Jenna Leigh Is Employed as a Receptionist for a CPA

question 48

Multiple Choice

Jenna Leigh is employed as a receptionist for a CPA firm,but on evenings and weekends,she bakes wedding cakes.In each of the past four years,Jenna's baking activity resulted in a net profit.This year,the activity generated a $720 net loss.Which of the following statements is true?

• A)The legal presumption is that Jenna's $720 loss is a business loss.
• B)The legal presumption is that Jenna's $720 loss is a nondeductible hobby loss.
• C)Jenna must include the revenues from her baking activity in gross income but can't deduct any of her related expenses.
• D)Jenna is allowed to report her $720 loss as a miscellaneous itemized deduction.

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Definitions:

Random Selection

A method of selecting a sample from a population in a way that gives every member of the population an equal chance of being chosen.

Representative Sample

A subset of a population that closely mirrors the characteristics of the overall population, used in research to draw conclusions about the population as a whole.

Population

a group of individuals of the same species living in the same geographic area at the same time, capable of interbreeding.

Theoretical Perspectives

Frameworks or lenses through which scientists and researchers view, analyze, and interpret phenomena within a field of study.