Riva Borrows $10,000 That She Intends to Use for Purchasing

question 1775

Multiple Choice

Riva borrows $10,000 that she intends to use for purchasing supplies for her business. She temporarily deposits the funds in her personal checking account. Prior to the deposit, the checking account held $40,000 of personal funds. Riva books a vacation for $6,000 and writes a check to the travel agency from her personal account. Later in the month, the business supplies bill arrives and Riva writes a check for $10,000 from the personal account. With respect to the interest expense on the $10,000 loan,

• A) 20 percent will be treated as trade or business expense.
• B) it will all be treated as personal expense.
• C) 60 percent will be treated as personal interest expense and 40 percent as trade or business expense.
• D) it will all be treated as trade or business expense.

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Definitions:

Independent Variable

Factor that is manipulated by an experimenter or used to predict the dependent variable.

Religious Environments

Settings or communities wherein activities, practices, and beliefs focused on a shared faith or religious devotion predominate.

Consumption of Alcohol

The drinking or intake of alcoholic beverages, which can range from moderate to heavy use, potentially leading to addiction or health issues.

Psychological Disorders

Mental disorders characterized by patterns of behavior or thought that are significantly disruptive to an individual's functioning and well-being.