Holly Took a Prospective Client to Dinner, and After Agreeing

question 105

Multiple Choice

Holly took a prospective client to dinner, and after agreeing to a business deal, they went to the theater. Holly paid $290 for the meal andseparately paid $250 for the theater tickets, amounts that were reasonable under the circumstances. What amount of these expenditures can Holly deduct as a business expense?

• A)$540
• B)$270
• C)$145
• D)$125
• E)None-the meals and entertainment are not deductible except during travel.

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Definitions:

Substitute Goods

Products or services that can replace or substitute each other in use, where an increase in the price of one leads to an increase in demand for the other.

Supply Curve

A graphical representation that shows the relationship between the price of a good and the quantity supplied, illustrating how changes in price influence supplier behaviour.

Supply Curve

A graphical depiction that shows the relationship between the price of a good or service and the quantity of that good or service that suppliers are willing and able to provide, at given prices.

Supply Curve

A graphical representation showing the relationship between the quantity of goods that producers are willing to sell and the price of those goods.