Kristine Is the Controller of Evans Company

question 66

Multiple Choice

Kristine is the controller of Evans Company. Evans provides all management level employees with medical insurance through a self-insured plan. During the current year, Kristine has $2,650 in medical expenses reimbursed by the plan. The income tax effect of the reimbursements Kristine receives is:
I.Kristine excludes the value of the reimbursement.
II.Kristine includes $2,650 in her gross income.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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