Which of the Following Taxpayers Can Claim a Business Bad

question 103

Multiple Choice

Which of the following taxpayers can claim a business bad debt deduction for the current year?
I.Johnson is a dentist using the cash basis of accounting. He has accounts receivable from patients totaling $7,800 that are more than 90 days past due.
II.George owns and operates a sporting goods store and uses the accrual method of accounting. He has several customers who have owed him money for more than 10 months.
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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:

Electronic Monitoring

The use of technology to remotely track and monitor individuals' movements or behavior, often for security or compliance purposes.

Drug Tests

Methods used to detect the presence of illegal or prescription drugs in a person's body, often utilized by employers, law enforcement, and in sports.

Federal Insurance Contribution Act

A U.S. law requiring a deduction from employees' paychecks and a contribution from employers to fund Social Security and Medicare.

Annual Wage Base

The maximum amount of income that is subject to certain taxes or benefits calculations within a calendar year.