APA FPC-Remote Exam With Confidence Using Practice Dumps

Gross pay:$15 × 40 = $600.00

401(k) deduction:$50.00(Pre-tax)

FITW, Social Security (6.2%), Medicare (1.45%)applied

Using the IRS Wage Bracket Method, net pay is $651.45

References:

IRS Publication 15-T (Federal Income Tax Withholding Tables)

Comprehensive and Detailed Explanation:Business transactions are classified usingfive main types of accounts:

Asset– Resources owned (e.g., cash, equipment, accounts receivable).

Liability– Amounts owed (e.g., payroll taxes, loans).

Expense– Costs incurred to operate the business (e.g., payroll expenses).

Revenue– Income earned (e.g., sales, service fees).

Equity– Owner’s interest in the business (e.g., retained earnings).

Option A is incorrectbecause "Inventory" is atype of asset, not a separate category.

Option C is incorrectbecause "Cash" is asubcategory of assets, not a primary account type.

Option D is incorrectbecause "Net Income" is the result ofrevenues minus expenses, not a separate account category.

Workers’ compensation benefits are tax-exempt if they are paid for work-related injuries or illnesses.

If payments are received for non-work-related illnesses (B), they become taxable.

Amounts that do not exceed federal or state limits (C & D) remain tax-exempt.

References:

IRS Publication 525 (Taxable and Nontaxable Income)