Which of the Following Is NOT a Disadvantage of Flexible

question 53

Multiple Choice

Which of the following is NOT a disadvantage of flexible benefit programs?

• A)Administrative burdens and expenses increase.
• B)Adverse selection of benefits by employees results in increase in costs.
• C)New benefits are more difficult to introduce.
• D)Flexible benefits are subject to nondiscrimination requirements in Section 125 of Internal Revenue Code.

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Definitions:

Contingent Liability

A potential financial obligation that may arise in the future, depending on the outcome of a certain event.

Financial Statements

A set of formal documents tracking the financial activities, status, and cash flows of a business, providing insight into its financial health over a specified period.

Accrual

An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when the cash is actually received or paid.

Interest Expense

The amount an entity pays for the use of borrowed funds throughout a certain duration.