Jenna Leigh Is Employed as a Receptionist for a CPA

question 45

Multiple Choice

Jenna Leigh is employed as a receptionist for a CPA firm, but on evenings and weekends, she bakes wedding cakes. In each of the past four years, Jenna's baking activity resulted in a net profit. This year, the activity generated a $720 net loss. Which of the following statements is true?

• A) The legal presumption is that Jenna's $720 loss is a business loss.
• B) The legal presumption is that Jenna's $720 loss is a nondeductible hobby loss.
• C) Jenna must include the revenues from her baking activity in gross income but can't deduct any of her related expenses.
• D) Jenna is allowed to report her $720 loss as an itemized deduction.

Identify strategies to mitigate agency costs.

Understand the principle of decentralizing decision-making based on information distribution.

Grasp the concept of monitoring and its importance for the principal in evaluating and incentivizing agent performance.

Understand the concept of incentive conflicts and how they affect organizational dynamics.

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Definitions:

Hardiness

A disposition marked by commitment, challenge, and control that is purportedly associated with strong stress resistance.

Burnout

A state of physical, emotional, and mental exhaustion caused by prolonged stress, typically in the workplace.

Absenteeism

The practice of regularly staying away from work or school without good reason, often measured to assess employee or student engagement and satisfaction.

Chronic Job Stress

Persistent stress experienced over a prolonged period due to work-related factors, leading to negative impacts on health and well-being.