A Firm's Net Income Over Some Period Is the Same

question 143

True/False

A firm's net income over some period is the same as its cash flow.

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Definitions:

FICA Tax

Federal Insurance Contributions Act tax, a U.S. federal payroll tax funding Social Security and Medicare benefits.

Federal Income Tax

A tax levied by the IRS on the annual earnings of individuals, corporations, trusts, and other legal entities.

Medical Insurance

A type of insurance coverage that pays for medical and surgical expenses incurred by the insured.

Withholding Allowance

An amount claimed on tax Form W-4 that determines how much income tax the employer will withhold from each paycheck. Each allowance claimed (as for a spouse or dependents) reduces the amount of income tax withheld.