Match Each Statement with the Correct Term Below

question 56

Multiple Choice

Match each statement with the correct term below.
-Unearned income

• A)The category of income that includes interest, dividends, and rents.
• B)Income from wages, salaries, and trade or businesses.
• C)Interest income resulting from making an interest-free gift loan of $200,000.
• D)A taxable amount received from a state plan to provide a substitute for an employee's earned income.
• E)A series of equal payments received over equal time periods.
• F)A receipt of cash from a former spouse that is included in gross income.
• G)A payment received from a former spouse that is not included in gross income.
• H)A division of marital assets that does not result in any income recognition.
• I)A sale of property in which at least one payment is received in a tax year after the year of sale
• J)A method of accounting that must be used to recognize income from long-term construction contracts.
• K)A debt instrument that has the interest paid at maturity rather than throughout the life of the debt.

---

Definitions:

Federal Income Taxes

Federal government-imposed charges on the yearly earnings of individuals, corporations, trusts, and other legal entities.

Net Income

What a business earns in profit once every cost and tax is deducted from its revenue.

Bonus Plan Expense

Costs associated with incentive-based compensation programs designed to reward employees for their performance.

Gross Earnings

Gross earnings refer to the total income earned by an individual or company before any deductions such as taxes or other withholdings.