OOA_2_Rick - (OOA-2 Object-Oriented Analysis By Rick Birney...

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ACCOUNTING 305 EXAM II REVIEWQUESTIONS True/False Indicate whether the statement is true or false. ____ 1. A gift made by an employer to the employee can be excluded from the employee’s gross income. ____ 2. Ed died while employed by Violet Company. His wife collected $50,000 on a group-term life insurance policy that Violet provided its employees, and $5,000 of accrued salary Ed had earned prior to his death. Ed’s wife is not required to recognize any income from the receipt of the $55,000. ____ 3. Amber received an academic scholarship that was to pay her tuition, room and board, and books. Amber is required to recognize gross income from the scholarship proceeds. ____ 4. In December 2006, Tonya, a cash basis taxpayer, received a $3,000 cash scholarship for the Spring semester of 2007. In January 2007, she used the $3,000 to pay her college tuition. Tonya must include the $3,000 in her 2006 gross income, but she is allowed a $3,000 deduction in 2007. ____ 5. Graduate teaching assistantships are generally scholarships and therefore are excluded from gross income. ____ 6. In 2006, Joyce was in an automobile accident and suffered physical injuries. The accident was caused by Ramon’s negligence. In 2007, Joyce collected from the insurance company. She received $15,000 for loss of income, $5,000 punitive damages, and $8,000 for medical expenses which she had not deducted on her 2006 tax return. As a result of the above, Joyce’s 2007 gross income is increased by $28,000. ____ 7. Worker’s compensation benefits are excluded from gross income. ____ 8. Sam received $25,000 of salary, interest, and dividends in 2006. He also received $10,000 as worker’s compensation benefits. Sam must include either 50% or 85% of the worker’s compensation benefits in gross income for 2006. ____ 9. Sarah’s employer pays the hospitalization insurance premiums for a policy that covers all employees and their family members. The premiums for Sarah’s medical coverage can be excluded from her gross income, but the premiums for her family members must be included in her gross income. ____ 10. Meg’s employer carries insurance on its employees that will pay an employee his or her regular salary while the employee is away from work due to illness. Meg was absent from work for two months as a result of a kidney infection. Meg’s employer’s insurance company paid Meg’s regular salary of $8,000 while she was away from work. Meg is required to include the sick pay in her gross income. ____ 11. Alberta works for a company with only 25 employees. Her employer contributed to her health savings account (HSA). Alberta is not required to include the employer’s contribution in gross income, but withdrawals to pay medical expenses are taxable. ____ 12.
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This note was uploaded on 06/19/2008 for the course CIS 235 taught by Professor Birney during the Fall '07 term at ASU.

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OOA_2_Rick - (OOA-2 Object-Oriented Analysis By Rick Birney...

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