Which of the Following Statements Regarding Employee Versus Independent Contractor

question 96

Multiple Choice

Which of the following statements regarding employee versus independent contractor status is false?

• A) The determination as to whether a worker is an employee or an independent contractor is based on a subjective set of guidelines.
• B) An employer has a financial incentive to classify a worker as an independent contractor instead of an employee.
• C) The IRS has a higher probability of collecting income and payroll taxes from an independent contractor than from an employee.
• D) If the IRS reclassifies a worker from independent contractor to employee, the employer can become liable for the employee's share of unpaid payroll taxes.

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Definitions:

Production Cost Report

A detailed report that provides information about the total cost and output of a production department or process for a given period.

Business Organization

A structured entity formed for the purpose of conducting commercial, industrial, or professional activities.

Just-In-Time Management

A management strategy that aligns raw-material orders from suppliers directly with production schedules, minimizing inventory levels and waste.

Production Cost Report

A document detailing the total cost, including materials, labor, and overhead, associated with producing a batch of goods.