Reports in the Financial Press That a Particular Company Reported

question 30

Multiple Choice

Reports in the financial press that a particular company reported healthy profits despite increased wage costs are indicative of:

• A) the negative impact of reporting payments to employees as expenses while payments to owners are treated as distributions of profits.
• B) the implied emphasis on the returns to owners being good and returns to other stakeholders such as employees as being bad.
• C) the effect of reporting employees as expenses and not reporting the social costs of unemployment on decisions to restructure companies to reduce the workforce.
• D) all of the given answers.

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Definitions:

Self-Employment Tax

Self-Employment Tax is a tax consisting of Social Security and Medicare taxes primarily for individuals who work for themselves.

Self-Employment Income

Earnings derived from one's own business, professional practice, or freelance work, subject to tax and self-employment contributions.

Adjusted Basis

The value of an asset for tax purposes, calculated by modifying its original cost by factors such as depreciation or improvements.

Accumulated Depreciation

The total depreciation expense charged against an asset over its useful life.