A 29 Percent Payroll Tax (1

question 197

Multiple Choice

A 2.9 percent payroll tax (1.45 percent levied on both the employee and the employer) imposed on current workers is used to finance the

• A) Medicaid program that provides healthcare for the poor.
• B) hospitalization costs of Medicare beneficiaries.
• C) cost of physician services supplied to the elderly.
• D) healthcare costs of both the elderly and the poor.

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Definitions:

Permanent/Temporary

Classification of accounts where permanent accounts are balance sheet items carrying over to the next financial period, while temporary accounts are income statement items closed at the end of the period.

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance, reflecting its nature in accounting equations.

Financial Statement

Documentation that shows an entity's financial status at a specific time, including balance sheets, income statements, and cash flow statements.

Permanent/Temporary

Categories of accounting items: permanent (or real) accounts carry their ending balances into the next accounting period, and temporary (or nominal) accounts are closed at the end of every period.