An Aspect of the Tax Code That Allows Businesses to Deduct

question 37

Multiple Choice

An aspect of the tax code that allows businesses to deduct from earnings a portion of the cost of the equipment on a yearly basis for a set period of time is called

• A) tax credit.
• B) depreciation.
• C) an adverse impact.
• D) developmental relief.
• E) none of the above.

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Definitions:

Deferral Adjusting Entry

An accounting entry made to defer the recognition of revenue or expenses to a future period.

Unearned Revenue

Money received by an entity for a service or product that has yet to be delivered or completed.

Interest Revenue

Income earned from lending money or from investments in interest-bearing accounts or securities.

Matching Revenue

The accounting principle of recognizing revenue and the related expenses in the same accounting period to accurately report profit.