What Is the Purpose of the Federal W-4 Form

question 3

Multiple Choice

What is the purpose of the Federal W-4 form?

• A)To notify the federal government when a new employee is hired
• B)To allow an employee to choose the number of withholding allowances for calculating federal withholding tax
• C)To remit monthly payments for FICA to the federal government
• D)To notify the employee at year-end of the amount of federal tax withheld

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Definitions:

Purchases Returns and Allowances

Transactions involving the return of goods to suppliers or receiving discounts due to issues like damaged goods, leading to a reduction in purchase costs.

Merchandise Inventory

The goods a company holds in stock with the intention of selling them as part of its business operations.

Freight-In

Freight-in refers to the shipping cost associated with getting goods delivered from suppliers to the buyer, often included in the inventory cost of purchased goods.

Sales Returns

Goods returned by buyers after sale due to defects, dissatisfaction, or other reasons, which are deducted from total sales revenue.