Harold Biggs Is Provided with $200,000 Coverage Under His Employer's

question 52

Multiple Choice

Harold Biggs is provided with $200,000 coverage under his employer's group-term life insurance plan. Which of the following statements is true?

• A) The value of the cost of $50,000 coverage is included in Harold's gross income.
• B) The value of the cost of $150,000 coverage is included in Harold's gross income.
• C) The value of the cost of $200,000 coverage is included in Harold's gross income.
• D) Harold's life insurance coverage is a nontaxable fringe benefit.

Understand the impact of the perpetual inventory system on financial transactions and statements.

Recognize the accounting treatment for trade discounts and purchase discounts.

Identify the ownership and responsibility for freight costs in FOB shipping point and FOB destination terms.

Comprehend the role and recording of sales tax in accounting entries.

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Definitions:

Theft

An act of stealing; specifically, the illegal taking and removing of personal property with intent to deprive the rightful owner of it.

FIFO

"First In, First Out," an inventory valuation method where the first items purchased or produced are the first ones sold, impacting the value of remaining inventory.

Gross Profit

The financial measure obtained by subtracting the cost of goods sold from total sales revenue.

Ending Inventory

The worth of products ready for sale at the close of a financial period, determined by adding acquisitions to the initial stock and then deducting the expense of the goods that were sold.