Which of the Following Business Expense Deductions Is Most Likely

question 9

Multiple Choice

Which of the following business expense deductions is most likely to be unreasonable in amount?

• A)Compensation paid to the taxpayer's spouse in excess of salary payments to other employees.
• B)Amounts paid to a subsidiary corporation for services where the amount is in excess of the cost of comparable services by competing corporations.
• C)Cost of a meal with a former client when there is no possibility of any future benefits from a relation with that client.
• D)All of the choices are likely to be unreasonable in amount.
• E)None of the choices are likely to be unreasonable in amount.

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Definitions:

Relative Size

A perceptual cue that allows the determination of depth and distance by comparing the size of objects with known sizes.

Retinal Disparity

The slight difference in the visual images that each eye perceives because of the different angles in which each eye views the world.

Accommodation

Accommodation in psychology refers to the cognitive process of revising existing cognitive schemas, perceptions, and understanding so that new information can be incorporated.

Interposition

A visual cue in depth perception where one object partially covers another, indicating that the covering object is closer to the observer.