Clyde Operates a Sole Proprietorship Using the Cash Method

question 48

Multiple Choice

Clyde operates a sole proprietorship using the cash method. This year Clyde made the following expenditures:
$480 to U.S. Bank for 12 months of interest accruing on a business loan from September 1ˢᵗ of this year through August 31ˢᵗ of next year.
$600 for 12 months of property insurance beginning on July 1 of this year.
What is the maximum amount Clyde can deduct this year?

• A) $760
• B) $600
• C) $480
• D) $160
• E) $360

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Definitions:

Moral Development

The process through which individuals learn and apply codes of conduct, discerning right from wrong in various social contexts.

Androgyny

The presence of masculine and feminine characteristics in the same person.

Identification Theory

A concept in psychology which describes how children assume the characteristics of the same-sex parent by identifying with them.

Behaviorism

A theory in psychology that focuses on observable behaviors and disregards unobservable mental processes.