Sean and Lisa (Age 25 and 28,respectively)are Purchasing Their First

question 137

Multiple Choice

Sean and Lisa (age 25 and 28,respectively) are purchasing their first home for $200,000 with a 5% down payment.They will withdraw the down payment from Lisa's IRA.They will have to pay ____ on the IRA withdrawal.

• A) federal income taxes
• B) an early withdrawal penalty
• C) Social Security taxes
• D) a and b
• E) a,b,and c

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Definitions:

Internal Control

Methods and protocols established by an enterprise to protect the veracity of its financial and accounting reports, support ethical conduct, and prevent malfeasance.

Electronic Funds Transfer

Electronic Funds Transfer (EFT) is the digital transfer of money from one bank account to another, either within the same financial institution or across different institutions.

Disbursement System

The system and processes involved in paying out money from an organization or fund.

Original Entry

The initial recording of a financial transaction in the accounting records or journal, marking the first stage in the accounting process.