Which of the Following Statements Concerning the Client-Independent Contractor Relationship

question 46

Multiple Choice

Which of the following statements concerning the client-independent contractor relationship is false?

• A) A client may only accept or reject the final results of the work of an independent contractor.
• B) An independent contractor is entitled to all the fringe benefits offered to the client's employees.
• C) At the end of each tax year, a client issues a Form 1099 to an independent contractor reporting the compensation paid during the year.
• D) An independent contractor must pay both income tax and self-employment tax.

Understand the preparation and purpose of consolidated financial statements.

Recognize the impact of ownership percentages on accounting methods.

Identify the effects of investments on financial statements (unrealized gains/losses, investment income).

Understand the classifications of investments (trading, available-for-sale, held-to-maturity).

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Definitions:

Denotative Meanings

The explicit or direct meanings of words or phrases in contrast to their connotative or associated meanings.

Metaphorical

Pertaining to or characterized by the use of a figure of speech in which a term or phrase is applied to something to which it is not literally applicable in order to suggest a resemblance.

Connotative

Pertaining to the implied or emotional meaning of a word, in contrast to its literal meaning.

Denotative

Relating to the explicit or direct meaning of a word or term, as opposed to its connotative (implied or associated) meanings.