During the Current Year, Lucy, Who Has a Sole Proprietorship

question 2136

Essay

During the current year, Lucy, who has a sole proprietorship, pays legal and accounting fees for the following: What amount is deductible for AGI?

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Definitions:

Matching Concept

An accounting principle that requires the expenses to be matched with the revenues they helped to generate in the same accounting period.

Cash Is Received

The acquisition of monetary funds through various means, such as sales, financing, or donations.

Accrued

Refers to amounts that are recognized in the financial statements before the cash transactions occur, representing liabilities for goods and services received but not yet paid.

Routine Entry

Repeated and standard accounting entries made for recurring transactions within a business's financial records.