Which of the Following Statements Regarding a Coverdell Education Savings

question 106

Multiple Choice

Which of the following statements regarding a Coverdell Education Savings Account CESA) is incorrect?

• A)In order to be tax-free,distributions must be used exclusively to pay the qualified education expenses of the beneficiary.
• B)A person can contribute to only one CESA during each tax year.
• C)Contributions to a CESA are not tax-deductible.
• D)Any person can contribute to a CESA,even if he or she is not related to the beneficiary.

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Definitions:

Activity-Based Costing

A pricing approach that discerns various tasks within a business and allocates the expenses of each activity to all goods and services based on their real usage.

Breakeven Point

The point at which total costs and total revenues are equal, meaning a business neither makes a profit nor incurs a loss.

Unit Level

A classification in costing referring to activities or costs that are directly associated with the units of product produced.

Environmental Management Accounting

The management of environmental and cost information to improve business decisions related to environmental performance.