Kevin and Sue Have Two Children, Ages 8 and 14

question 40

Multiple Choice

Kevin and Sue have two children, ages 8 and 14. They spend $6,200 per year on eligible employment related expenses for the care of their children after school. Kevin earned a salary of $20,000 and Sue earned a salary of $18,000. What is the amount of the credit for child and dependent care expenses?

• A) $690
• B) $713
• C) $1,380
• D) $1,426

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Definitions:

Minimizing Cash Holdings

A financial strategy focused on reducing the amount of cash a company or individual keeps on hand, often to boost efficiency or investment returns.

Relaxed Working Capital Policies

Financial strategies that involve maintaining higher levels of current assets than necessary or reducing short-term liabilities, aiming for greater flexibility and lower risk of liquidity problems.

Short-term Loans

Borrowed funds that require repayment within a shorter timeframe, typically less than one year.

Long-term Loans

Financial obligations that are due for repayment over a period longer than one year.