ACCT M50 PRINCIPLES OF INCOME TAXATION PRACTICE EXAM | FREE SOLVED ANSWERS
What item should not be included in income?
What item should not be included in income?
Multiple Choice
- a. Workers compensation payments.
- b. Jury duty pay
- c. Prizes and awards.
- d. Sick pay
Correct answer: A. Workers’ compensation payments.
Explanation:
- Workers’ compensation payments → Not taxable; excluded from gross income.
- Jury duty pay → Taxable; must be reported as income.
- Prizes and awards → Taxable unless specifically excluded by law (e.g., some scholarships or employee achievement awards).
- Sick pay → Taxable if paid by the employer or through an insurance plan paid by the employer.
- Correct answer: Workers’ compensation payments.
ACCT M50 PRINCIPLES OF INCOME TAXATION PRACTICE EXAM FREE SOLVED ANSWERS