Mike Started a Calendar-Year Business on September 1^st of This

question 47

Multiple Choice

Mike started a calendar-year business on September 1^st of this year by paying 12 months of rent on his shop at $650 per month. What is the maximum amount of rent that Mike can deduct this year under each type of accounting method?

• A)$7,800 under the cash method and $7,800 under the accrual method
• B)$2,600 under the cash method and $7,800 under the accrual method
• C)$7,800 under the cash method and $2,600 under the accrual method
• D)$2,600 under the cash method and $2,600 under the accrual method
• E)$2,600 under the cash method and zero under the accrual method

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Definitions:

Class

A system of ordering society whereby people are divided into sets based on perceived social or economic status.

Category

A group or category of individuals or objects that are considered together because of similar attributes they possess.

Fundamental Attribution Error

The tendency for observers to overemphasize dispositional or personality-based explanations for behaviors observed in others while underemphasizing situational explanations.

Success

The achievement of a set goal, objective, or desired outcome.