In Order to Deduct a Portion of the Cost of a Business

question 11

Multiple Choice

In order to deduct a portion of the cost of a business meal which of the following conditions must be met?

• A) A client (not a supplier or vendor) must be present at the meal.
• B) The taxpayer or an employee must be present at the meal.
• C) The meal must occur on the taxpayer's business premises.
• D) None of the choices is a condition for the deduction.
• E) All of the choices are conditions for a deduction.

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Definitions:

Financial Statements

Papers that offer a summary of a corporation's fiscal health, comprising the balance sheet, income statement, and cash flow statement.

SEC

The U.S. Securities and Exchange Commission, a regulatory body tasked with protecting investors, maintaining fair and orderly functioning of securities markets, and facilitating capital formation.

10-K Report

An annual report filed by publicly traded companies in the U.S., detailing comprehensive summaries of financial performance mandated by the SEC.

LIFO Liquidation

The process of reducing inventory that has been accounted for using the Last-In, First-Out method, potentially affecting cost of goods sold and taxes.