Which of the Following Statements Is True About Flexible Spending

question 80

Multiple Choice

Which of the following statements is true about flexible spending accounts?

• A)They can only be used for dependent-care expenses.
• B)They restrict pretax employee contributions.
• C)They are regulated under the state tax code.
• D)Funds must be used by the plan's yearend or they revert to the employer.
• E)These accounts cause a reduction in the take-home pay.

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Definitions:

Fair Value

The estimated market value of an asset, liability, or financial instrument at a given point in time.

Goodwill Impairment

A decrease in the value of a company's goodwill asset, indicating that the value of an acquired company's brand, customer base, or proprietary technology has declined.

Depreciation Expense

The allocation of the cost of a tangible asset over its estimated useful life to account for wear and tear, obsolescence, or decay.

Coupon Rate

The interest rate that a bond issuer will pay to a bondholder.