Which of the Following Statements Regarding Compensation Is False

question 7

Multiple Choice

Which of the following statements regarding compensation is false?

• A) Wages are usually paid by the hour.
• B) Salary is usually a form of fixed compensation.
• C) Bonuses are a form of compensation obtained if certain criteria are met.
• D) Bonuses paid within 2½ months of year-end are included in employee's compensation in the year they were earned.

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Definitions:

Implicit Costs

Non-direct payments or out-of-pocket costs, representing the opportunity costs of using resources owned by the firm for its own use.

Explicit Costs

Payments made directly to individuals or entities for business operations, including salaries, leasing costs, and supplies.

Implicit Costs

The opportunity costs of using resources that a firm already owns, rather than the expenses directly paid out.

Explicit Costs

Direct, out-of-pocket expenses incurred by a firm or individual for business operations or activities.