Joyce, Age 40, and Sam, Age 42, Who Have Been

question 53

Multiple Choice

Joyce, age 40, and Sam, age 42, who have been married for seven years, are both active participants in qualified retirement plans. Their total AGI for 2017 is $120,000. Each is employed and earns a salary of $65,000. What are their combined deductible contributions to traditional IRAs?

• A)$0
• B)$3,000
• C)$4,000
• D)$8,000
• E)None of the above

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Definitions:

Accrual

The accounting method that recognizes revenues and expenses when they are incurred, regardless of when cash transactions occur.

Wages Expense

The total cost incurred by a company for the salaries or wages of its employees.

Adjust Unearned Revenue Account

The process of recognizing revenue that was received in advance as it is earned based on the delivery of goods or services.

Financial Statements

Written records that convey the business activities and the financial performance of a company, including the balance sheet, income statement, and cash flow statement.