Generally, Deductions for Additions to Reserves for Estimated Future Costs

question 63

Multiple Choice

Generally, deductions for additions to reserves for estimated future costs (e.g., an allowance for estimated warranty costs) are not allowed for Federal income tax purposes because allowing the deduction would:

• A)Result in a mismatching of revenues and expenses.
• B)Violate established public policy.
• C)Violate the all events test and economic performance requirement.
• D)Violate the tax benefit rule.
• E)None of these.

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Definitions:

Emotion-Focused Coping

Attempting to alleviate stress by avoiding or ignoring a stressor and attending to emotional needs related to our stress reaction.

Adaptation-Level Phenomenon

Our tendency to form judgments (of sounds, of lights, of income) relative to a neutral level defined by our prior experience.

Unhealthy Blood Pressure

A condition where the force of the blood against the artery walls is too high or too low, leading to health problems.

Increased Immune System Functioning

Increased immune system functioning denotes an enhancement in the body's ability to defend against pathogens and disease through improved activity or efficiency of immune responses.