Compensation for Sickness or Injury Which Is Exempt from Income

question 29

Multiple Choice

Compensation for sickness or injury which is exempt from income includes:

• A)Unemployment compensation payments.
• B)Damages (other than punitive damages)received as a result of personal physical injuries or sickness.
• C)Wages for sick days paid by an employer.
• D)All of these.

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Definitions:

Additional Paid-in Capital

The amount of money that shareholders have paid in excess of the par value of the shares; this can occur when shares are initially sold or during subsequent capital injections.

Preferred Stock

A class of ownership in a corporation that typically provides dividend payments before dividends are issued to common stockholders, often with no voting rights.

Common Stock

A type of security that signifies ownership within a corporation, known as corporate equity ownership.

Cumulative Feature

A characteristic of preferred stock that entitles shareholders to receive dividends that were omitted in the past before any dividends can be issued to common stockholders.