Which Statement Relating to Workers' Compensation Insurance Is Incorrect

question 10

Multiple Choice

Which statement relating to workers' compensation insurance is incorrect?

• A) The premium is deducted from employees' salaries and wages.
• B) It is mandatory for all employers to obtain this cover.
• C) The premium is based on a percentage of the total wages and salaries bill for the coming year.,
• D) It relates to an insurance scheme, imposed by law, whereby the employer purchases insurance which may be used to compensate employees for job related injuries and loss of wages.

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Definitions:

Income Statement

A financial document that reports a company's revenues, expenses, and profits or losses over a specific period.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products based on a predefined formula, typically involving estimated costs and activity levels.

Machine-Hours

A measure of the hours a machine is operated in the production process, often used as a basis for allocating overhead costs.

Unused Capacity

The portion of a business's potential production that is not being used; it represents the difference between what a company can produce and what it is currently producing.