Which, If Any, of the Following Items Is Subject to Indexation

question 17

Multiple Choice

Which, if any, of the following items is subject to indexation (adjusted to reflect inflation) ?

• A)The election to split gifts under § 2513.
• B)The limitation placed on the amount allowed as a charitable contribution for estate tax purposes (§ 2055).
• C)Annual exclusion.
• D)Unified transfer tax rates.
• E)None of the above.

Identify and correct errors related to adjusting entries for accrued expenses and revenues.

Understand the implications of not making adjusting entries on financial statements.

Calculate the correct amount of reported revenue for transactions involving unearned revenue.

Determine the book value of depreciable assets after accounting for depreciation expense.

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Definitions:

FICA

The Federal Insurance Contributions Act tax, a United States federal payroll (or employment) tax imposed on both employees and employers to fund Social Security and Medicare—federal programs that provide benefits for retirees, people with disabilities, and children of deceased workers.

Federal Insurance Contributions Act

A U.S. law that requires employees to contribute to Social Security and Medicare, with matching contributions from employers.

Burden Of The Tax

The impact of a tax on the economic welfare of individuals, showing who ultimately bears the cost of the tax.

Excise Tax

A direct tax placed on manufactured goods, and is often levied at the time of manufacture, rather than at sale.