Which of the Following Is NOT True of an Insolvent

question 45

Multiple Choice

Which of the following is NOT true of an insolvent bank?

• A) Its net worth is negative.
• B) It may be unable to pay off its depositors.
• C) The value of its assets is less than the value of its liabilities.
• D) It must have no more deposits.

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Definitions:

Form 4070

Form 4070 is a tax form used by employees to report tips to their employer, which are then subject to social security and Medicare taxes.

FICA Withholding

Taxes deducted from employees’ paychecks for Social Security and Medicare, based on the Federal Insurance Contributions Act.

Federal Income Tax

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

FUTA Taxes

Federal Unemployment Tax Act (FUTA) taxes are federal employer taxes that contribute to state workforce agencies to fund unemployment benefits.