Ronald Is a Cash Method Taxpayer Who Made the Following

question 28

Multiple Choice

Ronald is a cash method taxpayer who made the following expenditures this year. Which expenditure is completely deductible in this period as a business expense?

• A) $4,000 for rent on his office that covers the next 24 months.
• B) $3,000 for a new watch for the mayor to keep "good relations" with city hall.
• C) $2,500 for professional hockey tickets distributed to a customer to generate "goodwill" for his business.
• D) $55 to collect an account receivable from a customer who has failed to pay for services rendered.
• E) None of the choices are completely deductible.

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Definitions:

Adequate

Sufficient to satisfy a requirement or meet a need; satisfactory in quality or quantity.

Multidimensional

Referring to phenomena, concepts, or objects that have several different aspects, components, or layers, making them complex and varied in their characteristics.

Cognitive Process

Mental activities involved in acquiring, processing, and storing knowledge, such as perception, reasoning, and memory.

Biological Process

A process that is vital for the living organism and occurs due to complex interactions among biological systems.