An Employee Is Terminated for Poor Attendance

question 22

Multiple Choice

An employee is terminated for poor attendance.The employer sends a letter on May 1 notifying him of his right to receive continuation health insurance coverage.The letter states that the former employee must respond by May 30 to be eligible for up to 6 months of continuation coverage.The employer's letter:

• A)accurately states the former employee's rights under COBRA
• B)should state that the employee has 45 days to decide on coverage that would last up to 3 years
• C)should state that the employee has 60 days to decide on coverage that would last up to 3 years
• D)should state that the employee has 60 days to decide on coverage that would last up to 18 months
• E)should not have been sent since a termination for poor attendance is not a qualifying event under COBRA

Explain the rationale behind using notes receivable in lieu of overdue accounts receivable.

Understand the calculation of interest on promissory notes.

Differentiate between various types of receivables and their recording.

Identify the roles of involved parties in a promissory note transaction.

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Definitions:

Financial Intermediary

An institution that facilitates the channeling of funds between lenders and borrowers, such as banks, investment funds, and insurance companies.

Loan Syndicates

Groups of banks or financial institutions that come together to provide a large loan to a single borrower, spreading the risk among them.

Partnerships

A business structure where two or more individuals share ownership, profits, and liabilities of the business.

Interest Rate

The cost of borrowing money or the return on invested funds, typically expressed as a percentage of the principal amount per annum.