Negotiable Instruments

question 24

Multiple Choice

Negotiable instruments:

• A) include drafts, promissory notes, assignments, and certificates of deposit.
• B) are used primarily for smaller transactions.
• C) in the form of checks have decreased in use since 2000.
• D) have increased in usage to the point where they are now approximately equal to usage of cash for payments.

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Definitions:

Active Participant

An individual who is actively contributing to a qualified retirement plan or is credited with service under the plan for the tax year.

Qualified Pension Plan

A retirement plan that meets the requirements of the Internal Revenue Code, thereby offering tax advantages such as deferred taxation on earnings.

Nontaxable

Describes income or transactions that are not subject to income tax by law or specific exemption.

Fully Taxable

Income that is subject to tax at the regular rates without any deductions or exemptions.