Victor Is Single and Graduated from Wabash College in May

question 74

Multiple Choice

Victor is single and graduated from Wabash College in May of 2015.In January of 2016,he begins to repay his student loans.During the year he pays $1,500 of interest on the loans.His adjusted gross income for the year is $65,000.Victor can deduct student loan interest of

• A)$- 0 -
• B)$800
• C)$1,000
• D)$1,200
• E)$1,500

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Definitions:

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, resulting in net income or loss.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.

Direct Method

One of two methods of preparing the net cash flow from operating activities section of the statement of cash flows. Each of the major areas of sources and uses of cash for operations is detailed separately.

Indirect Method

One of two methods of preparing the net cash flow from the operating activities section of the statement of cash flows. Involves converting the accrual basis net income figure from the income statement to the net cash flows from operating activities.