Which of the Following Is a True Statement

question 71

Multiple Choice

Which of the following is a true statement?

• A)Meals are never deductible as a business expense.
• B)An employer can only deduct half of any meals provided to employees.
• C)The cost of business meals must be reasonable.
• D)A taxpayer can only deduct a meal for a client if business is discussed during the meal.
• E)None of the choices are true.

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of the materials and labor directly involved in creating the product.

Fiscal Year

A one-year period that companies and governments use for financial reporting and budgeting purposes, which might not align with the calendar year.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to individual units of production, based on direct labor hours, machine hours, or any other measurable activity.

Factory Overhead

All indirect costs associated with the manufacturing process, including maintenance, electricity, and supervisory salaries.