Which of the following is false?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Mrs. Y, wife of a deceased employee, received financial benefits voluntarily voted upon by the Board of Directors of the employer-company in recognition of her husband’s long and loyal service and primarily to help her meet financial needs. Which of the following is false?
A. Mrs. Y is not subject to income tax on the financial benefits she received because there were no services rendered by Mrs. Y.
B. Mrs. Y is subject to income tax on the financial benefits she received because such amount is in consideration of her deceased husband’s employment.
C. The amount is not considered as income of the deceased employee because the giving was not in payment for services rendered.
D. A and B
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