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:

Iron

A chemical element with symbol Fe and atomic number 26, known for its high strength and magnetic properties.

Limiting Reactant

The reactant in a chemical reaction that limits the amount of product that can be formed because it is used up first.

Theoretical Yield

The maximum amount of product that can be generated from a given amount of reactants in a chemical reaction, under ideal conditions.

Limiting Reactant

The reactant in a chemical reaction that limits the amount of product that can be formed; the reaction stops when all of this reactant is consumed.