Various Criteria Will Disqualify the Deduction of a Business or Investment

question 104

Multiple Choice

Various criteria will disqualify the deduction of a business or investment related expenditure.Which of the following criteria will not disqualify a business or investment expenditure?

• A)Capital expenditure
• B)Expenses related to tax-exempt income
• C)Expenses are not incurred annually.
• D)Expenses are illegal or in violation of public policy.

---

Definitions:

Fixed Manufacturing Overhead

Costs associated with manufacturing that do not vary with the level of production, such as salaries of managers, rent of the factory, and depreciation of manufacturing equipment.

Budget Variance

The difference between budgeted figures for revenue or spending and the actual amounts incurred.

Machine-Hours

A measure of production time, calculated by the number of hours machines are operating as part of the manufacturing process.

Actual Output

The actual quantity of goods or services produced by a company within a specified timeframe.