Jamison Is Self-Employed and He Works Out of an Office

question 66

Multiple Choice

Jamison is self-employed and he works out of an office in his home.After allocating the home-related expenses between the business office and the rest of the home, which of the following statements regarding the sequence of deductibility of the expenses allocated to the home office business use is correct?

• A)Depreciation expense, other expenses, property taxes and interest expense.
• B)Other expenses, depreciation expense, property taxes and interest expense.
• C)Property taxes and interest expense, depreciation expense, other expenses.
• D)Other expenses, property taxes and interest expense, depreciation expense.
• E)None of the choices are correct.

---

Definitions:

Perpetual Inventory

An inventory management system that continuously updates the quantity and value of inventory in real-time with every sale or purchase.

GAAP

Known as Generally Accepted Accounting Principles, these are the standard rules and guidelines followed in accounting for financial reporting.

IFRS

International Financial Reporting Standards, a set of global accounting guidelines that govern how company's financial statements are prepared.

Periodic Inventory System

An inventory accounting system where updates to inventory levels are made at specified periods rather than continuously.