Solve the Problem

question 64

Multiple Choice

Solve the problem. Refer to the table if necessary.
-You are single and have a taxable income of $56,767. You make monthly contributions of $455 to a tax-deferred savings plan. Calculate the effect on annual take-home pay of the tax-deferred
Contribution.

• A)Take-home pay will be $1365 more per year with tax-deferred plan
• B)Take-home pay will be $1820 less per year with tax-deferred plan
• C)Take-home pay will be $1820 more per year with tax-deferred plan
• D)Take-home pay will be $1365 less per year with tax-deferred plan

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Definitions:

Withdrawal of Cash

The act of taking money out from a business by the owners for personal use, not related to business expenses.

Cash Receipts Journal

A financial journal that records all cash coming into the business, providing a record of income from various sources.

Cash Payments Journal

A business ledger documenting every cash disbursement, covering costs, acquisition of assets, and settlement of debts.

Purchases Journal

A specialized accounting journal used to record all purchases of merchandise on credit.