Final answer:
The statement is False, as employees may need to recognize the value of the unsold donuts provided by Fresh Bakery as taxable gross income, regardless of the bakery's costs.
Step-by-step explanation:
The statement "Fresh Bakery often has unsold donuts at the end of the day.
The bakery allows employees to take the leftovers home.
The employees are not required to recognize gross income because the bakery does not incur any additional cost." is False.
According to tax laws, the value of goods or services provided by an employer to an employee can be considered taxable income, regardless of whether the employer incurs additional costs in providing those goods.
This means that even though Fresh Bakery does not incur additional costs, employees may still need to recognize the value of the donuts as gross income.