Which of the Following Statements Concerning a Comparison Between Employees

question 163

Multiple Choice

Which of the following statements concerning a comparison between employees and independent contractors is most accurate?

• A)Employees and independent contractors deduct business expenses as miscellaneous itemized deductions.
• B)While employees are typically eligible for nontaxable fringe benefits from employers, independent contractors are not.
• C)Employers are required to withhold either FICA or self-employment taxes from compensation paid to employees and compensation paid to independent contractors.
• D)Employers typically withhold federal income taxes from compensation paid to employees and to independent contractors.

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Definitions:

Variable Costing

An accounting method that only includes variable production costs in product costs, excluding fixed costs.

Direct Materials

Raw materials that can be directly linked to the production of specific goods or services.

Variable Overhead

Expenses related to the indirect costs of production that vary with the level of output, including items such as indirect labor and maintenance expenses.

Net Income

The total earnings of a company after subtracting all expenses and taxes from total revenue, indicating overall profitability.