After a Business Meeting with a Prospective Client Holly Took

question 26

Multiple Choice

After a business meeting with a prospective client Holly took the client to dinner and the theatre.Holly paid $290 for the meal and $250 for the theatre tickets,amounts that were reasonable under the circumstances.What amount of these expenditures can Holly deduct as a business expense?

• A) $540
• B) $415
• C) $270
• D) None unless Holly discussed business with the client during the meal and the entertainment.
• E) None - the meals and entertainment are not deductible except during travel.

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Definitions:

Redeemed

A term referring to the process of exchanging a financial instrument, such as a bond or coupon, for cash or its equivalent value.

Product Warranty

A promise to repair or replace a product if it fails within a specified period.

Warranty Repairs

Services provided to fix or replace defective products at no additional charge, covered under a product's warranty terms.

Adjusting Entry

A journal entry made in accounting records to update the balances of accounts and reflect the true financial status at the end of an accounting period.