For Purposes of Determining Gross Income, Which of the Following

question 91

Multiple Choice

For purposes of determining gross income, which of the following is true?

• A)A mechanic completed repairs on an automobile during the year and collects money from the customer.The customer was not satisfied with the repairs and sued the mechanic for a refund.The mechanic can defer recognition of the income until the suit has been settled.
• B)A taxpayer who finds a wallet full of money is required to recognize income even though someone may eventually ask for the return of the money.
• C)Embezzlement proceeds are not included in the embezzler's gross income because the embezzler has an obligation to repay the owner.
• D)All of these are false.
• E)All of these are true.

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Definitions:

Availability Heuristic

A cognitive shortcut where individuals estimate the likelihood of an event based on how easily examples come to mind, which can lead to biases.

9/11 Terrorist Tragedy

A series of coordinated terrorist attacks by the Islamic terrorist group al-Qaeda against the United States on the morning of September 11, 2001.

Air Travel Risks

Potential dangers or health concerns associated with flying, including deep vein thrombosis, exposure to radiation, and the spread of infectious diseases.

Representativeness Heuristic

A cognitive shortcut where the likelihood of an object belonging to a category is judged based on how similar it is to one's mental representation of that category.