The Phrase "Ordinary and Necessary" Means That an Expense Must

question 67

True/False

The phrase "Ordinary and necessary" means that an expense must be appropriate in and helpful for generating a profit.

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Definitions:

Scarcity

Occurs when the amount people desire exceeds the amount available at a zero price.

Choice

The act of selecting between two or more possibilities, often present in decision-making processes.

Economics

The study of how people use their scarce resources to satisfy their unlimited wants

Physical Capital

Manufactured items used to produce goods and services; includes new plants and new equipment.