Which of the Following Is Likely to Be a Business

question 47

Multiple Choice

Which of the following is likely to be a business expense fully deductible in the current year?

• A)Salaries in excess of the industry average paid to attract talented employees.
• B)The cost of employee uniforms that can be adapted to ordinary personal wear.
• C)A speeding fine paid by a trucker who was delivering a rush order.
• D)The cost of a three-year subscription to a business publication.
• E)None of the choices are likely to be deductible.

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Definitions:

Merchandising Business

A type of business that purchases goods for resale to customers, aiming to sell the goods at a higher price than the cost to earn a profit.

Service Business

A business providing services rather than products to customers.

Statement of Owner's Equity

A financial document showing the changes in the equity of a business over a specific period, including investments, withdrawals, and net income or loss.

Merchandise Business

A type of business that purchases finished goods for resale, making profit through the buying and selling process.