Question 1

Flexible spending accounts allow employees to set aside before-tax dollars for medical and dependent care expenses.

Accepted Answer

A) True 
 B)False

Question 2

Brandy graduated from Vanderbilt with her bachelor's degree recently. She works for Walton & Company CPAs. The firm pays her tuition ($8,000 per year) for her so that she can receive her MBA. How much of the $8,000 tuition benefit does Brandy need to include in her income?

Accepted Answer

$2,750.
Explanation:...

Question 3

The date on which stock options are no longer subject to forfeiture is called the vesting date.

Accepted Answer

A) True 
 B)False

Question 4

Cornhusker Bank reimburses employees for dues to the local bankers association. The reimbursement is includible in the employee's income.

Accepted Answer

A) True 
 B)False

Question 5

Employees may exclude from income items such as occasional theatre tickets, t-shirts, or a Thanksgiving turkey.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is true regarding the $1,000,000 limit on covered employees for publicly traded companies?

Accepted Answer

A)  The limitation applies to all employees.
B)  The limitation applies to all officers.
C)  The limitation applies only to the CEO and three other highest compensated officers.
D)  The limitation applies only to the CEO and three other highest compensated officers, not including the CFO.E) A) and B)
F) A) and C)

Question 7

Kevin is the financial manager of Levingston BMW. The shop allows employees to purchase up to two vehicles at a discount. Levingston's average gross profit percentage is 15%. This year Kevin purchased a 530 model and a new M3. 
What amount must Kevin include in income?

Accepted Answer

A)  $0
B)  $2,500
C)  $2,950
D)  $22,000E) A) and B)
F) A) and C)

Question 8

Which of the following is false regarding dependent care expenses?

Accepted Answer

A)  Up to $5,000 of reimbursed expenses can qualify.
B)  Employers may discriminate among employees.
C)  Dependent children under 13 qualify.
D)  Spouses who are physically or mentally unable to care for themselves qualify.E) A) and B)
F) A) and C)

Question 9

Annika's employer provides each employee with up to $200 of monthly vouchers for public transportation. What is the amount that Annika must include into income with respect to her benefit in 2016?

Accepted Answer

$0
Explanation: $2,400 benefit...

Question 10

Lina, a single taxpayer with a 35 percent marginal tax rate, desires health insurance. The health insurance would cost Lina $8,000 to purchase if she pays for it herself (Lina's AGI is too high to receive any tax deduction for the insurance as a medical expense). Lina's employer has a 30 percent marginal tax rate. What is the maximum amount of before-tax salary Lina would give up to receive health insurance? (Round your answer to the nearest whole number)

Accepted Answer

$12,308
Ex...

Question 11

Maren received 10 NQOs (each option gives her the right to purchase 10 shares of stock for $8 per share)  at the time she started working when the stock price was $6 per share. When the share price was $15 per share, she exercised all of her options. Eighteen months later she sold all of the shares for $20 per share. What is the amount of Maren's bargain element?

Accepted Answer

A)  $0.
B)  $700.
C)  $900.
D)  $1,500.
E)  None of these.F) B) and D)
G) None of the above

Question 12

Tom recently received 2,000 shares of restricted stock from his employer, Independence Corporation, when the share price was $10 per share. Tom's restricted shares vested three years later when the market price was $14. Tom held the shares for a little more than a year and sold them when the market price was $12. What is the amount of Tom's income or loss on the sale?

Accepted Answer

A)  $0
B)  $2,000 loss
C)  $4,000 gain
D)  $4,000 lossE) None of the above
F) A) and B)

Question 13

Employees complete a Form W-2 to specify their income tax withholding.

Accepted Answer

A) True 
 B)False

Question 14

Taxable fringe benefits include automobile allowances, gym memberships, and personal use tickets to the theatre or sporting events.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following isn't reported on the Form W-2?

Accepted Answer

A)  The employee's taxable salary and wages.
B)  Annual Federal and state withholding information.
C)  Indication as to whether an employee had more than one employer during the year.
D)  Annual amount of Social Security and Medicare tax withholding information.E) A) and B)
F) None of the above

Question 16

Which of the following does not qualify as a "for the convenience of the employer" nontaxable fringe benefit?

Accepted Answer

A)  The fair market value of the rent of an apartment manager living on the premises.
B)  An overtime meal provided to an employee while working late.
C)  A meal provided by a hospital to residents during their shift.
D)  A company picniC.The value of a company picnic is a nontaxable fringe benefit, but it is not a "for the convenience of the employer" benefit.E) All of the above
F) B) and D)

Question 17

When a publicly traded CEO's salary exceeds $1,000,000, the employee _____ taxed on the entire amount, and the employer ______ allowed a deduction on the entire amount.

Accepted Answer

A)  is; is
B)  is; is not
C)  is not; is
D)  is not; is notE) B) and D)
F) A) and B)

Question 18

Which of the following is true regarding stock options?

Accepted Answer

A)  A loss is realized when stock options lapse.
B)  There is typically no tax effect on the grant date.
C)  Income recognized on the exercise date is greater for incentive stock options than nonqualified options.
D)  The bargain element on a nonqualified option is taxed to employees at capital gain rates.E) A) and D)
F) None of the above

Question 19

Which of the following is false regarding a section 83(b)  election?

Accepted Answer

A)  The election freezes the value of the employee's compensation as of the grant date.
B)  The election is an important tax planning tool if the stock is expected to increase in value.
C)  The election must be made within 30 days of the grant date.
D)  If an employee leaves before the vesting date, any loss is limited to $3,000.E) All of the above
F) C) and D)

Question 20

Which of the following statements regarding compensation is false?

Accepted Answer

A)  Wages are usually paid by the hour.
B)  Salary is usually a form of fixed compensation.
C)  Bonuses are a form of compensation obtained if certain criteria are met.
D)  Bonuses paid within 2½ months of year-end are included in employee's compensation in the year they were earneD.Employees include compensation into income in the year received.E) A) and B)
F) A) and C)

Exam 12: Compensation

Correct Answer
verified
$12,308
Ex...
View Answer

Flexible spending accounts allow employees to set aside before-tax dollars for medical and dependent care expenses.

Correct Answer
verified

Correct Answer
verified

Taxable fringe benefits include automobile allowances, gym memberships, and personal use tickets to the theatre or sporting events.

Correct Answer
verified

Kevin is the financial manager of Levingston BMW. The shop allows employees to purchase up to two vehicles at a discount. Levingston's average gross profit percentage is 15%. This year Kevin purchased a 530 model and a new M3. What amount must Kevin include in income?

Correct Answer
verified

Which of the following is false regarding dependent care expenses?

Correct Answer
verified

Which of the following is false regarding a section 83(b) election?

Correct Answer
verified

The date on which stock options are no longer subject to forfeiture is called the vesting date.

Correct Answer
verified

Which of the following isn't reported on the Form W-2?

Correct Answer
verified

Which of the following does not qualify as a "for the convenience of the employer" nontaxable fringe benefit?

Correct Answer
verified

Brandy graduated from Vanderbilt with her bachelor's degree recently. She works for Walton & Company CPAs. The firm pays her tuition ($8,000 per year) for her so that she can receive her MBA. How much of the $8,000 tuition benefit does Brandy need to include in her income?

Correct Answer
verified
$2,750.
Explanation:...
View Answer

Which of the following statements is true regarding the $1,000,000 limit on covered employees for publicly traded companies?

Correct Answer
verified

Correct Answer
verified

Which of the following statements regarding compensation is false?

Correct Answer
verified

Cornhusker Bank reimburses employees for dues to the local bankers association. The reimbursement is includible in the employee's income.

Correct Answer
verified

Annika's employer provides each employee with up to $200 of monthly vouchers for public transportation. What is the amount that Annika must include into income with respect to her benefit in 2016?

Correct Answer
verified
$0
Explanation: $2,400 benefit...
View Answer

Which of the following is true regarding stock options?

Correct Answer
verified

When a publicly traded CEO's salary exceeds $1,000,000, the employee _ taxed on the entire amount, and the employer __ allowed a deduction on the entire amount.

Correct Answer
verified

Employees complete a Form W-2 to specify their income tax withholding.

Correct Answer
verified

Employees may exclude from income items such as occasional theatre tickets, t-shirts, or a Thanksgiving turkey.

Correct Answer
verified

Exam 12: Compensation

Correct Answerverified$12,308Ex...View AnswerShow Answer

Flexible spending accounts allow employees to set aside before-tax dollars for medical and dependent care expenses.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Taxable fringe benefits include automobile allowances, gym memberships, and personal use tickets to the theatre or sporting events.

Correct AnswerverifiedShow Answer

Kevin is the financial manager of Levingston BMW. The shop allows employees to purchase up to two vehicles at a discount. Levingston's average gross profit percentage is 15%. This year Kevin purchased a 530 model and a new M3. What amount must Kevin include in income?

Correct AnswerverifiedShow Answer

Which of the following is false regarding dependent care expenses?

Correct AnswerverifiedShow Answer

Which of the following is false regarding a section 83(b) election?

Correct AnswerverifiedShow Answer

The date on which stock options are no longer subject to forfeiture is called the vesting date.

Correct AnswerverifiedShow Answer

Which of the following isn't reported on the Form W-2?

Correct AnswerverifiedShow Answer

Which of the following does not qualify as a "for the convenience of the employer" nontaxable fringe benefit?

Correct AnswerverifiedShow Answer

Brandy graduated from Vanderbilt with her bachelor's degree recently. She works for Walton & Company CPAs. The firm pays her tuition ($8,000 per year) for her so that she can receive her MBA. How much of the $8,000 tuition benefit does Brandy need to include in her income?

Correct Answerverified$2,750.Explanation:...View AnswerShow Answer

Which of the following statements is true regarding the $1,000,000 limit on covered employees for publicly traded companies?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements regarding compensation is false?

Correct AnswerverifiedShow Answer

Cornhusker Bank reimburses employees for dues to the local bankers association. The reimbursement is includible in the employee's income.

Correct AnswerverifiedShow Answer

Annika's employer provides each employee with up to $200 of monthly vouchers for public transportation. What is the amount that Annika must include into income with respect to her benefit in 2016?

Correct Answerverified$0Explanation: $2,400 benefit...View AnswerShow Answer

Which of the following is true regarding stock options?

Correct AnswerverifiedShow Answer

When a publicly traded CEO's salary exceeds $1,000,000, the employee _____ taxed on the entire amount, and the employer ______ allowed a deduction on the entire amount.

Correct AnswerverifiedShow Answer

Employees complete a Form W-2 to specify their income tax withholding.

Correct AnswerverifiedShow Answer

Employees may exclude from income items such as occasional theatre tickets, t-shirts, or a Thanksgiving turkey.

Correct AnswerverifiedShow Answer

Correct Answer
verified
$12,308
Ex...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
$2,750.
Explanation:...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
$0
Explanation: $2,400 benefit...
View Answer

Correct Answer
verified

When a publicly traded CEO's salary exceeds $1,000,000, the employee _ taxed on the entire amount, and the employer __ allowed a deduction on the entire amount.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified