Boris Wanted to Reduce His Tax Liability by Lowering the Amount

question 17

Multiple Choice

Boris wanted to reduce his tax liability by lowering the amount of income that is taxable through deductions and credits.To do this,he decided to use the cafeteria plan available through his employer.How is the cafeteria plan advantageous for Boris?

• A)The cafeteria plan allows Boris to select from a pool of benefit choices,some or all of which may be tax-advantaged.
• B)These qualified benefits will be paid by Boris on a pretax basis,which reduces his taxable salary.
• C)It allows him to claim a higher number of exemptions on his taxes.
• D)A and B

---

Definitions:

State Unemployment

A government-provided insurance program that offers temporary financial assistance to workers who have lost their jobs.

SUTA

This stands for State Unemployment Tax Act, which is a payroll tax that employers must pay to the state to fund its unemployment benefits program.

Current Liabilities

Short-term financial obligations that are due within one year or within a normal operating cycle.

Quick Ratio

A liquidity metric that indicates a company's ability to cover its current liabilities without selling inventory, calculated as (cash plus marketable securities plus accounts receivable) divided by current liabilities.