Match the Proper Deduction Method with the Correct Expenditures

question 3

Multiple Choice

Match the proper deduction method with the correct expenditures.
-Covenant not to compete for 4 years

• 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:

Nonprofit Corporations

are legal entities organized for purposes other than generating profit, where surplus revenues are reinvested in the entity's mission rather than distributed to shareholders.

Articles of Incorporation

The document filed with a governmental body to legally document the creation of a corporation, outlining its structure, purpose, and regulations.

Authorized Shares

The maximum number of shares that a corporation is legally permitted to issue, as specified in its articles of incorporation.

Incorporator

An individual or entity that establishes a corporation by filing the necessary legal documents with a governmental body.