In Relation to the Expense Associated with the Creation of an Allowance

question 44

Multiple Choice

In relation to the expense associated with the creation of an allowance for doubtful debts,the Australian Taxation Office:

• A) Never allows a deduction for taxation purposes for that amount.
• B) Allows a deduction for taxation purposes for that amount when it is recognised as an expense.
• C) Allows a deduction for taxation purposes immediately.
• D) Allows a deduction for taxation purposes only when there is a bad debt written off against a debtors account.
• E) Allows a deduction for taxation purposes if the probability of the debt not being repaid is greater than 50 per cent.

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Definitions:

Personal Selling Process

A sequence of steps a salesperson follows to engage a potential customer, demonstrating how their product or service can meet the customer's needs, ultimately leading to a sale.

Prospecting

The process of searching for potential customers, clients, or buyers in order to develop new business.

Closing

The final step in executing a real estate transaction or sale where ownership is transferred from seller to buyer, or in sales, the process of concluding a sale or sealing a deal.

Personal Selling Process

A direct method of selling in which sales representatives personally meet with potential customers to present products or services, aiming to engage and convert them into buyers.