Which of the Following Statements Is Incorrect Regarding Unfunded Deferred

question 74

Multiple Choice

Which of the following statements is incorrect regarding unfunded deferred compensation plans?

• A)The employee is not taxed on the compensation amount when it is deposited in an escrow account.
• B)An accrual-basis employer can deduct the compensation amount when it is accrued in the year of service.
• C)An employee is taxed when the amount is actually paid or made available.
• D)A 20% excise tax will apply if the employee can voluntarily elect to receive payment early.

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Definitions:

Resources

Assets, materials, and inputs needed for the production of goods and services, including natural resources, labor, and capital.

Perfectly Competitive

A market structure characterized by many buyers and sellers, homogenous products, and the absence of barriers to entry or exit, leading to optimal pricing and output.

Producing Level

The quantity of goods or services that a firm decides to produce and offer to the market at a given time.

Input Markets

The markets where firms buy resources they need to produce goods and services.