Which of the Following Statements Is/are True About Medicare Tax

question 16

Multiple Choice

Which of the following statements is/are true about Medicare tax? (You may select more than one answer. )

• A)All employee earnings less pre-tax deductions are subject to Medicare tax.
• B)Employers match all Medicare taxes withheld.
• C)The Medicare tax rate is 1.45%.
• D)Additional Medicare tax is withheld for employees who earn more than $150,000 annually.

---

Definitions:

Cash Realizable Value

The amount of cash expected to be received from assets or receivables after accounting for discounts or allowances.

Accounts Receivable

Money owed to a business by its customers for goods or services provided on credit.

Allowance

An accounting practice that reduces the value of assets or income for the purpose of conservative financial reporting and tax savings.

Percentage of Receivables Method

The percentage of receivables method is an accounting technique used to estimate the amount of a company's accounts receivable that will not be collected, based on past experience.