A Is Employed in Chicago as a Stewardess for AMX

question 51

Multiple Choice

A is employed in Chicago as a stewardess for AMX Airlines.The airline has a policy that allows employees to fly without charge on a standby basis only.In September, A flies from Chicago to Los Angeles to visit her father.The value of the ticket is $400.B is employed as a manager of the HMO Hotel in Chicago.HMO has a reciprocal agreement with the DEF Hotel in Boston that allows employees of both hotels to stay free of charge at either hotel provided space is available.In October, B spends two nights in Boston at the DEF Hotel.The value of the room for the two nights is $350.The tax consequences of these benefits are:

• A)A can exclude the value of the airplane ticket from the gross income and B can exclude the value of the hotel room from gross income.
• B)A must include the value of the airplane ticket in gross income but the value of the hotel room to B is tax-free.
• C)B must include the value of the hotel room in gross income but the value of the airplane ticket to A is tax-free.
• D)A must include the value of the airplane ticket in gross income and B must include the value of the hotel room in gross income.

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Definitions:

Directional Hypothesis

A hypothesis that outlines the anticipated direction of the difference or relationship.

Critical Value

A threshold in a statistical test that defines the boundary for deciding whether an observed statistic is extreme enough to reject the null hypothesis.

Alpha

A threshold value used in hypothesis testing to determine the significance level at which the null hypothesis is rejected in favor of the alternative hypothesis.

Non-directional Hypothesis

A hypothesis that does not predict the specific direction of the difference or relationship, only that one exists.