The Employees of Mauve Accounting Services Are Permitted to Use

question 12

Multiple Choice

The employees of Mauve Accounting Services are permitted to use the copy machine for personal purposes, provided the privilege is not abused.Ed is the president of a civic organization and uses the copier to make several copies of the organization's agenda for its meetings.The copies made during the year would have cost $150 at a local office supply.

• A)Ed must include $150 in his gross income.
• B)Ed may exclude the cost of the copies as a no-additional-cost fringe benefit.
• C)Ed may exclude the cost of the copies only if the organization is a client of Mauve.
• D)Ed may exclude the cost of the copies as a de minimis fringe benefit.
• E)None of these.

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or used up within one year or within the operating cycle, whichever is longer.

Current Liabilities

Current liabilities are financial obligations that a company expects to pay within one year, such as accounts payable, short-term loans, and taxes owed.

Cash Flow

Cash flow is the net amount of cash and cash equivalents being transferred into and out of a business, indicating the organization's liquidity position over a period.

Present Value

The present worth of future monetary amounts or series of cash flows when calculated using a designated interest rate.