Heather Is a Full-Time Employee of the Drake Company and Participates

question 30

Multiple Choice

Heather is a full-time employee of the Drake Company and participates in the company's flexible spending plan that is available to all employees. Which of the following is correct?

• A) Heather reduced her salary by $1,200, actually spent $1,500, and received only $1,200 as reimbursement for her medical expenses. Heather's gross income will be reduced by $1,500.
• B) Heather reduced her salary by $1,200, and received only $900 as reimbursement for her actual medical expenses. She is not refunded the $300 remaining balance, but her gross income is reduced by $1,200.
• C) Heather reduced her salary by $1,200, and received only $800 as reimbursement for her medical expenses. She is not refunded the $400. Her gross income is reduced by $800.
• D) Heather reduced her salary by $1,200, and received only $900 as reimbursement for her medical expenses. She forfeits the $300. Her gross income is reduced by $300.
• E) None of these.

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Definitions:

Sidewalk

A paved or otherwise improved path for pedestrian use, typically located along the side of a road.

Proximate Cause

The primary cause of an injury or damage in law, without which the injury would not have occurred.

Actual Cause

Also known as "cause in fact," it refers to the determination that a defendant's actions are the direct cause of the claimant's injury.

Electrical Power Lines

Cables and wires used to transmit electricity from power plants to homes, businesses, and other end-users.