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:

Preventive Maintenance

Maintenance activities performed regularly on equipment before faults occur, aimed at reducing the risk of unexpected breakdowns and downtime.

Breakdown Maintenance

The practice of repairing or fixing equipment and machinery only after it has failed or broken down, as opposed to performing regular preventative maintenance.

MTBF Distribution

MTBF (Mean Time Between Failures) Distribution is a statistical representation of the expected performance or reliability of a system, indicating the average time between failures.

Standard Deviation

A measure of the dispersion or variation in a set of values, indicating how spread out the values are from the mean.