deduct the compensation amount when it is accrued in the year service.
• C)An employee is taxed when the amount is actually paid or made available.
• D)A 20% excise tax will apply if the employee can voluntarily elect to receive payment early.

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Definitions:

Correlational Method

A research procedure used to determine how much events or characteristics vary along with each other.

Merit

Merit refers to the quality of being particularly good or worthy, especially so as to deserve praise or reward.

Generalized

Referring to something that is widespread, not specific, affecting all or most parts of something.

Sample

A subset of individuals or elements selected from a larger population, used to make inferences or observations about the population as a whole.