If an Employer Chooses a Per Diem Method of Substantiation

question 55

Multiple Choice

If an employer chooses a per diem method of substantiation for travel expenses,

• A)The Regular Federal Rate method allows employees the same per diem rate no matter where they travel in the United States.
• B)The high-low method averages the high-cost locality and low-cost locality per diem rates to arrive at an average rate.
• C)The meals and incidental expenses method requires actual cost records to substantiate lodging expenses.
• D)Actual expense records substantiating the business reason for the trip and the dates of arrival and departure are not required.
• E)The employer need not use an accountable plan for reimbursing employees for travel expenses.

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Definitions:

Wasteful Duplication

The unnecessary repetition of tasks or production, often leading to inefficiency and increased costs.

Excess Capacity

A situation where a firm is operating below its maximum production capability and can produce more with the existing resources.

Physical And Human Capital

Assets including machinery, buildings (physical capital) and the skills, knowledge, and experience possessed by an individual or population (human capital).

Excess Capacity

A situation where a firm is producing at a lower scale of output than it has been built to handle, due to insufficient demand.