Match the Proper Deduction Method with the Correct Expenditures

question 23

Multiple Choice

Match the proper deduction method with the correct expenditures.
-Hobby loss

• A)Capitalized and amortized over a number of accounting periods
• B)Expensed in the period incurred
• C)Not deductible
• D)Can be capitalized and amortized or deductible depending on the amount of the expenditure

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Definitions:

Units

Basic measures or quantities of product or service in business, used in accounting and production.

Least-Squares Regression Method

Least-Squares Regression Method is a statistical technique used to determine the line of best fit by minimizing the sum of the squares of the differences between the observed and predicted values.

Cost Behavior

The study of how specific costs respond to changes in the level of business activity, categorized into fixed, variable, and mixed costs.

High-Low Method

A technique used in cost accounting to estimate fixed and variable costs based on the highest and lowest levels of activity.