Adam Repairs Power Lines for the Egret Utilities Company

question 9

Multiple Choice

Adam repairs power lines for the Egret Utilities Company.He is generally working on a power line during the lunch hour.He must eat when and where he can and still get his work done.He usually purchases something at a convenience store and eats in his truck.Egret reimburses Adam for the cost of his meals.

• A)Adam must include the reimbursement in his gross income.
• B)Adam can exclude the reimbursement from his gross income since the meals are provided for the convenience of the employer.
• C)Adam can exclude the reimbursement from his gross income because he eats the meals on the employer's business premises (the truck).
• D)Adam may exclude from his gross income the difference between what he paid for the meals and what it would have cost him to eat at home.
• E)None of the above.

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Definitions:

Bank Statements

Monthly or quarterly documents issued by a bank detailing all transactions in a customer's account.

Cash Dividends

Payments made by a corporation to its shareholders, typically out of its earnings, as a distribution of profits.

Income Statement

An income statement is a financial report that details a company's revenues and expenses over a specific period, culminating in a net income or loss to show the company's financial performance.

Stockholders

Individuals or entities that own shares in a corporation, making them partial owners of the company.