Davis Owns and Operates a Convenience Store on the North

question 78

Multiple Choice

Davis owns and operates a convenience store on the north side of the city. He has always wanted to operate a sports bar. When he hears of a new shopping center development in the south part of the city, he contacts the developer and begins negotiations to open his dream enterprise.
I.If negotiations are successful and Davis incurs $40,000 in start-up costs to open his new business, he can deduct up to $5,000 of the start-up costs and must capitalize the costs of investigation and start-up exceeding $5,000.
II.If Davis decides not to open his bar and restaurant, the investigation expenses are fully deductible.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Biodata Methods

Techniques that involve collecting detailed biographical information about individuals to predict future behavior or performance.

Job Performance

The extent to which an employee accomplishes the assigned tasks, goals, and objectives effectively and efficiently within a given timeframe.

Work Situations

The various environments, conditions, and contexts in which professional activities are carried out.

Situational Interview

An interview in which job applicants are asked how they would react in specific situations.