Anna Contributes Pretax Dollars to an Account Managed by Her

question 93

Multiple Choice

Anna contributes pretax dollars to an account managed by her employer for her health care expenses. If she does not spend all of her money by the end of the year, she may forfeit it. What kind of plan does she have?

• A) FSA
• B) HRA
• C) Medicaid
• D) Medicare
• E) Self-funded health plan

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Definitions:

Pretax Profit

Earnings before tax, indicating the profitability of a business before accounting for tax obligations.

Net Profit

The amount of money earned by a company after all expenses and taxes have been subtracted from total revenue.

Leverage Ratio

A financial ratio indicating the degree to which a company or individual is financing its operations through debt, compared to its equity.

LIFO

"Last In, First Out," an inventory management method where the most recently produced or acquired items are the first to be used or sold.