Which of the Following Is Correct

question 83

Multiple Choice

Which of the following is correct?

• A)Employee discounts are always included in gross income.
• B)Employee discounts of up to 20 percent may be taken on personal property held for investment.
• C)Employee discounts are not tax-free if they exceed the employer's gross markup for merchandise.
• D)Tax-free employee discounts include discounts in lines of business in which the employee does not work.

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Definitions:

FVE Method

Refers to the Fair Value Evaluation method, a technique for assessing an asset's worth at its current market value.

Consolidated Net Income

The total amount of net income earned by a parent company and its subsidiaries, after intercompany transactions have been eliminated.

Equity Method

An accounting technique used by a company to record its investment in another company where it has significant influence but not full control, usually through the ownership of 20-50% of the voting stock.

Investment Revenue

Income earned from various forms of investments like stocks, bonds, and real estate properties.