©Jason MacConnell 2025 ALL RIGHTS RESERVED.
FPC Chapter 3 Exam Questions With
Correct Answers A+
How does the IRS define gross income? - Answer✔All compensation for services performed
Which of the following benefits is subject to federal income tax?
A. Qualified retirement advice services
B. Qualified moving expense reimbursements
C. Working condition fringes
D. Personal use of a company vehicle - Answer✔Personal use of a company vehicle
All of the following benefits are taxable fringe benefits EXCEPT:
A. prize in company-sponsored sales contest.
B. no-additional-cost services.
C. employer reimbursements at a rate greater than $0.19 per mile for relocation-related mileage.
D. company-provided group-term life insurance in excess of $50,000.00. - Answer✔B. no-
additional-cost services.
All of the following items are taxable compensation EXCEPT:
A. a $40.00 gift card to a department store.
B. severance pay.
C. reimbursement for job-related courses.
D. employer-paid transit passes in excess of $255.00 a month - Answer✔reimbursement for job-
related courses.
Which of the following benefits is subject to federal income tax?
1
FPC Chapter 3 Exam Questions With
Correct Answers A+
How does the IRS define gross income? - Answer✔All compensation for services performed
Which of the following benefits is subject to federal income tax?
A. Qualified retirement advice services
B. Qualified moving expense reimbursements
C. Working condition fringes
D. Personal use of a company vehicle - Answer✔Personal use of a company vehicle
All of the following benefits are taxable fringe benefits EXCEPT:
A. prize in company-sponsored sales contest.
B. no-additional-cost services.
C. employer reimbursements at a rate greater than $0.19 per mile for relocation-related mileage.
D. company-provided group-term life insurance in excess of $50,000.00. - Answer✔B. no-
additional-cost services.
All of the following items are taxable compensation EXCEPT:
A. a $40.00 gift card to a department store.
B. severance pay.
C. reimbursement for job-related courses.
D. employer-paid transit passes in excess of $255.00 a month - Answer✔reimbursement for job-
related courses.
Which of the following benefits is subject to federal income tax?
1
