Tory Considered Opening a Cupcake Store in Denver

question 60

Multiple Choice

Tory considered opening a cupcake store in Denver.Tory is currently a full-time dentist.After spending $8,600 on a market study,he decided against opening the store on August 1.What is the maximum amount of deduction for the current year attributable to this expenditure?

• A)$0
• B)$5,000
• C)$5,600
• D)$6,800

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Definitions:

Financial Statements

Financial statements are official records that outline the financial activities and condition of a business, entity, or individual, including the balance sheet, income statement, and statement of cash flows.

External Customers

Individuals or entities that purchase goods or services from a business but are not part of the same organization.

Revenue Test

A criterion used to determine whether a particular amount of revenue can be recognized in a company's financial statements.

Profit or Loss Test

An analytical assessment to determine whether a financial transaction or strategy has resulted in financial gain or loss.