A Flexible Spending Account Allows an Employee to Set Up

question 50

True/False

A flexible spending account allows an employee to set up a pre-tax account into which a part of their pay is deposited with their employer to be used to pay for child care and medical expenses.

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Definitions:

Straight-Line Amortization

A method of systematically reducing a loan or the cost of an intangible asset over a fixed period, where equal amounts are expensed in each period.

Semiannual

Occurring twice a year; a term often used in finance to describe payments, interest accruals, or other events that happen every six months.

Unamortized Discount

The portion of a bond discount that has yet to be expensed in the income statement over the bond's life.

Gain

Refers to the profit earned from the sale of an asset or investment for more than its purchase cost, excluding income from the primary business activities.