Which of the Following Is True

question 131

Multiple Choice

Which of the following is true?

• A) The growth of third-party payments during the last several decades has helped control inflation in the health-care sector.
• B) Public policy encourages Americans to purchase low deductible/low co-payment health insurance coverage through their employers.
• C) Low deductible health insurance coverage encourages health-care consumers to search for the best prices.
• D) The 2.9 percent Medicare payroll tax is sufficient to cover the cost of the promised future health-care services to senior citizens.

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Definitions:

Reversing Entry

An accounting technique that negates the impact of the previous entry, often used to simplify bookkeeping for accruals and deferrals.

Depreciation

The process of allocating the cost of a tangible asset over its useful life to account for the loss of value over time.

Accrual

The accounting method that records revenues and expenses when they are earned or incurred, regardless of when the cash is actually received or paid.

Prepaid Rent

An asset account that represents rent payments made in advance of the rental period to which they relate.